Monster Beverage weighs venturing into alcohol, soft drinks business

Energy drinks maker Monster Beverage Corp is considering expanding its business line beyond energy drink.

The US-based company said at a shareholder’s meeting on Thursday that it was looking to grow its portfolio into different categories beyond energy drinks.

“We do have an appetite to look at alternative brands and to develop more beverages in the nonalcoholic … as well as the alcoholic market,” said CEO Rodney Sacks.

Some of the categories being considered include alcoholic malt beverages, hard seltzers and spirits.

“There are other products in alcohol, whether on the malt side, hard seltzer or hard alcohol/spirits side,” Sacks said. “They may be a good opportunity … it’s something we would certainly be open to.”

Any move into non-alcoholic beverage will come after a non-compete clause it has with its largest investor partner, Coca-Cola expires in one year. However, it does not preclude the company from pursuing a mergers & acquisition on the alcohol side sooner.

Coca-Cola has been partners with Monster since 2015 when it acquired 16.75% stake in the energy drinks company and has been using its global distribution network to market the brand. However, that relationship has come under strain recently when Coca-Cola decided to launch its namesake energy drink brand. Monster said the move by Coke to start making its own Energy drinks violates its agreement with the soft drinks giant. Both companies are currently in arbitration, which was the mechanism agreed to by both companies to resolve their differences.

Monster CEO added that Coca-Cola would not be its preferred partner to distribute its new products despite having a stake in the energy drinks company. He said that there are products in the pipeline but will look outside the Coca-Cola system to distribute them because the group might lack the “patience or tolerance” to develop fledgling brands.

The energy drinks maker launched a new “Performance” energy drink in the US in March called Reign, to compete against VPX’s Bang and Redbull, which the CEO said he was happy with the early results.

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