Molson Coors Beverage Company is further solidifying its relationship with L.A. Libations by investing in Arriba, a brand of michelada mixers operated by the California-based incubator.
Terms of the deal were not disclosed.
The partnership will place Arriba into Molson Coors’ distribution network, with a focus on growing the brand in the California and Texas markets. The brand is currently available in California chains such as Northgate Market — which focuses on Hispanic imports — as well as Ralphs, Albertsons, Vons and Whole Foods stores. The deal with Molson Coors is expected to rapidly grow Arriba’s footprint in Texas retailers.
L.A. Libations co-founder Dino Sarti said Molson Coors is the leader in a funding round that includes other shareholders. Molson Coors took a minority ownership stake in L.A. Libations in November 2019 as one of its first steps towards expanding its portfolio into non-alcoholic beverages. In its first year, the collaboration produced a slate of new brands set to launch in the coming months. However, according to Sarti, the deal does not include investments in individual brands within the incubator’s portfolio, which are considered separate organizations, leading to this new partnership with Arriba.
Launched last year, Arriba produces a line of better-for-you ‘cheladas,’ a Mexican drink that combines beer with tomato juice, spices and hot peppers. Arriba’s current portfolio includes Clam & Sea Salt, Shrimp & Sea Salt, Spicy Vegan Mango, Spicy Clam & Sea Salt and Spicy Shrimp & Sea Salt flavors, each sold in 32 oz. bottles. The latter two varieties are also sold in 64 oz. bottles.
Arriba’s cheladas are positioned as healthier alternatives to leading brands in the category; the products are made with organic tomatoes, feature lower sodium and sugar and do not contain high fructose corn syrup, MSG, food coloring or preservatives.
Next month, Arriba will also launch a line of Mexican-style agua frescas called Fresquita, intended to compete with legacy import brands such as Jarritos sodas. The five-SKU line contains only 90 calories per bottle and is made with real fruit, organic cane sugar and natural sweeteners. It will primarily be placed in the international and Hispanic aisles in local and chain supermarkets.
According to Arriba general manager Tim Wright, the brand is aiming to disrupt the Hispanic beverage space by targeting Gen Z consumers. While better-for-you positioning is expected to help Arriba’s product lines on the shelf, marketing efforts will focus heavily on social media platforms such as TikTok.
“We’re really looking to disrupt these big billion dollar categories,” Wright said. “We’re primarily talking to that second and third generation Hispanic consumer, but also Anglo Americans as well.”
Marlon Hernandez, head of non-alcoholic beverages Americas at Molson Coors, said Arriba also allows for strong synergies with Molson’s robust beer portfolio.
In consumer-facing marketing, Molson Coors will serve as the “Official Beer Partner” of Arriba, including through in-store displays showcasing Arriba products alongside Molson-owned beer brands. The company will also run giveaway programs focused around the Super Bowl and Cinco de Mayo.
Looking ahead, Wright said the brand will continue to focus on expansion in the Southwest, with states such as Arizona and New Mexico expected to follow the Texas rollout, and additional markets such as Florida to follow.
Arriba is also developing a ready-to-drink alcoholic line of cheladas, made using its current mixer and Molson-owned beers such as Revolver Brewing’s Mi Cheve Mexican-style lager. The products are expected to launch in Q2 of 2021.
“Arriba is a clear example of a brand moving through the [initial] incubation phase into the regional incubation phase, where Texas is a clear market, before moving to the national scale as a brand,” Hernandez said. “So, No. 1, Arriba is a complement to the partnership between both of our companies and, number two, it is clearly aligned to our story in terms of offering a superior alternative for categories that do not have better-for-you options.”
Molson Coors has forged several partnerships in 2020, including a 10-year distribution deal with Philadelphia-based coffee roaster La Colombe; a distribution agreement with sustainably packaged water brand ZenWTR; a deal with the Coca-Cola Company to make, market and distribute Topo Chico branded hard seltzer in the U.S.; a joint venture between Molson Coors and D.G. Yuengling & Son to expand distribution of the Pennsylvania beer company’s products west of the Mississippi River; and a deal to import Duvel products in Canada. In January, the company acquired Michigan craft brewery Atwater Brewery.