PepsiCo knows everyone is drinking cocktails at home. So it's launching a booze mixer

PepsiCo isn't joining the hard seltzer trend just yet. But it wants to be part of your at-home cocktail experience with a new line of mixers.Neon Zebr...

Posted: Feb 25, 2021 9:02 AM

PepsiCo isn't joining the hard seltzer trend just yet. But it wants to be part of your at-home cocktail experience with a new line of mixers.

Neon Zebra, which launches on March 1, comes in four non-alcoholic flavors: citrus-flavored Margarita mix, strawbery-lime-flavored Strawberry Daiquiri mix, lime-mint-flavored Mojito mix and a lemon-flavored Whiskey Sour mix. Each can has a graphic to show consumers how to use the product. The recipe is simple: Add half a can of the strawberry daiquiri mix to 1.5 ounces of rum for a strawberry daiquiri. And tequila to the margarita mix, rum to the mojito mix and whiskey to the whiskey sour mix and voila — you've got a Pepsi-sponsored bar at home.

The runaway success of hard seltzer has inspired non-alcoholic beverage companies to experiment in the space. Coca-Cola is rolling out a hard version of Topo Chico, and AriZona Beverages has a line of spiked products.

PepsiCo isn't ruling out a venture into alcohol. "We look at every opportunity," said CEO Ramon Laguarta when asked during an October analyst call whether PepsiCo would consider selling a hard seltzer. "We will make decisions in the coming quarters whether this is an area where PepsiCo wants to play," he said.

For now, PepsiCo wants to shake up the non-alcoholic mixer category, said Emily Silver, VP of innovation and capabilities for PepsiCo Beverages North America.

"We saw this mixer category growing quite rapidly over the past few years," said Silver. Consumers ages 21 to 30 have been "increasingly" drinking cocktails at home, she said. "This was true before Covid. It's only accelerated during Covid," she added, saying that she expects the trend to stick around after the pandemic ends.

Competition in the mixer space is fierce, said Donna Hood Crecca, principal at Technomic, where she heads the adult beverage practice. The segment is "really crowded, really competitive, really fragmented," she said. "It's a tough space to get into," she said.

In recent years, upstart mixer brands have emerged touting high-quality ingredients.

Before the pandemic, bars and restaurants were starting to use fresh juices and house-made mixers, said Crecca. That trend translated to retail with packaged mixers, like those made by Cheeky and Q Mixers, that avoid artificial ingredients.

Silver's team noticed that trend as well — Neon Zebra is made without artificial sweeteners and uses juice (but also plenty of sugar, to the tune of 36 grams per can). PepsiCo hopes the can's small, 7.5 ounce size will be attractive to customers. "Mixers are traditionally in these big bottles," said Silver. "You may buy one for a party ... drink a little of it, and then it sits in the fridge, sometimes for years," she said. The cans are sold in single-flavor six packs for about $7 or $8 per pack.

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