Energy drink maker Monster Beverage could be entering the more than $2 billion hard seltzer segment, according to an analyst’s report.
Stifel Financial analyst Mark S. Astrachan speculated that the energy drink maker is considering entering the alcoholic beverage market, “most likely” with a hard seltzer.
“While we are unsure of product positioning, Monster is likely to launch a value-added hard seltzer that adds key product attributes ultimately expanding category usage occasions similar to how it has utilized innovation in energy drinks,” he wrote. “We think Monster is likely to seek distribution via a large beer network, with a product rollout in 2021.”
Astrachan added that Monster could also launch a non-alcoholic sparkling water under the Monster brand.
The alcoholic version of the seltzer, however, could be launched as a new brand, such as Reign Total Body Fuel, without the Monster name, Astrachan wrote.
Update (9:20 a.m. EST, July 8): In June, Monster filed for trademarks for four names, including True North, Real North, Pure North and Northstar, as subscription-based newsletter Beer Business Daily reported. The filings for True North, Real North and Pure North are related to goods and services: “seltzer water; water beverages; flavored waters; beer; brewed sugar based beer” and “hard seltzer; flavored brewed malt beverage; alcoholic beverages, except beer.” The Northstar filing lists”brewed sugar based beer.”
Similar to Reign’s ascension in the energy drink market, quickly claiming 3.3% share and becoming the fifth-largest energy drink brand, a Monster hard seltzer brand could find similar success, adding $76 million in sales to the company’s business, Astrachan wrote. That equates to 2.6% of Monster’s 2020 U.S. sales, and assumes the new product could claim 3.3% share of the hard seltzer segment.
Monster would be entering a hard seltzer segment that continues to grow at triple-digit rates, and accounted for 10.7% of beer category dollar sales in the latest one-week period ending June 27, according to market research firm Nielsen.
Year-to-date through June 21, hard seltzer dollar sales in off-premise retailers is up 295.8%, to $1.54 billion, according to data shared by Bump Williams Consulting.
Still, Monster would find itself in an increasingly crowded hard seltzer segment that has thus far been dominated by Mark Anthony Brands’ White Claw and Boston Beer Company’s Truly Hard Seltzer.
White Claw and Truly accounted for 88% of hard seltzer sales at the end of 2019, but those two brands account for 78% of seltzer sales over the last four weeks, Astrachan reported. As such, there may be a window of opportunity for Monster.
“We think the success of new entrants suggests an opportunity for Monster given its strong track record of innovation, including, importantly, expanding usage occasions with new products,” he wrote.
The list of competing brands grows longer by the day, including Anheuser-Busch InBev’s multiple offerings (Bud Light Seltzer, Bon Viv, Natty Light Seltzer), Constellation Brands’ Corona Hard Seltzer and Molson Coors’ Vizzy.
A number of craft brewers have attempted to gain ground in the segment, including Harpoon’s Arctic Summer, Deep Ellum’s Blind Lemon, Oskar Blues’ Wild Basin, Wachusett Brewing’s Nauti, Night Shift’s Hoot and Braxton’s Vive, as well as offerings from No-Li Brewhouse (Day Fade), COOP Ale Works (Will & Wiley), Sycamore Brewing (Bubs), and Destihl (Craft Hard Seltzer), among many, many more.
Joining the fray as well is Dogfish Head Craft Brewery, which merged with Truly maker Boston Beer Company last year.
In a July 3 social media post, Dogfish Head announced that it was making “Hoppy Medium, real fruit hard seltzer.”
“Made with real guava paired with complementary, aromatic Citra hops, this tropical sipper is as juicy as it is refreshing – a fruity fizzer that’s sure to satiate,” the company wrote.
Dogfish Head is offering Hoppy Medium in 32 oz. crowlers and 32 oz. and 64 oz. glass growlers for curbside pick-up at its taproom in downtown Rehoboth Beach, Delaware.
“It’s a labor of love any time you work with real fruit, but it’s a labor we’ve committed to since our earliest days with the likes of Aprihop, Festina Pêche and so many more,” Dogfish Head founder Sam Calagione said on Dogfish Head’s website. “Couple that with our deep understanding of hop extraction techniques gleaned through 18 years of distilling and 25 years of brewing, and you can taste the impact real fruit, real hops and experience have on creating the perfect Hoppy Medium.”
Dogfish Head does not have plans to distribute Hoppy Medium — which checks in at 6% ABV and 130 calories — outside of Delaware, Craft Business Daily reported.