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Canopy Growth Aligns With Southern Glazer’s For U.S. CBD Beverage Launch

April 21, 2021

Canadian cannabis producer Canopy Growth has partnered with Southern Glazer’s Wine & Spirits to bring its CBD drinks portfolio to the U.S. The partnership begins with Quatreau, Canopy Growth’s top-selling CBD drink in Canada, which recently launched stateside. Quatreau is a line of sparkling water with four flavors: Cucumber & Mint, Passionfruit & Guava, Blueberry & Acai, and Ginger & Lime, all containing 20mg of CBD and retailing for $4 a 12-ounce can.

Southern Glazer’s will bring Quatreau to an initial seven states, including Arizona, Florida, Nevada, and Oregon, among others, with expansion to additional states planned in the months ahead. This partnership with a leading, national distribution company like Southern Glazer’s—which is projecting revenues of $21 billion this year—marks a turning point for the distribution of CBD products in the U.S. Southern’s footprint, coupled with its data and analytics services on the back end, will give Canopy’s portfolio unmatched advantages over its competitors, Canopy says.

“Canopy Growth is one of the first to leverage a nationwide network on this scale,” Julious Grant, chief commercial officer of Canopy Growth, told SND. “Southern shares our enthusiastic view of the category and working with them will give us an immediate advantage. Having this one large-scale distributor will start to eliminate the fragmentation that our competitors deal with. And we’ll have incredible data that Southern has captured about where the products are selling, how they’re selling, and other consumer insights.”

In addition to the physical rollout, Southern Glazer’s will play an important role in Quatreau’s U.S. expansion through its e-commerce platform Proof. “Similar to what they’ve done with wine and spirits, Proof will provide a much broader, scaled reach to Southern’s over 250,000 customers using the platform across the country,” Grant said.

Grant declined to share U.S. sales projections but noted that Canopy plans to pursue a market position comparable to what the brand has achieved in Canada. “Consistent with our position in Canada, where we’re the number-one CBD beverage, we come to the U.S. market with a similar ambition. And having a likeminded distributor partner like Southern that is used to winning in the marketplace—we’re excited about the potential.”

“This agreement reinforces our consumer-focused approach to identifying emerging growth areas where we can add value for our customers,” said David Chaplin, Southern Glazer’s chief growth officer. “There is strong consumer interest in the CBD-infused beverage category and our distribution network is uniquely positioned to deliver the most efficient and effective route-to-market for CBD suppliers and retail customers.”

In a recent interview with SND, Southern Glazer’s CEO Wayne Chaplin said that while the company is getting active in CBD, it has no plans to expand into THC-based cannabis products in the United States until they’re legal on a federal basis. “Our focus in the U.S. will be around CBD,” he said, noting the company has been test-marketing CBD products in the Pacific Northwest with an eye toward expansion. “We believe learning how to do that and building that route to market is the first step in understanding that segment. And until cannabis and THC is legal on a federal level, it’s something that we will not get involved with in the U.S.”

Constellation Brands, which owns a roughly 39% stake in Canopy and has warrants to take its interest up to 55%, also recently strengthened its ties with Southern, awarding the distributor about 70% of its U.S. wine and spirits business across a partnership of 40 states.—Danny Sullivan

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