PepsiCo and Boston Beer create alcoholic Mountain Dew drink

The Boston Beer Company and PepsiCo today announced plans to form a business partnership to manufacture the alcoholic beverage HARD MTN DEW.

Source: Boston Beer Company

PepsiCo and Sam Adams brewer Boston Beer team 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 unit for the sale, delivery and marketing of the product. The drink is slated to hit shelves in early 2022.

Hard Mtn Dew will belong to the flavored malt beverage category and contain 5% alcohol by volume. Early pictures of the products also show that they contain no sugar.

The first hint that Pepsi might move into the alcohol category came in October when Pepsi CEO Ramon Laguarta told analysts that the company would be considering the move. It followed an announcement by competitor Coca-Cola, Topo Chico Hard Seltzer, that it would create its first alcoholic beverage for US consumers in decades through a partnership with Molson Coors Beverage. Pepsi also filed a trademark application in June to sell Rockstar branded beer and hard seltzer.

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

For Boston Beer, the partnership with Pepsi comes because the company’s own products are struggling. Last quarter, the company’s rosy guidance for its Truly Hard Seltzer was hit by a reality check, causing the stock to plummet 26% in one day and the brewer lowering its guidance for the full year.

Meanwhile, the beer category as a whole is struggling. Last year, total beer volume fell 2.8%, although total alcohol consumption rose by the highest level 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 down more than 2% on Tuesday. The stock is down more than 32% since January and has a market value of $ 8.2 billion.

Pepsi shares rose slightly in trading on Tuesday. The stock is up 4% year-to-date and is valued at $ 213.3 billion.