US brewing giant Molson Coors Beverage Company is to purchase a majority stake in Zoa Energy drinks.
Neither the financial terms nor the size of the interest were disclosed.
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The Coors Original brewer will “lead” Zoa’s marketing, retail and direct-to-consumer sales following the transaction, Molson Coors said today (7 November).
The news of the acquisition came alongside the publication of the group’s third-quarter financial results, which included a cut to its forecast for annual sales.
Molson Coors has distributed the energy drinks brand in the US and held a minority stake in the business since 2021.
It “significantly increased” its shareholding in Zoa in September 2023 and was granted a place on the company’s board of directors.
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By GlobalData“We’re building a winning portfolio that offers consumers choices across a wide range of occasions, and non-alc is a key part of that strategy,” Molson Coors chief commercial officer Michelle St. Jacques said in a statement today (7 November).
“Zoa opens the door for us to participate in more parts of the day and incremental opportunities beyond our core business. We’ve built a strong foundation with ZOA over the past three years and we see a ton of opportunity for this brand to achieve its next stage of growth and scale.”
The move comes weeks after Keurig Dr Pepper‘s acquisition of Zoa’s sugar-free energy peer Ghost.
Zoa was co-founded by actor Dwayne “The Rock” Johnson, Dany Garcia, Dave Rienz and John Shulman in 2019.
The company’s portfolio includes a range of zero-sugar energy drinks in flavours such as tropical punch and green apple.
It also has a line of pre-workout powders in fruit punch, cherry lime and wild berry flavours.
The brand is sold at over 25,000 retail stores and 86,000 distribution points across the US and Canada.
Johnson is expected to “remain a visible face” for Zoa in future social media campaigns.
“Since day one, Molson Coors has shared our passion for Zoa Energy, and as a partner, they’ve been pivotal to bringing new consumers into the energy space with Zoa and keeping them coming back,” Johnson said.
“Zoa is all about crafting drinks that help our loyal and growing consumers show up as their best selves every day, and Molson Coors’ commitment to the brand will give it an enormous amount of firepower in the next phase of growth.”
Molson Coors sales forecast
Molson Coors’ move to up its shareholding in Zoa was announced alongside a cut to its top-line guidance for 2024.
The Blue Moon producer now expects to see its net sales decline 1% compared to its earlier forecast of a “low single-digit increase versus 2023”. Molson Coors said the change to its outlook came amid the “softness” of the US beer market during “peak selling season”.
It has reaffirmed its forecast of “mid single-digit increase” for underlying income (loss) before income taxes. Underlying diluted earnings per share are also expected to still see mid-single-digit growth, “but narrowing to the high end of the range”.
Molson Coors saw its reported net sales drop 7.8% in the three months ended 30 September to $3bn, while gross sales were down 7.7% to $3.6bn. Income before taxes dropped 39.1% on 2023 to $331.4m.
Financial volumes were down 12.3% to 20.6 billion hectolitres in the period. Total global brand volumes decreased 4.4% to 21 billion hectolires.
In the first nine months of the year, Molson Coors’ net sales stayed flat at $8.9bn, while gross sales dipped 0.9% to $10.5bn.
