17 Jan 2022 Monster Beverage enters alcohol market with craft beer
The rumours that have swirled around Monster Beverage the last few years that it wanted to get into the alcohol-beverage market have finally been put to rest and in a big way.
The announcement that it has agreed to purchase the CANarchy Craft Brewery Collective for $330-million means that one of the most prominent players in the highly lucrative energy drink market now owns one of the largest players in the craft beer market.
This deal extends the trend of soft-drink businesses branching out to the alcohol field, as differences between the two fade away.
Monster Beverage, whose biggest shareholder is Coca-Cola, currently develops and markets energy drinks brands like Monster Energy, Burn Energy and Full Throttle Energy Drink.
For instance, Coca-Cola Co has also partnered with brewer Constellation Brands to launch Fresca RTD cocktails, while rival PepsiCo has made a deal with Boston Beer to launch a Mountain-Dew-branded alcoholic beverage.
Monster declared that the deal would add craft beer brands Cigar City, Deep Ellum, Squatters, Wasatch, Oskar Blues and Perrin Brewing to its portfolio, but would exclude CANarchy’s restaurants.
Monster’s co-CEO Hilton Schlosberg said in a statement that this deal is a launching platform for Monster into the alcoholic drinks space.
“The acquisition will provide us with a fully in-place infrastructure, including people, distribution and licenses, along with alcoholic beverage development expertise and manufacturing capabilities in this industry,” Schlosberg said.
CANarchy supplies craft beverages throughout the US and 20 countries and .S territories, and has seven manufacturing locations with 900 employees, according to its website.
RBC Capital Markets Nik Modi said: “The CANarchy Craft Brewery acquisition may imply that MNST decided to go on its own in terms of alcoholic beverage manufacturing, but it may still need a larger scale alcohol distribution network.”
By buying the sixth-largest craft brewer, Monster will instantly gain access to established distribution networks, a respected alcohol brain trust, and a wide selection of brewers to work with moving forward.
All items that they plan to put to work immediately once the sale closes during the first quarter of 2022.