AB-InBev buys SpikedSeltzer maker

If in need, clinch a deal. With their beer sales under pressure, AB-InBev have branched out into another new hot beverage category which comes by the name of alcoholic Seltzer. In September 2016 they bought the company Boathouse Beverage which produces the SpikedSeltzer brand.

The beverage in question is basically an alcopop because it’s made from fermented sugar that creates a carbonated-water beverage with 6 percent ABV. It comes in flavours like Valencia Orange, Cape Cod Cranberry and Indian River Grapefruit.

No terms were disclosed. Boathouse Beverage began making alcoholic, carbonated-water beverages in 2013 and has increased sales to more about 45,000 hl, it was reported.

US media say the acquisition highlights the pressure on brewers to expand beyond beer. Over the past 15 years, beer has been losing share of the total US alcohol market to spirits and wine. The erosion has led AB-InBev and others to create an array of beverages like Bud Light Lime-A-Rita, Not Your Father’s Root Beer and Henry’s Hard Soda.

Called “flavoured malt beverages”, these beverages have witnessed a hike in sales to reach USD 2.0 billion last year, up 21 percent from USD 1.7 billion in 2012, according to market research firm IRI. The beer category had sales of USD 33 billion in 2015.

For some reason these beverages manage to command a higher price than beer. A case of flavoured malt beverages cost USD 34.30 in August 2016, a whooping 50 percent more than the USD 22.88 for a case of a mainstream beer.

It may just be another faddish product, but the success of SpikedSeltzer has attracted others to the category. The Canadian Mark Anthony Group, which makes Mike’s Hard Lemonade, this year launched White Claw Hard Seltzer, and Boston Beer, the maker of Samuel Adams, introduced the Truly Spiked & Sparkling brand.

AB-InBev plan to grow SpikedSeltzer sales by integrating it into their national network of 500-plus distributors. Currently, SpikedSeltzer is only available in 14 US states, with northeastern states like Connecticut and Massachusetts accounting for a significant portion of sales.

Under AB-InBev, the production of SpikedSeltzer, which had been contracted out, will be moved to AB-InBev’s Baldwinsville, N.Y., brewery.

Although AB-InBev agreed with the Department of Justice in July 2016 that henceforth each takeover of breweries with a turnover over USD 7.5 million will be vetted by the anti-trust watchdogs, this transaction apparently does not fall under the settlement because SpikedSeltzer’s turnover did not reach this threshold.

In the US, AB-InBev have snapped up eight craft brewers since 2011 when they bought Chicago-based Goose Island for USD 38.8 million.