Continuing to bolster its adult non-alc (NA) portfolio, Constellation Brands has acquired a minority stake in Hiyo, a functional ready-to-drink tonic, the company announced today.
Los Angeles-based Hiyo was founded in 2021 and offers four seltzer varieties in 12 oz. slim cans using the properties of ashwagandha, l-theanine, lion’s mane, lemon balm and passion flower to create relaxing “social tonics.” Last month, Hiyo announced a $19 million funding round to fuel its ambitions to scale.
The investment shared today was made through Constellation’s venture capital group, which in 2023 acquired a stake in TÖST, an alcohol-free sparkling beverage brand, and a 2021 investment in HOP WTR, a calorie-free, NA sparkling water infused with adaptogens and nootropics.
In a statement, Constellation Brands highlighted that more than 93% of NA consumers are also purchasing drinks that contain alcohol, according to marking research firm NIQ, “meaning Hiyo extends the options and opportunity for participation in traditional beer, wine, and spirits occasions, making it a strong complement to Constellation’s current portfolio.”
Constellation Brands capped another strong year for its beer business (+9%) in FY 2024, with its NA version of Corona as the leading dollar share gainer in the NA beer segment, according to CEO Bill Newlands last April. Sales metrics have gotten softer in the company’s latest quarter.
Now, the investment in Hiyo gives the beer giant another position in the burgeoning adult NA space, which topped $823 million in sales 2024, a 27.2% increase year-over-year, according to NIQ scan data. Canned alcohol alternatives are still a relatively small percentage of the total adult NA pie, but the growth for NA RTDs (+165%) largely outweighs large format NA spirit bottles (+39%) in the last 52-weeks ending January 25, according to NIQ data shared by 3Tier Beverage. Within all RTDs, NA alternatives were the fastest growing segment (+167%) in 2024.
Hiyo is among the RTDs gaining traction. Along with its distribution in Sprouts, Meijer and Wegmans, Hiyo launched in H-E-B grocery stores last month. Last spring, the brand announced it had signed a five-year deal with electronic music event promotion company Insomniac, bringing Hiyo to all of the promoter’s festivals. The brand boasts more than 3,000 points of distribution across the U.S.
“With Constellation’s deep expertise and expansive distribution network, we believe this partnership will help us provide consumers with convenience and access to Hiyo, accelerating our mission to have Hiyos everywhere that beer, wine, and spirits are served,” said Evan Quinn, co-founder and CEO of Hiyo.