Doing the Dew Adds Booze From Sam Adams Maker

(Bloomberg) -- Mountain Dew’s seemingly never-ending run of product extensions will now include jumping—rather late—into the hard seltzer craze. 

PepsiCo Inc., the soft drink’s maker, is partnering with Boston Beer Co. to unleash Hard MTN Dew, a flavored malt beverage, on the world early next year in what the companies said is part of their quest to deliver “new, break-through innovations to address the changing tastes of drinkers.”

Hard Mountain Dew will have 5% alcohol by volume, the same amount as Boston Beer’s Sam Adams Boston Lager. Boston Beer will develop and produce the beverage and PepsiCo has set up an entity to sell, deliver, and merchandise it. The companies didn’t describe its taste, although flavors include black cherry and watermelon.

Boston Beer is looking to revive sales after a decline last quarter in hard seltzer, a category that took off a few years ago with younger drinkers looking for lower calorie options. Its Truly brand is one of the dominant names in this sector, but purchases of it disappointed last quarter as Americans shifted back to bars and restaurants, where it has less distribution.

That performance is part of an overall slowdown in hard seltzer. Sales in the category rose just 0.9% during the last two weeks of July from a year earlier, according to data from Nielsen. But that’s still much better than overall beer sector, which posted a decline of about 7% over the same period.

There is also already lots of competition in hard seltzer and other so-called ready-to-drink canned beverages infused with hard alcohol, including similar partnerships that have blurred the lines between categories. One is Topo Chico Hard Seltzer, a tie-up between Molson Coors and Coca-Cola.

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