Dear Client:
Another day, another partnership announcement for Molson Coors Beverage Company.
Today president of emerging growth, Pete Marino, emailed distributor partners to share news that the company has entered into an exclusive partnership to distribute La Colombe Coffee Roasters ready-to-drink (RTD) coffee products in the drug and convenience channels through their distribution network.
“While we will start in these two critical and growing channels, La Colombe plans to fully transition distribution for all channels to the Molson Coors network over time,” per Pete.
Molson Coors will begin distributing La Colombe’s full RTD portfolio, including the Draft Latte and Brazilian Cold Brew products, starting January 2021.
Pete added that they will have access to any “new, innovative products the coffee roaster develops in the future.”
“This partnership provides our network access to a high-margin, well-respected and popular brand in a growing segment,” he said.
It gives the Molson Coors network access to the $4.6 billion RTD coffee market, “expected to grow by more than 60% over the next five years.”
For La Colombe, it will nearly double their retail footprint in drug and convenience stores, the latter of which ranks as the top channel for RTD coffee, accounting for some 41% of total retail sales, per Nielsen data.”
This deal won’t signify Molson Coors and La Colombe’s first interaction, however. Recall the brewer and roaster teamed up last year to test a 4.2% ABV hard coffee, dubbed Hard Cold Brew Coffee, in Boston, Denver, and three markets in Florida: Tampa, Ft. Meyers, and Treasure Coast.
“After the test concluded, the two companies found their goals for the future aligned,” Pete told their company blog this morning.
So Molson Coors has further diversified, aligning itself with a well-known brand to coffee junkies. La Colombe CEO and co-founder Todd Carmichael spoke at the Molson Coors meeting in February, and distributors seemed impressed. More as it rolls out.
CONSTELLATION Q2 DEPLETIONS UP 4.7%, SHIPMENTS DOWN 1.6%
The results for Constellation’s Q2 (the three months ended August 31) are in, and not a huge surprise for anyone who was listening to CFO Garth Hankinson on Barclay’s Back to School call last month.
Facing COVID headwinds and out-of-stocks due to Mexican facility shut downs this spring, beer depletions in the quarter were up 4.7%, while shipments were down 1.6% (organic shipments down 0.9%). (Recall, last quarter Constellation beer depletions were up 5.6% and organic shipments were down 6.3%.)
The company’s official announcement this morning provided some brand highlights: Corona brand family grew double digits in IRI, driven by Corona Hard Seltzer, which holds the no. 4 spot in seltzer, with 6 share of that segment in IRI, and almost 70% ACV.
Modelo Especial depletions were up 9% in the quarter, solidifying it as the no. 3 beer brand.
Pacifico was up 30% in IRI, and a “top share gainer” in imports.
Operating margins improved in the quarter, up 0.7% to 42.5 as favorable pricing and reduced marketing spend were partly offset by COGS.
As for inventories, Constellations maintains that they expect “to return to more normal levels by the end of the third quarter fiscal 2021 as shipment volume is expected to outpace depletion volume.”
CANOPY AND ACREAGE PLAN TO LAUNCH THC BEVERAGES IN THE U.S. NEXT SUMMER
In other Constellation-related news: Canopy Growth, in whom Constellation has a 41-ish% stake, and Acreage Holdings, whom Canopy has an obligation to buy up on federal marijuana legalisation in the U.S. (get out your Venn diagrams), have announced plans to “market Canopy Growth’s diverse beverage portfolio in the United States” — specifically bringing THC beverages to market here by next summer. Acreage is a vertically integrated U.S cannabis company with operations in more than 10 states.
“Leading with legal adult-use markets in Illinois and California, Acreage anticipates launching Canopy Growth’s select, sessionable THC beverage formulations in summer 2021,” per announcement. “In addition to selling products in its own dispensaries, Acreage will access existing distribution channels through strategic corporate relationships.”
Canopy CEO David Klein shared that they’ve sold more than 1.7 million cans of their THC-infused RTD beverages in Canada since legalization last December. (BBD gave you a peek under the hood on some of those beverages last year [see BBD 12-09-2019].) They already have 74% of the cannabis beverage category in Canada, with five of the top six skus.
Stay tuned.
CORONA TEAMS UP WITH BAD BUNNY IN “LA VIDA MAS FINA” CAMPAIGN
And in even more Constellation news, Corona announced yesterday that its family of brands has partnered with Puerto Rican reggaeton artist Bad Bunny for its new campaign,“La Vida Más Fina,” or “the fine life.” The fully integrated campaign launched in August of this year featuring entertainment icon, Snoop Dogg.
These newest spots with Bad Bunny and Snoop, dubbed “Shellphone,” aired last night during Game 1 of the NBA finals. (Check it out here.)
“We are excited to further our partnership with one of the hottest artists in music today, international superstar Bad Bunny,” said Ann Legan,
Vice President of brand marketing, Corona. “In addition to Corona and Bad Bunny’s shared Latino heritage, we felt his vibrant and colorful personality are a perfect embodiment of the La Vida Más Fina lifestyle.”
The brand has been working with Bad Bunny since 2019, when Corona Estéreo Beach sponsored the second leg of his X100PRE tour.
Until tomorrow,
Harry, Jenn and Jordan
“I not only use all the brains that I have, but all that I can borrow.”
– Woodrow Wilson
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