USA – American brewing company, Anheuser-Busch has acquired Hoop Tea, a Maryland-based beverage company known for its tea-infused malt beverages and seltzers, as part of the company’s push beyond the beer aisle.
Hoop Tea will join Anheuser-Busch’s Beyond Beer portfolio, which includes brands such as Cutwater Spirits, Babe Wine, and Bon & Viv Spiked Seltzer.
The segment has captured more than US$1 billion in revenue during the last three years, the company said, citing IRI data.
Hoop Tea adds a new offering to that portfolio, competing in the hard tea category which is currently dominated by Boston Beer with its Twisted Tea, which has between 90% and 95% market share.
An aggressive push beyond beer
Anheuser-Busch built its foundation on beer but slowing growth in the beer segment has pushed itself into other categories that have the potential for growth.
From Hiball sparkling energy water to Cutwater canned cocktails, Anheuser-Busch has proven that it is not afraid to branch out into other categories to offset the slowing growth in Beer.
Fabricio Zonzini, president of Beyond Beer at Anheuser-Busch, told Forbes last year the unit was established around 2018 to build a portfolio around seltzer; wine and spirits, malt-based beverages, and non-alcoholic and low alcohol.
“At the end of the day it’s all about consumer centricity, looking at consumers first and trying to look at the needs that our portfolio is not delivering, or the needs that consumers didn’t even know they wanted, that we then work to anticipate and provide,” Zonzini told Forbes.
“There’s a huge world out there outside of beer, and it’s a big part of our company’s strategy to source growth from the Beyond Beer segment.”
It’s a similar strategy being used by rival Molson Coors, which has become an expert in energy drinks, beverages with THC, hard seltzers, and natural diet sodas.
As it moves to “fundamentally change” its portfolio amid a rapid shift in consumer tastes and preferences, Molson Coors is targeting US$1 billion in revenue from its emerging growth brands by 2023.
With Hoop Tea, Anheuser-Busch believes that it can win in the Beyond Beer aisle leveraging its experience in the hard seltzer segment, which it entered relatively late.
The beer maker knows that it can still make significant inroads against established category leaders with its deep pockets, marketing expertise, and vast distribution network.
Boston Beer’s Truly and Mark Anthony Brands’ White Claw, which together have about 75% of category market share according to Euromonitor statistics referenced by CNBC, have long dominated hard seltzer.
But in the four weeks that included much of July, Bud Light Seltzer accounted for one-tenth of hard seltzer sales in the United States.
Anheuser-Busch’s successful track record in hard seltzer, coupled with Robinson and Hoop Tea Vice President Billy Gillman sticking around to develop and grow the brand, also bodes well for the deal.
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