Jack & Coke to Go Toe-to-Toe with Beer?

At the Deutsche Bank Global Consumer Conference yesterday, analyst Stephen Powers pointed to Coca-Cola’s now brimming portfolio of bev alc brands (through various partnerships: Jack & Coke Fresca Mixed, Topo Chico Hard Seltzer, and more).

Source: Beer Business Daily.

Stephen asked: Should Coke investors “no longer consider a foray into alcoholic beverages as an experiment for the Coca-Cola Company?”

Coca-Cola global CMO Manuel Arroyo responded, calling the space “very interesting.”

He sees consumers “clearly moving” into flavored alcoholic beverages, which Coke considers “the space between beers and soft drinks.”

“We are still experimenting with the three different major segments within that, which are basically hard seltzers, that’s Topo Chico; hard alternatives, where you have the example of Simply; and then premixed cocktails,” like Schweppes pre-mixed cocktails, which they debuted in Brazil last year. Those are “doing actually very, very well,” he said.

As for their newly announced Jack & Coke RTD, “this is obviously a very exciting one, because it involves our most iconic brand,” Manuel said.

“Leveraging the top bar call”. “We are leveraging on the top, number one bar call out there,” he continued.

“There is definitely a lot of excitement. It’s a global deal. We’re only starting in Mexico this year,” with “more markets to come next year.” (Likely, launching the U.S. after the Latin America pilot, as they did with Topo Chico.) He also noted that the product won’t get traditional TV advertising like juggernaut Coca-Cola.

Instead, “it’s going to be very much digital, influencers; it’s tapping a lot into at-home consumption occasions, not necessarily away-from-home that much.”

From a product perspective, he also noted that they’ll have a zero sugar version at 100 calories, besides the “iconic” Jack and Coke.

100-Cal Proposition “Very Interesting vs. a beer.

“So, as someone that likes – not a lot, but once in a while – a beer, and I also like whiskey and Coke, when I look at those 100 calories, obviously coming from the whiskey, it’s a pretty good alternative. Because I’ve got to take care of my health. And versus a beer, it’s a very, very interesting proposition,” he said.

So, we see a lot of potential. We’re still learning. We’re still going to iterate some of the components; the packaging, graphics. And the repeat rate of the liquid, of the formulation, once you taste it – it is just phenomenal. It’s one of our best products, in my mind, ever, in the history of the company.
Coca-Cola global CMO Manuel Arroyo

Brown Forman says Jack & Coke will replace Jack & Cola

Brown-Forman CFO, Leanne Cunningham, also spoke at the Deutsch Global Consumer Conference yesterday, offering up some interesting tidbits as well, including the fate of its current Jack & Cola RTD biz.

Yep, if you didn’t know, B-F already holds a “sizable” Jack & Cola RTD biz.

How big? Well, B-F believes their current Jack & Cola line makes up about 2.5% of the global RTD category, which IWSR pegs at about $39 billion in 2021. So a “sizable” biz indeed – even if spirits-based RTDs are a small percentage of that category in the U.S.

But they’re not looking to add the imminent Jack & Coke line on top of the current biz, no, the plan is to replace the current spirits-based Jack & Cola RTD product with the new Jack & Coke “over a period of time.”

That’s because B-F believes that they can grab an even “bigger” share of the global RTD category with the imminent Jack & Coke line.

We at BBD are watching with bated breath. There are 16 (1.5 oz.) shots in a $20+ 750ML bottle of Jack, and a 2-liter bottle of Coke is $2+, so call it $23 for 16 “home bar” Jack and Cokes – one of the easiest cocktails to make. Conversely, 4-pack cans of the Jack Daniels Whiskey and Cola product currently on the market go for roughly $11.

This upcoming Jack & Coke play will really test just how much people are willing to pay for brand-name convenience. Stay tuned.

What about B-F’s Agreement with Pabst? Any impact there?

B-F’s plans to replace its current Jack & Cola line with the coming Jack & Coke brand over time, also begs a stateside question of “how might this impact B-F’s current ‘long-term’ agreement with Pabst?”

Recall, Pabst and B-F struck a deal in late 2020, which saw Pabst gain the exclusive rights to sales and distribution of Jack Daniel’s Country Cocktails, which is going gangbusters, and has a Jack & Cola offering (Black Jack Cola) in its lineup.

So we dug around to find out what kind of role Black Jack Cola plays in the JDCC lineup, and if this latest development would have any impact on the partnership with Pabst.

Turns out that Black Jack Cola is the 5th largest JDCC brand and is growing double-digits (+15%), per Nielsen scans for the four weeks ending June 4.

And it appears Pabst will continue to reap that growth, as we understand that Brown-Forman’s RTD partnership with Coke has no impact on the Pabst JDCC partnership.

So no, no hiccups expected for this humming line, which now ranks as the 8th largest FMB brand, and is posting the second fastest growth trend for an FMB (+52% in the latest four weeks) and the third fastest trend in beer’s top 50 brands.

And even if Black Jack Cola (again the 5th largest brand in the line) fell by the wayside with the emergence of the Jack & Coke line, the JDCC line looks like it would carry on just fine.

Its top selling brands, Downhome Punch and Southern Peach, are both growing faster than Black Jack Cola, up 27% and 36%, respectively. And Black Jack Cola isn’t found in any of the JDCC Variety Packs (a 12 pack bottle VP and an 8 pack, 16 oz. can VP) both of which are the 4th ranked VP’s in each category.