Coca-Cola (NYSE: KO) is teaming up with brewer, Constellation Brands, in order to manufacture alcoholic cocktails under the Fresca soda brand. The Fresca label is a new distinctive line of spirit-based, ready-to-drink cocktails that are aligned with recent trends.
“The Coca-Cola Company’s FRESCA® brand is not only trusted by consumers, but also directly delivers on consumer preferences for refreshment, flavor, and convenience – attributes that also play well within beverage alcohol and where we can leverage our expertise,” said Bill Newlands, Constellation’s president and chief executive officer.
Nonalcoholic companies are opting to expand their portfolios as consumers reduce their soda consumption. This collaboration is Coke’s second time dealing with alcohol since the 1980s, following the recent unveiling of its Topo Chico Hard Seltzer. Coke’s competitor PepsiCo has also decided to launch Hard Mtn Dew with Boston Beer in February.
Constellation is set to produce, market, and distribute the drinks through its three-tier distribution network. Coke says that Fresca is soaring in popularity, the fastest growing soda trademark within the company’s U.S. portfolio.
Constellation shares rose less than 1% during premarket trading following the release of its latest results Thursday morning. Furthermore, it topped Wall Street estimates for its quarterly earnings and revenue.
“One of the core tenets of our innovation strategy is a belief in the power of extending strong and trusted brands in thoughtful ways to bring to market unique products that resonate with consumers,” said Mallika Monteiro, Constellation’s chief growth, strategy, and digital officer. “This is an exciting agreement that allows us to continue expanding our premium portfolio in ways that deliver distinctive consumer value propositions that include things like more flavor, different alcohol bases, and functional benefits.”