Constellation Brands, under a new agreement with Coca-Cola, will launch a Fresca-branded canned alcoholic cocktail in the U.S. this year, BD has learned. The agreement will be announced this morning. Called Fresca Mixed, the ready-to-drink beverage will be spirit based, according to a Coke spokesperson. The partnership continues a recent trend by Coca-Cola and PepsiCo to extend key carbonated non-alcoholic brands into the alcohol beverage sector, as the companies hunt for new revenue streams and potential distribution scale.

PRODUCTION AND DISTRIBUTION.  Constellation will produce and market Fresca Mixed under a brand authorization agreement with Coca-Cola, which will sell Fresca beverage base to Constellation. The beer and spirits company will distribute Fresca Mixed through its licensed 3-tier beer distribution networks. The goal is to reach national distribution. Initial flavors will be inspired by recipes from Fresca consumers, who already use Fresca’s zero-calorie sweetened citrus sodas as alcohol mixers, according to the spokesperson. Constellation’s alcohol portfolio includes Corona and Modelo beers, Robert Mondavi wines, and Svedka vodkas. Constellation already markets an unrelated Corona Refresca canned cocktail in the US, among other ready-to-drink cocktails. Adult alternative beverages, including ready-to-drink cocktails, are said to generate $8 billion in retail sales annually and could grow by at least +15% on average annually through 2024, according to an estimate. In a statement to BD, Dan White, chief of new revenue streams for Coca-Cola’s North America Operating Unit, said the Constellation relationship “is ideal due to their consumer-focused approach to brand building, expansive distribution network, and distilled distribution expertise.”

FRESCA ON THE RISE.  Fresca, led by a flagship grapefruit flavored version that contains no caffeine, is Coke’s fastest growing carbonated soft drink trademark in the U.S. Fresca Mixed will mark the first extension into alcohol for the Fresca brand globally.
 
BLURRED LINES.  Last year, brewer Molson Coors launched Topo Chico Hard Seltzer under a similar brand authorization agreement with Coca-Cola. Topo Chico Hard Seltzer has since reached national availability and was extended this week to a Ranch Water variant. PepsiCo has since created a Blue Cloud U.S. beer distribution arm (which will include Pepsi bottlers) to distribute a new alcoholic Hard Mountain Dew product this year produced by Boston Beer. In addition, PepsiCo has said it is likely to distribute other beer brands through Blue Cloud.