Anheuser-Busch buys alcoholic beverage brand Hoop Tea

Dive Brief:

• Anheuser-Busch purchased Hoop Tea, a Maryland-based beverage company known for its tea-infused malt beverages and seltzers, the companies said in a statement.
• Hoop Tea will be led by founder and CEO Danny Robinson, who has joined Anheuser-Busch. Terms of the deal were not disclosed.
• 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 $1 billion in revenue during the last three years, the company said, citing IRI data.

Dive Insight:

Anheuser-Busch built its foundation on beer, but a bigger part of its future is centered on a portfolio that goes beyond its roots.

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 $1 billion in revenue from its emerging growth brands by 2023.

As beer sales have slowed in recent years, alcohol companies have added drinks to the mix that encompass a diverse range of beverages. From Hiball sparkling energy water to Cutwater canned cocktails, Anheuser-Busch has shown it’s largely staying close to what it does well with alcohol, but is not afraid to branch out into other categories.

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.” 

Hoop Tea adds a new offering to that portfolio, competing in the hard tea category.

Boston Beer currently dominates hard tea with its Twisted Tea, which has between 90% and 95% market share, the company said in its earnings call last month. CEO Dave Burwick said among the top 25 beer brands, Twisted Tea is the second fastest-growing one so far this year. Boston Beer recently launched Twisted Tea Light, which has 109 calories.

Through Anheuser-Busch’s 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. The executives are not only familiar with the segment, but also know how to establish a brand.

“Joining Anheuser-Busch is a perfect fit for us because we share a culture of daring innovation and strategic growth,” Hoop Tea’s Robinson said in a statement.

Hoop Tea was created in Ocean City, Maryland. With the laid-back beach culture permeating the marketing of the brand, Hoop Tea, which has gained a following in the mid-Atlantic region, could quickly see its way to other parts of the U.S. under Anheuser-Busch’s stewardship.