Dive Brief:
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Molson Coors Beverage signed an exclusive distribution deal to launch ZOA, a nonalcoholic energy drink made with better-for-you, natural ingredients, the company said in a blog post. It will be the beverage giant's first offering in the energy-drink segment, and will be available in March.
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ZOA is positioned as an above-premium energy drink with natural ingredients such as turmeric, camu camu and acerola cherry. It contains vitamins C, D and B, added electrolytes and amino acids, and it is made with caffeine derived from green tea and unroasted coffee beans. The beverage is made without preservatives, artificial ingredients or additives, according to the company. ZOA will be available in five flavors and sold in 16-ounce cans.
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ZOA is Molson Coors' latest effort to move beyond its core beer offerings. In the last year, it has introduced a full-flavored seltzer with added probiotics; a plant-based diet soda with no calories, sugar or artificial ingredients; and a grain-based milk alternative packed with proteins and nutrients.
Dive Insight:
While Molson Coors is widely known for its namesake beer brands, the company is moving aggressively to move beyond these and other alcoholic offerings.
For example, it struck a distribution deal last October with La Colombe, a maker of RTD coffee drinks, and introduced a suite of better-for-you beverages that cater to consumers looking for plants, probiotics and other healthier ingredients. Molson Coors also has purchased a minority stake in L.A. Libations, a nonalcoholic beverage incubator known for working on Bodyarmor sports drinks and Core Nutrition before they were picked up by Coca-Cola and Keurig Dr Pepper, respectively.
Now, Molson Coors is entering the ultra-competitive energy-drink space that is dominated by Monster and Red Bull along with PepsiCo, which purchased Rockstar for $3.85 billion last year and partnered with Bang. Coca-Cola, the world's largest nonalcoholic beverage company, also has launched its own energy drink loaded with caffeine, guarana extracts and B vitamins.
In its blog post, Molson Coors acknowledged that the space is crowded, but said ZOA's premium focus with healthy ingredients like antioxidants, vitamins and nutrients will enable it to stand out.
“We are committed to transforming into a beverage company, and adding ZOA is another indication of the strength of our conviction," Pete Marino, president of Molson Coors’ emerging growth division, said on the company's blog. While the energy-drink category is competitive, "we are entering with a product and partner group that offers a tangible point of difference."
The U.S. energy-drink sector is one of the strongest performers in the nonalcoholic space. Category sales are projected to more than double from $9.3 billion in 2014 to $19.2 billion in 2024, according to Mintel. ZOA will first be sold on the energy-drink company's website and Amazon, followed by retail stores.
The challenge for ZOA will be expanding its presence into mainstream stores where Monster, Coke, Red Bull, Celsius and others already have a meaningful presence. For Molson Coors, the partnership enables it to benefit from any upside in the products adoption without risking the loss of a significant amount of money if ZOA doesn't catch on in the marketplace.
ZOA said it will tap into the vast distribution and retail network of Molson Coors and its partner L.A. Libations, and use their beverage expertise and marketing support. This should play a big role in helping ZOA gain scale and compete against the industry leaders, at least early on.
A team of fitness, health and beverage industry individuals including Dwayne Johnson launched ZOA. The entertainer said he and his co-founders spent 18 months researching, formulating, testing and collecting consumer feedback to hone in "on where the white space is in the industry." Their name recognition, as well as their experience in fitness, health and beverages, should give ZOA an opportunity to create a product that not only provides a much-needed energy boost but also provides ingredients that active consumers demand.
To be sure, Molson Coors hasn't forgotten about its core alcohol offerings. Last year, the company announced it increased production capacity for hard seltzers and popular innovations by more than 400% to keep up with consumer demand, and it entered into a distribution partnership with the country's oldest brewer, Yuengling. It also purchased craft beer maker Atwater Brewery. But the barrage of deals outside of alcohol show Molson Coors means business. Now the challenge will be generating enough sales in this category to help grow the company.
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January 12, 2021 at 03:43AM
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Molson Coors enters crowded energy-drink space with distribution deal for ZOA - Food Dive
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