US – Anheuser-Busch, a subsidiary of the world’s largest beer company AB InBev, has signed a distribution deal with Ready-to-drink cocktail company Canteen Spirits, expanding its Beyond Beer portfolio.
Anheuser-Busch’s parent company is also reported to have invested an undisclosed sum in the ready-to-drink cocktail company through its investment and innovation arm ZX Ventures.
Following the deal, Canteen Spirits will join Anheuser-Busch’s Beyond Beer portfolio, which launched in 2018 to capitalize on the growing seltzer, wine, spirits and malt-based beverages segment.
Canteen Spirits makes a vodka-based cocktail called Canteen with seven flavors, and a tequila-based drink called Cantina that has three flavors.
The beverages, currently sold nationwide, have low carbs and ABVs, and are made with natural flavors and no sugar.
According to an analysis by FoodBev, premium beverages and ready-to-drink cocktails have grown during the pandemic as consumers increased their at-home drinking.
Demand for low alcohol beverages, increasing health consciousness and preference for premiumization and convenience are driving the market growth.
According to Nielsen’s 2019 research, consumers were also increasingly shifting towards RTD drinks because of the many options and flavours that the segment can offer.
Two-thirds said “assorted flavors” were their top pick in the category, according to Nielsen’s research.
The low-carb and no-sugar attributes of Canteen Spirits’ RTD beverages thus make it an appealing product to this growing segment of consumers who are adopting a more health-conscious approach to their diets and opting for clean-label products.
A symbiotic relationship between startups and legacy brands
Given the product’s strong market potential, tie-ups with a legacy beverage manufacturer and distributor such as Ab InBev has become necessary for smaller brands.
Its more of a symbiotic relationship where small brands get the resources needed to penetrate increasingly crowded segments, while helping legacy brands keep their offerings fresh and innovative.
For a bigger company, inking a distribution deal or acquiring a beverage startup offers an expedited route into a trendy segment that could come with fewer costs and development time compared to building a new beverage in-house.
This approach is not unique to AB InBev as other beverage companies such as Molson Coors and Beam Suntoty have embraced the strategy to gain a foothold in the rapidly expanding segment.
Earlier this year, Molson Coors Beverage signed a deal with Casa Kosmos Beverage Group to distribute its 100% blue agave RTD tequila beverage called Superbird.
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