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News Alert: Beam Suntory Expands In RTD Cocktail Segment With On The Rocks Acquisition

September 2, 2020

Beam Suntory is bolstering its position in one of the fastest-growing areas of the drinks market, agreeing to acquire premium RTD cocktail brand On The Rocks for an undisclosed sum.

Founded in 2015 by hospitality veterans Patrick Halbert and Rocco Milano, On The Rocks is distributed mainly in the U.S. and Canada and saw sales double in the first six months of this year amid the rapid rise of the premixed cocktail segment, Beam Suntory said. The drinks giant had an existing minority interest in the company, whose offerings include cocktails featuring Beam Suntory brands such as Knob Creek Old Fashioned, Hornitos Margarita, Effen Cosmopolitan, and Cruzan Mai Tai. On The Rocks retails at $11 a 375-ml. and also comes in 100-ml. and 200-ml. sizes. Trailing 12-month volume was approximately 130,000 9-liter cases.

“We have an ambition to become No.-1 in the spirits-based ready-to-drink market, and On The Rocks will be a key growth platform that we’ll build along with our fast-growing premixed highball products,” said Beam Suntory president and CEO Albert Baladi. “We see tremendous opportunity to expand the OTR brand to new occasions, formats, cocktail recipes, and the low-abv space.”

In an interview with SND, Beam Suntory North America president Greg Hughes said Texas is among the strongest markets for On The Rocks currently, but that the brand has plenty of room to continue filling out its distribution moving forward. “At-home cocktailing and cocktails to-go have obviously accelerated, and we think that will be long-lasting,” Hughes explained. “The trend toward convenience and quality isn’t going away.” Ultimately, Beam Suntory projects that the premium RTD cocktail segment can reach 2 to 3 million cases in the U.S. over the next five years or so, and it intends to be among the leaders driving that growth. We’ll have more on the On The Rocks acquisition in tomorrow’s SND.—Daniel Marsteller

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