Beer Giant Molson Coors buys stake in Zero-Proof Beverage Incubator – L.A. Libations

Yesterday, beer giant Molson Coors announced it bought a minority stake in California-based beverage incubator L.A. Libations.

L.A. Libations ended a longtime partnership with The Coca-Cola Company this summer. And the company's CEO, Danny Stepper, told BevNET he spoke with almost every major beverage company before agreeing to the deal with Molson Coors.

"To sum it up, they're blazing a new trail," Stepper told BevNET. "They made a decision to get into the non-alcoholic space and this is a space where we've lived and made a lot of noise. It's new to them so this marriage lets them stay focused on what they're really good at. But at the same time, it gives them equity in non-alc brands, non-alc customer relationships, and non-alc brand creation capability overnight."

But this isn't the first move toward "zero proof" for Molson Coors.

The company dropped the MillerCoors name (connected to the 150-year old Miller Brewing Co.) in October in favor of the more inclusive (and diverse) Molson Coors Beverage Company - a big move for an old, stodgy brewer.

And it bought California-based Clearly Kombucha last year.

"As far as we're concerned, L.A. Libations is an accelerator in our ambition to play in the non-alc space," Peter Marino, president of emerging growth at Molson Coors told BevNET. "As the beer market continues to evolve in the U.S. and other countries around the world, consumers are showing they are no longer dedicated to one type of beverage when they're going out to drink. They're more and more curious, more and more experimental... As we pursue growth, we felt we needed to take advantage of [non-alc] in a bigger way."

L.A. Libations current portfolio includes the bottled water brand SZENT, Aloe Gloe, a low-calorie protein drink called Trimino, a sparkling turmeric-based beverage called Arya and many others.

Molson Coors is just one of many beverage giants investing in the zero proof movement. US alcohol consumption has dropped nearly 1% a year for the past three years... and that means a big hit to the bottom line for booze companies.

That's one of the reasons Diageo, the world's largest booze company, partnered with venture capital firm Distill Ventures in 2013. They invested in Seedlip in 2016, then took a majority position in August 2019.

AB InBev, the world's largest brewer, also has an investment arm focusing on zero proof drinks - ZX Ventures. Approximately 8% of Ab InBev's global beer sales no come from no and low alcohol beers. The company wants that number to be 20% by 2025.

We're at the beginning of a golden era for zero proof drinks. We're about to see billions of dollars flow into the sector... which means more and better options for anyone taking a break from booze.

Say goodbye to the days of club soda with lime and O'Doul's!