“Molson Coors Expands Beyond Beer: Entering the Energy Drink Market with ZOA”
While Molson Coors is primarily recognized for its flagship beer brands, the company is actively pursuing opportunities beyond its traditional alcoholic beverages. For instance, last October, it secured a distribution agreement with La Colombe, a producer of ready-to-drink coffee beverages, and launched a range of healthier drinks aimed at consumers seeking plant-based ingredients, probiotics, and other nutritious components. Additionally, Molson Coors has acquired a minority stake in L.A. Libations, a non-alcoholic beverage incubator known for its work on Bodyarmor sports drinks and Core Nutrition before their acquisition by Coca-Cola and Keurig Dr Pepper, respectively.
Now, Molson Coors is making its entry into the highly competitive energy drink market, which is currently dominated by brands like Monster and Red Bull, alongside PepsiCo, which recently purchased Rockstar for $3.85 billion and partnered with Bang. Coca-Cola, the largest non-alcoholic beverage company worldwide, has also introduced its own energy drink packed with caffeine, guarana extracts, and B vitamins. In a blog post, Molson Coors acknowledged the crowded nature of the sector but emphasized that ZOA’s premium focus on healthy ingredients, such as antioxidants, vitamins, and nutrients, will differentiate it in the market.
“We are committed to transforming into a beverage company, and adding ZOA is another indication of the strength of our conviction,” stated Pete Marino, president of Molson Coors’ emerging growth division, 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 market is among the strongest performers in the non-alcoholic sector, with sales projected to more than double from $9.3 billion in 2014 to $19.2 billion by 2024, according to Mintel.
ZOA will initially be available on the energy drink company’s website and Amazon, before expanding to retail stores. The challenge for ZOA will be to establish a presence in mainstream outlets where brands like Monster, Coke, Red Bull, and Celsius already dominate. For Molson Coors, this partnership allows the company to gain from any increase in product adoption without the risk of significant financial loss if ZOA fails to resonate in the market. ZOA plans to leverage the extensive distribution and retail networks of Molson Coors and its partner L.A. Libations, utilizing their beverage expertise and marketing support, which should significantly aid ZOA in scaling up and competing against industry giants in the early stages.
A team of experts in fitness, health, and the beverage industry, including Dwayne Johnson, launched ZOA. Johnson mentioned that he and his co-founders spent 18 months conducting research, formulating, testing, and gathering consumer feedback to identify the gaps in the industry. Their name recognition, coupled with their experience in fitness, health, and beverages, positions ZOA to create a product that not only delivers a much-needed energy boost but also incorporates ingredients that active consumers seek.
Importantly, Molson Coors has not neglected its core alcohol products. Last year, the company announced a more than 400% increase in production capacity for hard seltzers and popular innovations to meet consumer demand, along with a distribution partnership with the country’s oldest brewer, Yuengling. The company also acquired craft beer maker Atwater Brewery. However, the series of deals beyond alcohol clearly indicates that Molson Coors is serious about its expansion. The upcoming challenge will be to generate sufficient sales in this new category to support the company’s growth.
In the context of health and nutrition, the discussion of ingredients often touches upon options like calcium citrate vs calcium carbonate for kidney stones, as consumers become increasingly aware of the health implications of their choices. This awareness aligns with ZOA’s mission to provide not only energy but also beneficial ingredients that contribute to overall well-being. By integrating such health-conscious elements, ZOA aims to attract consumers who are mindful of their dietary decisions, including the potential impact of various forms of calcium on kidney stone formation.
