TLDR: Beer. Coca-Cola. Everyone’s getting on the spirits bandwagon.

A few weeks ago I wrote about the influx of new players to the spirits industry. Specifically the wine industry and the families that dominate it (Part 1)

But they aren’t the only ones getting in on the action.

Let’s look at the US alcohol market share graph again:

The Wine industry is barely losing 2% annually and they are moving into spirits in a big way.

Beer is getting absolutely crushed. They have to do something…

Well they did.

Molson’s launch of an internal brand in 2021 was the first sign, but the major acquisition of Blue Run and the associated capital investment into their massive distillery signaled a serious commitment to the changing consumer trends.

Just like the wine industry, beer companies have the know-how and resources to compete against the multinational spirits giants:

Access to capital, massive distribution networks, and regulatory infrastructure.

They also have a unique advantage over even the spirits giants…

What’s the fastest-growing segment in spirits? Almost 30% in 2023 alone

RTDs (Ready to Drink Cocktails aka High Noon, etc)

I’ve said before and will say again, that while RTDs often have spirits in them, they are a TOTALLY different business model than traditional spirits.

Razor-thin margins that need immense volume and constant turnover.

Well, that’s a typical Tuesday for a company that can make a profit selling cans of Keystone for 50 cents.

That’s how most of them are getting involved in the spirits boom:

1. Anheuser Busch: Cutwater, Nutrl, etc.

2. Boston Beer: Twisted Tea, Truly

3. Molson Coors: Topo Chico Hard Seltzer, Superbird

Wait. Isn’t Topo Chico owned by Coca-Cola?

Even Coca-Cola is getting in on the action:

The GOAT of selling cans to the masses, Coca-Cola, has been testing the waters with selling alcohol the last few years. They typically start in a smaller foreign market and expand to the US if they see success.

Well the results must be something because they are making major investments into the alcohol category: Topo, Simply Spiked (absurd), and canned Jack & Coke.

For now, they are relying on partners like Molson Coors to distribute these products, but they have the resources to build out and compete on their own if the money makes sense.

Takeaway: These big players coming into spirits is a big deal and creates a once in a generation opportunity for brands and investors to take advantage of if they know what they are doing… That will be part 3.