Hard Mountain Dew Seltzer Coming: Will Customers And Investors Give The Drink A Chance?

One of the most popular carbonated soft drinks is getting entry into the fast-growing hard seltzer market thanks to a partnership between two beverage giants.

What Happened: A partnership between Boston Beer Company Inc SAM and PepsiCom, Inc. PEP will produce the launch of HARD MTN DEW.

The new flavored malt beverage will have an ABV of 5% and features one of the most iconic and bestselling pop brands.

“The Boston Beer Company partnership combines two recognized leaders in our respective industries to address the changing tastes of drinkers and we are thrilled at the opportunity to create HARD MTN DEW that maintains the bold, citrus flavor fans know and expect,” PepsiCo North America CEO Kirk Tanner said.

The beverage will be developed and produced by Boston Beer Company. Pepsi will create a new entity to sell, deliver and merchandise the beverage.

“We know the adult drinkers’ tastes are evolving and they are looking for new and exciting flavorful beverages,” Boston Beer CEO Dave Burwick said.

HARD MTN DEW is expected to hit store shelves in early 2022.

Related Link: Watch Out Truly, Pepsi Could Be Launching A Hard Seltzer

Why It’s Important: For years, Boston Beer was ahead of the game with its Truly hard seltzer brand. New entries into the growing market have caused market share to decline for Boston Beer’s brand.

Boston Beer reported revenue of $602.8 million in the second quarter, up 33.3% year-over-year. The second-quarter growth came in slower than the previous quarter with first-half sales now up 46.7% year-over-year.

Shipments in the second quarter were up 27.4% year-over-year and are up 41.3% in the first half of the fiscal year.

“Our 24% depletions growth for the second quarter decelerated from our first-quarter growth of 48% and was below our expectations as the hard seltzer category and overall beer industry were softer than we anticipated,” the company said.

Truly brand sales were up 2.7x the category growth rate in the second quarter. Truly reported closing the market share gap with the top hard seltzer brand in the quarter.

A new Truly advertising campaign called “No One Is Just One Flavor” featured Grammy award winner Dua Lipa.

Many of the top beverage brands are entering the hard seltzer space. Pepsi's rival Coca-Cola Co KO partnered with Molson Coors Beverage Co TAP to create a hard seltzer for the market. Price Action: On Tuesday, SAM shares are down 3.17% to $663.27 and PEP shares are up 0.052% $154.43.

Photo: Courtesy Boston Beer Company