Monster considering spiked seltzer launch, could boost sales by $76M: Stifel
Stifel analysts said Monster-branded alcoholic beverage could hit shelves by next year
Energy drink maker Monster Beverage Corp. could soon make a lucrative foray into the booming spiked seltzer category, analysts at Stifel Nicolaus said in a note to investors Monday.
Stifel analyst Mark Astrachan said Monster is “considering introducing an alcoholic beverage, most likely a seltzer” in the coming months. The firm predicts that Monster will partner with a large beer distributor to launch the new product by as early as 2021.
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Reign captured more than 3 percent of the energy drink market share within a year of its launch. A Monster-branded drink that captured a similar share of the spiked seltzer market would generate an additional $76 million in annual sales, according to Stifel.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MNST | MONSTER BEVERAGE CORP. | 55.13 | -0.01 | -0.02% |
“We also think the company could launch a non-alcoholic sparkling water under the Monster brand while the alcoholic version will be a new brand, like [Monster-owned fitness beverage brand] Reign,” Astrachan said in the note to investors.
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Monster representatives did not immediately respond to a request for comment.
Monster Beverage Corp. shares rose nearly 3 percent and closed at $71.31 in trading Monday. The company’s stock is up about 12 percent so far this year.
Stifel rates the stock a “buy” with a $77 price target.
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The spiked seltzer market has grown rapidly in recent years, with White Claw and Truly accounting for 88 percent of sales as of the end of 2019. However, the companies have accounted for a 78 percent share over the last four weeks as a slew of competitors entered the market, including Anheuser-Busch’s Bud Light Seltzer.
“We think the success of new entrants suggests an opportunity for Monster given its strong track record of innovation, including, importantly, expanding usage occasions with new products,” Stifel added.
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