Coca-Cola (NYSE:KO) and Corona brewer Constellation Brands (NYSE:STZ) are teaming up to create alcoholic cocktails under the Fresca soda brand.
It’s the latest partnership between beverage companies to blur the lines between drink categories in the hunt for growth. Nonalcoholic beverage manufacturers are diversifying their portfolios as soda consumption shrinks and new regulated beverage markets, like CBD-infused drinks, are on the horizon.
Coke’s rival PepsiCo (NASDAQ:PEP) is rolling out Hard Mtn Dew with Boston Beer (NYSE:SAM) in February. This latest collaboration marks Coke’s second foray into alcohol since the 1980s, following the recent success of its Topo Chico Hard Seltzer launch in partnership with Molson Coors Beverage.
Since its introduction to the U.S. market in 1958, Fresca has undergone several makeovers and reformulations to attract U.S. consumers, but this will be the most ambitious move for the brand yet. Fresca Mixed Cocktails are slated to launch this year in the U.S.
"The Coca-Cola Company’s FRESCA brand is not only trusted by consumers, but also directly delivers on consumer preferences for refreshment, flavor, and convenience – attributes that also play well within beverage alcohol and where we can leverage our expertise," Constellation CEO Bill Newlands said.
Constellation says it will produce, market and distribute the cocktails through its three-tier distribution network.
According to Coke, Fresca is surging in popularity recently, making it the fastest-growing soda trademark in the beverage giant’s U.S. portfolio. And its grapefruit flavor makes it a common choice as a cocktail mixer already.
KO shares waned 15 cents to $60.64, while shares in STZ handed back 90 cents to $252.46.
