Molson Coors Beverage Company (TAP - Free Report) is leaving no stone unturned to expand its portfolio of brands and reach, which should also make good any loss suffered from the COVID-19 pandemic. In its latest move, the company formed a joint venture with Pennsylvania-based D.G. Yuengling & Son Inc. to expand the latter’s brand reach to the West Coast. As part of the deal, the companies expect the Yuengling beer to be available in newer markets by the second half of 2021.
Yuengling beer is currently distributed on the East Coast of the United States, across 22 states and New England. The partnership with Molson Coors will help expand the footprint of brands like Yuengling Traditional Lager, Black & Tan, and Flight in other states in the West Coast of the United States.
To manage the joint venture, the companies have formed a six-member board of directors, consisting of three members from each company’s family members and executives. Further, Yuengling will hold the chairmanship on the board. However, the companies are yet to name the leader of the new enterprise.
Notably, Yuengling is a family-owned business and will continue to operate as a separate entity from the joint venture with Molson Coors. As part of the deal, Molson Coors will offer some of its breweries to brew and pack under the guidance of Yuengling brewers. The beers will be distributed into new markets, using Molson Coors’ large footprint, particularly in the Western United States.
As for Yuengling, the partnership is a great opportunity to expand its distribution footprint, while lending additional support for its existing markets. The company will benefit from the additional capacity provided by Molson Coors’ breweries to assist in growth across new markets as well as existing ones. Further, it will build a customer base for the iconic beers from one of America’s Oldest Brewery.
On the other hand, Molson Coors will gain from an expanded brand portfolio as well as increased exposure in Yuengling’s existing markets. The deal keeps the company on track with its initiatives to fortify its core of American lagers. As part of the company’s Revitalization plan announced last year, the company has undertaken several deals to expand in the non-alcoholic beverage space, explore the cannabis market and take a share of the fast-growing hard seltzer demand.
Notably, the company renamed itself as Molson Coors Beverage Company in January 2020 to more precisely present its intent to expand beyond beer and into other growth adjacencies.
Living up to this motive, last week, it announced its first non-alcoholic innovation in partnership with L.A. Libations, in which it acquired a minority stake in November 2019. In partnership with L.A. Libations, the company plans to launch four innovative non-alcoholic brands from its emerging growth division on the lines of health, wellness and social responsibility.
The first of these brands to be launched is HUZZAH in the seltzer category this fall. The full-flavored seltzer will include probiotics to support a healthy gut, with lesser sugar and calorie content. The company plans to launch HUZZAH on the online platform DrinkHuzzah.com along with select retailers in South California. The brand will be launched in three flavors — Strawberry & Hibiscus, Juicy Pear, and Raspberry & Lemon.
Other brands lined up for launch under the plan are MadVine — a 100% plant-based diet soda with zero calories, sugar and artificial ingredients, and Golden Wing — a grain-based milk alternative made of top-quality barley and no additives, stabilizers or frothing agents, containing proteins and nutrients.
The company’s fourth line of non-alcoholic products is likely to be a nootropic performance beverage, which will provide enhanced focus and nutrition. It will also provide improved performance, without the troubles linked to high-caffeinated drinks for gamers and developers. This product is not yet formally announced by the company.
Moreover, it earlier launched non-alcoholic, cannabis-infused beverages through its joint venture with the HEXO Corp., for the Canada and Colorado markets. These launches demonstrate the company’s focus on gaining share in the non-alcoholic beverage space.
Molson Coors is one of the largest brewers in the world and boasts a strong portfolio of well-established brands. The company’s focus on premiumization and cost savings has been aiding its bottom-line performance. In fact, it remains committed to growing its market share through innovation and premiumization. With a view to accelerate portfolio premiumization, the company has made significant additions to its above-premium brand portfolio in the past few years.
Shares of the Zacks Rank #3 (Hold) company have declined 11.5% in the past three months against the industry’s growth of 7.9%.
3 Better-Ranked Beverage Stocks
The Boston Beer Company, Inc. (SAM - Free Report) delivered an earnings surprise of 26.1%, on average, in the trailing four quarters. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brown-Forman Corporation (BF.B - Free Report) delivered an earnings surprise of 8.2%, on average, in the trailing four quarters. It currently has a Zacks Rank #2 (Buy).
Monster Beverage Corporation (MNST - Free Report) presently has a Zacks Rank #2 and a long-term earnings growth rate of nearly 12%.
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