Molson Coors’ bet on Dwayne Johnson’s Zoa Energy looks promising

Zoa Energy, Molson Coors Beverage‘s latest bet beyond beer, seems to be paying off for the brewer.

The new energy drink was created by actor and former professional wrestler Dwayne Johnson, his ex-wife Dany Garcia, her current husband Dave Rienzi and Juggernaut Capital founder John Shulman. The brand touts itself as a healthier, more natural energy drink. Molson Coors owns a minority stake in the brand and serves as its distribution partner, helping cans of Zoa hit shelves over the past four months.

“It’s the number one new energy drink in the latest four weeks of IRI [data],” said Pete Marino, president of Molson Coors’ emerging growth division. “It’s very early days, but it’s been tremendously successful thus far.”

Zoa is currently sold at more than 26,000 retailers, surpassing 100,000 points of distribution.

The energy drink is part of Molson Coors’ larger plan to reinvent itself as more than just a beer company. In 2020, it formally swapped the word “Brewing” in its name with “Beverage” to indicate the shift in its strategy.

The change comes as U.S. consumers drink less beer, opting for hard seltzer or spirits instead. Last year, overall beer volume declined 2.8%, despite total alcohol consumption increasing by its highest rate in nearly two decades, according to industry tracker IWSR. In Molson Coors’ second-quarter earnings release, the company said that the results of its non-alcoholic brands like Zoa have already surpassed expectations for the whole year.

As Molson Coors expands its drink portfolio beyond beer, it’s looking to three drink categories specifically to drive growth: ready-to-drink coffee, functional water and energy drinks. It has a distribution partnership for canned coffee drinks with La Colombe Coffee Roasters and recently took a stake in ZenWTR, an alkaline water brand that uses entirely recycled packaging.

All three beverage segments that Molson Coors is targeting have seen climbing sales in recent years. For example, the $16 billion energy drink category has seen consecutive double-digit retail sales growth over the last three years ended July 31, according to Nielsen data. And Molson Coors already has a built-in network to distribute the beverages.

“The energy drink category is dominated by [convenience stores], and nobody services the c-store channel better than the beer network and beer distributors,” Marino said.

According to Nielsen data, convenience stores accounted $10.57 billion in energy drink sales in the U.S. in the 52 weeks ended July 31, nearly double the amount of sales from grocery, drug and club stores combined.

“We spoke to a number of other energy drink companies that were either existing or emerging, and then we had the opportunity to hear about Zoa,” said Marino. “That was the one that we really wanted to anchor our energy drink play.”

One point in Zoa’s favor: Johnson’s celebrity. He regularly promotes Zoa — and his other projects — to his 262 million Instagram followers. He most recently posted about…