Beam Suntory, Boston Beer partner to bring brands into new alcohol categories

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Bottles of Beam Suntory Inc. spirits are on display at a press conference in Tokyo, Japan.

Yuriko Nakao | Bloomberg | Getty Images

Maker’s Distiller Mark Beam Suntory and Sam Adams Brewer Boston Beer are joining forces in a new partnership that will take iconic brands into new categories.

Initial plans for the long-term partnership include adding Boston Beer’s Truly hard Seltzer to the spirits category and using Beam Suntory’s Sauza brand for ready-to-drink beverages. These new products will be launched in mid-2022, and the companies plan to expand into more brands in the future.

Boston Beer CEO Dave Burwick and Beam Suntory CEO Albert Baladi already have a lot of experience working together. They overlapped at PepsiCo almost two decades ago and have stayed in touch. Baladi said the trust between the two men would further strengthen the partnership.

“I called Albert as we saw the category change, the consumption changes, so I thought it would be a good idea to call Beam Suntory to see if there was any way to collaborate,” said Burwick told CNBC.

It is the latest initiative from the alcohol giants to diversify and adapt to the changing tastes of consumers. In recent years, a “fourth category” of alcoholic beverages has emerged, blurring the lines between wine, beer and spirits. Last year, U.S. consumers drank more drinks from the ready-to-drink segment than spirits, according to industry tracker IWSR.

One drink that is driving the trend is ready-to-drink canned cocktails. Between 2019 and 2020, the premixed cocktails category grew by 50% in the United States, according to industry tracker IWSR. The segment is still relatively small, accounting for just 3% of US spirits volume, according to data from the US Distilled Spirits Council. Companies like Anheuser-Busch InBev and Molson Coors Beverage are among those betting on the segment. Last September, Beam Suntory purchased the On the Rocks brand of canned cocktails for an undisclosed sum.

Financial terms of the partnership were not disclosed. However, Baladi said it was a “fully integrated partnership” that goes beyond a simple licensing agreement. Both CEOs have experience working in joint ventures, dating back to their time at Pepsi.

“We’re going to have strategic reviews, innovation reviews, all of that good stuff,” he said. “We have teams that will join hip as we move forward.”

Beam Suntory and Boston Beer plan to build on each other for their expertise in new segments and leverage their distribution networks. Due to alcohol regulations that differ from state to state, beer may have a different path to market than spirits, which tend to be more regulated due to their higher alcohol content.

“Boston Beer, as a brewing company, has much broader access than we do, which puts the brand in the hands of a lot of consumers,” Baladi said.


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