DENVER—Molson Coors Brewing Co. is working hard to attract young adults with beverages beyond the beer category, according to the Wall Street Journal. The Colorado-based brewer has purchased a large stake in L.A. Libations, a nonalcoholic beverage incubator, and plans to expand its portfolio with high-end, better-for-you drinks. Terms of the deal weren’t disclosed, but Molson Coors is taking a 49% stake, according to insiders.
This month, the company announced it would lay off hundreds of staff, seek to diversify its drink offerings and change its name, replacing the word “Brewing” with “Beverage.”
Interest in L.A. Libations will allow the brewer to launch new nonalcoholic drinks faster than it could if it had to build out the research and development infrastructure in-house. The new deal gives Molson Coors equity in several small brands created by L.A. Libations, including Aloe Gloe, a combination of water and aloe vera; Arya, a seltzer infused with turmeric-root extract; and Arriba Chelada, a tomato-and-clam-juice drink made without artificial coloring. Last year, Molson Coors acquired Clearly Kombucha, a maker of fermented tea, and this year launched a canned wine spritzer and a hard coffee drink.
As Americans ditch lagers for wine and spirits and drink less alcohol in general, U.S. brewers are grappling with falling sales of core lager brands. Leading the way in the trend are millennials and Generation Zers, who drink less beer and less booze than their parents and grandparents did.
Working to diversify its Bud Light brand, Anheuser-Busch InBev SA has moved into energy drinks, canned cocktails, cold-brew coffee and iced tea. Bud Light’s sales volume has slipped 7.4% so far this year. Coors Light’s has fallen 3.9% and Miller Lite’s is roughly flat, according to an analysis of Nielsen data by Beer Marketer’s Insights. All three beers have lost market share.
L.A. Libations is known in the industry for spotting trends and getting young brands off the ground. It served as an accelerator for Body Armor sports drinks and Core alkaline water before they were picked up by Coca-Cola Co. and Keurig Dr Pepper, respectively.