Despite seeing a 9.7% decline in net sales in the first quarter of 2021, Molson Coors Beverage Company reported solid sales for its non-alcoholic beverage portfolio, including new energy venture ZOA.
Net sales per hectoliter for its hard seltzer portfolio grew 4.1% in the quarter, which includes Vizzy Hard Seltzer, Topo Chico Hard Seltzer and non-alcoholic energy drink ZOA, which the company launched earlier this year in partnership with Dwayne “The Rock” Johnson.
Speaking to investors and analysts on a conference call Thursday, CEO Gavin Hattersley said ZOA has been “extraordinarily well received by retailers and by distributors alike.”
“We just had our order window for the very first order close … and the orders are strong and that tells you how the distributors feel about it,” Hattersley said during the call’s Q&A portion. “The retailers are particularly excited about it as well. So we’re just getting into the market with it now.”
He noted that sales for ZOA have been particularly strong in the specialty channel, including in health and wellness retailers like The Vitamin Shoppe and GNC. He also highlighted Dwayne Johnson’s active involvement in driving demand, noting that “every time he puts something out on Instagram, he reaches 231 million followers in a nanosecond.”
A survey of convenience retailers representing about 20% of the channel conducted last month by Goldman Sachs Equity Research, however, found that many retailers said ZOA was not yet getting significant shelf space and struggled to drive repeat purchases. Only a minority of retailers surveyed said they expected to stock the brand and some said its cost model was too high compared to competing 16 oz. Energy drinks. Some respondents said the brand has yet to “nail down” its DSD model and cited a lack of samples as an issue.
As Molson Coors places an increased focus on its non-alcoholic portfolio, the company’s partnership with La Colombe is also going well, Hattersley said, and has already hit its full year distribution targets. The brand, he said, has particularly done well in the convenience and drug channels.
In cannabis, the company’s joint venture with Truss Beverage Co. is “holding strong” as the top dollar share earner in the Canadian cannabis beverage market, Hattersley said. Availability of its 12 oz. can line “returned to normal levels.”
You can read more about Molson Coors’ Q1 earnings and the latest on its alcoholic portfolio at Brewbound.