‘The Beast Unleashed’: What can we expect from Monster's alcohol strategy?
Last week Monster Beverage Corporation CEO Rodney Sacks confirmed the launch of ‘The Beast Unleashed’ – a 6% ABV alcoholic beverage – would take place in late Q4, 2022. So what do we know about the launch so far - and the further direction the company's alcohol strategy could take?
Monster started its alcohol journey with the acquisition of CANarchy Craft Beer Collective – a craft beer and hard seltzer company – for $330m in January this year.
The acquisition brought key brands such as Cigar City (Jai Alai IPA and Florida Man IPA), Oskar Blues (Dale’s Pale Ale and Wild Basin Hard Seltzer), Deep Ellum (Dallas Blonde and Deep Ellum IPA), Perrin Brewing (Black Ale), Squatters (Hop Rising Double IPA and Juicy IPA) and Wasatch (Apricot Hefeweizen) into the Monster beverage portfolio.
Net sales for Monster’s Alcohol Brands segment, which is comprised of the various craft beers and hard seltzers purchased as part of the CANarchy transaction on February 17, 2022, were $32.4m for Q2, 2022 (this being Monster's first full quarter in alcohol).
Monster labelled this acquisition as its ‘springboard to enter the alcoholic beverage sector’, gaining a fully in-place infrastructure, including people, distribution and licenses, along with alcoholic beverage development expertise and manufacturing capabilities in the industry.
Less than a year later, the launch of The Beast Unleashed is set to follow. While Monster has revealed few details about drink's flavors, look or target audience, Sacks says it ‘will leverage Monster’s brand equity, while carving out its own unique space in the beverage alcohol sector and will be distinguishable from the many hard seltzer brands that have become so ubiquitous over the last several years’.
There will be four flavors in the line: as of yet unrevealed but 'full-bodied, bold flavors' taking their inspiration from Monster’s ‘well-known and popular flavor profiles’ (of which Monster has nearing 40: ranging from a variety of tropical punch style flavors through to coffee/chocolate).
The drink will initially be offered in 16 oz single-serve cans, as well as in a 12 can variety pack with 12 oz sleek cans.
The Beast Unleashed will be launched through beer distributors in the US in state-by-state phases starting at the end of the year. Monster aims for the drink to have national distribution by the end of 2023.
'Our alcohol innovation pipeline is robust'
But past the launch of The Beast Unleashed, Sacks promises a long-term strategy in alcohol with several other alcoholic beverages in the works.
This year the company has filed for a raft of trademarks in the alcoholic beverage category: including Juice Monster Spiked, Hard Juice Monster, Khaotic, Dragon Tea, Eden Apple, Aussie Style Lemonade, and Pacific Punch: suggesting the company is considering both new brands and line extensions.
“Our alcohol innovation pipeline is robust, with a number of additional innovative product lines currently under development,” said Sacks in last week’s earnings call. “We look forward to sharing news of such additional alcohol beverage products at a later date.”
The Coca-Cola Company and PepsiCo have both launched into RTD alcohol (more on this below...) through tie-ups with alcohol beverage companies who boast the appropriate know-how in the alcohol beverage sector: knowing this can differ enormously from soft drinks from regulatory processes to distribution set-ups.
Monster, however, has the infrastructure of its CANarchy acquisition, as well as the option acquire other players in alcohol or create partnerships with alcohol beverage players.
From soft drinks to RTD alcohol
Monster’s move into alcoholic beverages is just the latest in a series of plays by soft drinks companies into alcohol: more precisely the booming RTD segment.
PepsiCo launched Hard Mtn Dew in February year in partnership with The Boston Beer Company.
The 5% ABV is caffeine-free, with zero added sugar and 100 calories per serving, with 'new, differentiated graphics' to highlight the hard proposition.
It comes in four flavors: Original, Baja Blast, Black Cherry and Watermelon.
(Monster's drink will come in at a higher 6% ABV; but expect similarly bold designs to tie in with the company's branding. Monster also appears to appreciate the value of zero sugar options, given the upcoming launch of Monster Energy Zero Sugar back over in the non-alcoholic category at the end of this year.)
Carbonated soft drink Mtn Dew is one of PepsiCo’s top beverage brands: which has been pushing into energy with caffeinated Mtn Dew Rise Energy (launched in March) and Mtn Dew Amp Game Fuel (launched in 2018).
In the case of Hard Mtn Dew, PepsiCo has licensed the brand to Boston Beer which is producing the product, while PepsiCo has set up a new entity - Blue Cloud Distribution - for the wholesale operations including sales, distribution and merchandising.
Speaking in last month's earnings call, PepsiCo CEO Ramon L. Laguarta said the company is positive about the potential of the product after the first few months - as well as the wider potential to continue developing in the category.
Another high-profile move into alcohol is that of The Coca-Cola Company: which launched Topo Chico Hard Seltzer last year in partnership with Molson Coors (in the US, Molson Coors takes on responsibility for the manufacture, marketing and distribution of the drink).
The company described the launch as a ‘natural evolution’ of its premium Mexican water brand Topo Chico: taking the non-alcoholic brand smoothly into the alcohol category thanks to the alcohol know-how of Molson Coors. Its hard seltzer comes in at 4.7% ABV (again, Monster’s 6% ABV will be considerably higher).
And of course as a soft drink company, any growth in the alcohol category is incremental, with most hard seltzer fans migrating to the category from beer.
Coca-Cola has also launched the drink outside of the US: in fact using Latin America as an early test market and launching in Europe slightly ahead of the US thanks to a simpler distribution system.
Coca-Cola is now building on its moves into alcohol with an alcoholic version of Fresca this year via a collaboration with Constellation Brands. This will see the zero-calorie, grapefruit citrus-flavored soft drink and cocktail mixer – currently the fastest-growing trademark in The Coca-Cola Company’s US soft drink portfolio – launch a line of full-flavored, spirit-based RTDs.
In this instance, it sees Fresca Mixed appealing to consumers searching for ‘fuller-flavored experiences’ and higher-quality RTD cocktails to bridge the space between refreshing hard seltzers and bar cocktails.
In a similar arrangement as with Molson Coors on Topo Chico, Constellation Brands is responsible for producing, marketing and distributing Fresca mixed: drawing on its distilled manufacturing and operational capabilities and national distilled distribution network with access to retailers in this category.
And next up will be the launch of a Jack & Coke RTD canned cocktail: delivered via a partnership between Coca-Cola and Brown-Forman.
The 5% ABV drink will launch in Mexico at the end of the year, in anticipation of a global rollout.