PepsiCo and Boston Beer to Create Mountain Dew Alcoholic Drink

PepsiCo and Sam Adams brewer Boston Beer are teaming up to create an alcoholic version of Mountain Dew.

Boston Beer will develop and produce the drink, called Hard Mtn Dew, while Pepsi has created a new entity to sell, deliver and market the product. The drink is expected to hit shelves in early 2022.

Hard Mtn Dew will fall under the flavored malt beverage category and will contain 5% alcohol by volume. The first images of the products also show that it will not contain any sugar.

The first hint that Pepsi could fall into the liquor category came in October, when Pepsi CEO Ramon Laguarta told analysts the company would consider the move. This followed an announcement by rival Coca-Cola that it would create Topo Chico Hard Seltzer, its first alcoholic beverage for U.S. consumers in decades, through a partnership with Molson Coors Beverage. Pepsi also filed a trademark application in June to sell Rockstar-branded beer and seltzer water.

Pepsi has been trying to use the weight of the Mountain Dew name for several years to move soda into new categories, like energy drinks. The company launched Mtn Dew Rise Energy earlier this year. According to Euromonitor, Mountain Dew has around 7% of the soft drink market share, which puts it in fifth place.

For Boston Beer, the partnership with Pepsi comes as the company’s own products struggle. In its final quarter, the company’s optimistic projections for its really tough seltzer were faced with a reality check, dropping the stock by 26% in one day and the brewer lowered its forecast for the entire year. .

Meanwhile, the beer category as a whole is struggling. Overall beer volume fell 2.8% last year, despite increasing total alcohol consumption to its highest rate in nearly two decades, according to industry tracker IWSR. Boston Beer also recently announced a partnership with Beam Suntory to bring its iconic brands into new categories.

Boston Beer shares were trading down more than 1% on Tuesday. The stock has lost more than 31% since January, raising its market value to $ 8.29 billion.

Pepsi shares rose less than 1% in trading on Tuesday. The stock has gained 4% year-to-date and its market value is over $ 213.88 billion.