Monster Beverage buys craft beer maker in alcohol market

Jan. 13 (Reuters) – Energy drink maker Monster Beverage Corp (MNST.O) enters alcoholic beverage market with $ 330 million deal for craft beer and hard seltzer producer CANarchy Craft Brewery Collective LLC .

The cash deal, announced Thursday, expands the trend for soft drink companies to diversify into the alcohol space as traditional lines between categories rapidly blur.

Coca-Cola Co (KO.N) has partnered with brewer Constellation Brands Inc (STZ.N) to launch Fresca-branded ready-to-drink cocktails, while rival PepsiCo Inc (PEP.O) has partnered with Boston Beer Co (SAM.N) to launch an alcoholic beverage under the Mountain Dew brand.

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Monster said the deal would add craft beer brands Cigar City, Oskar Blues, Deep Ellum, Perrin Brewing, Squatters and Wasatch to its portfolio, but exclude restaurants from CANarchy.

Monster, whose main shareholder is Coca-Cola, currently develops and markets energy drink brands such as Monster Energy, Burn Energy Drink and Full Throttle Energy Drink.

The deal is a “springboard” for Monster in the alcoholic beverage business, its co-managing director Hilton Schlosberg said in a statement.

“The acquisition will provide us with a fully established infrastructure, including people, distribution and licensing, as well as alcoholic beverage development expertise and manufacturing capabilities in this industry,” Schlosberg said.

CANarchy supplies craft drinks throughout the United States and 20 U.S. countries and territories and has seven manufacturing sites and 900 employees, according to its website.

The deal is expected to be finalized in the first calendar quarter of this year.

A source told Reuters in November that Monster was discussing a merger with Constellation, but the main boss of the maker of Corona Extra and Modelo Especial told a conference the company would only engage in small, targeted acquisitions. . Read more

“The acquisition of CANarchy Craft Brewery may imply that MNST has decided to go into alcoholic beverage manufacturing on its own, but it may still need a larger-scale alcohol distribution network,” RBC Capital said. Markets Nik Modi.

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Report by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila

Our standards: Thomson Reuters Trust Principles.

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