Dive Brief:

• Molson Coors Beverage is ending production of Coors Seltzer, Brewbound reported, citing a memo from the company to its wholesalers.
• The Chicago-based beverage maker has asked wholesalers to sell through the remaining inventory they have in stock, according to the message.
• The discontinuation of Coors Seltzer will allow the company to focus on more popular hard seltzers in its portfolio such as Topo Chico Hard Seltzer and nutrient-infused Vizzy.

Dive Insight:

With the beverage space inundated with hard seltzer offerings, it stands to reason that not all of them will be successful. Nearly every major brewer, including AB InBev and Heineken, have at least one product in the category.

The hard seltzer market is dominated by Mark Anthony Brands' White Claw and Boston Beer's Truly, which collectively command 75% of the category. Molson Coors so far has achieved a 6% market share with Vizzy and Topo Chico Hard Seltzer combined, CEO Gavin Hattersley said during its April earnings call. This is despite the company having only one SKU for Vizzy in 2020 and Topo Chico launching in just 16 markets. 

Achieving this market share position in a relatively short period of time is a win for Molson Coors, which analysts have said was slow to enter the fast-growing hard seltzer market. As the category expands, there is likely room for multiple players. A product from Molson Coors' portfolio could ultimately rise to the top tier even if it can't overtake firmly established brands like White Claw and Truly.

In Coors Seltzer, Molson Coors appears to be nixing a brand that was a distant player in its hard seltzer portfolio. The company would be better off directing its resources to Topo Chico and Vizzy, which are off to a more promising start and are differentiated from other products on the market. 

Vizzy is targeting a more healthy halo. The drink is made with acerola cherry, a superfruit that features 30 times more vitamin C per cup than an orange. In Topo Chico Hard Seltzer, Molson Coors is partnering with industry giant Coca-Cola to manufacture, market and distribute the premium drink. Coca-Cola bought the sparking water brand for $220 million in 2017 and only recently expanded its reach into alcohol. 

Some analysts have questioned how competitive Molson Coors will be in hard seltzers. Garrett Nelson, a senior equity research analyst at CFRA Research, said in an April research note he expects Molson Coors' volume in the category to "remain anemic."

To be sure, not all of Molson Coors' bets are going to pan out. The company is wise to end production of brands early on that don't show long-term promise, especially if it has similar products that can take their place. Known for its signature beers, Molson Coors has also been moving aggressively into other beverage categories like spirits, and energy and plant-based drinks. It is targeting $1 billion in revenue by 2023 from these and other beverages housed under its emerging growth division, which launched just two years ago.

In an interview with Food Dive, Hattersley, who made moving beyond beer a major focus since he took over in September 2019, was upbeat about the company's prospects. The beer industry in general "has stabilized" in part because of robust demand for hard seltzers, he said. 

"Obviously, there is more work to do," Hattersley said, speaking about Molson Coors as a whole. "But I think it's going incredibly well when you consider the challenges that have been thrown at us."