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Molson Coors, Coca-Cola partner for U.S. hard seltzer launch

Coca-Cola and Molson Coors are launching an alcoholic version of Topo Chico sparkling water. Yahoo Finance’s Emily McCormick joins Kristin Myers to discuss.

Video Transcript

KRISTIN MYERS: And Coca-Cola is trying to get into the hard seltzer game. We've got Yahoo Finance's Emily McCormick with more on that story. Hey, Emily.

EMILY MCCORMICK: Hello, Kristin. And taking a look at the news from today, we have Coca-Cola partnering with Molson Coors, with that company set to manufacture, market and distribute Coca-Cola's new hard seltzer version of Topo Chico's sparkling water in the US. Now this product is set to hit shelves in the US nationally in the first half of 2021. It's set to come in four flavors at first. Those include tangy lemon lime, exotic pineapple, strawberry guava, and tropical mango, according to a press release today.

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Now for Coca-Cola, this US expansion of the alcoholic beverage comes after it announced its Latin American launch of Topo Chico hard seltzer in July this year. Now taking a look at the history of this company, we did have Coca-Cola first purchasing Topo Chico in 2017 for $220 million. So now really trying to capitalize on that acquisition and broaden it out across the US and into different beverage verticals.

Now also important timing-wise here for Coca-Cola, in that the company has been struggling a bit with selling its typical soft drinks in the US nationally. With live events, like sports and other public events where the company has typically been selling beverages, of course, at least temporarily, is shuttered because of the pandemic. We saw in Coca-Cola second quarter results in July, that global unit case volumes were down 16% and net sales were down 28%. So really a testament here to some of the weakness that this company has had during the COVID-19.

Now you might be thinking, what's the benefit here for Molson Coors It is another opportunity for this company to delve deeper into the hard seltzer category. The company also launched Vizzy and Coors Seltzer through Molson Coors earlier this year. Taking a look at what CEO Gavin Hattersley had to say in a statement today. He said, quote, "this is another significant step in growing our above premium portfolio and becoming a major competitor in the rapidly growing hard seltzer segment, both key components of our revitalization plan."

Now it's worth noting here that just taking a look at the stocks, we are seeing Molson Coors actually getting the bigger boost on this news. That stock up about 1% in afternoon trading. We are seeing Coca-Cola down just over 1/10 of a percent. Kristin.