Arizona Beverage Co.’s company’s CEO has a strategy to bring about a turnaround in the recent downtrend associated with its lost ground in tea drink sales due to competition in the market. The new strategy leads to cannabis-infused beverages. A direction to partner and create cannabis products has been established and has been officially announced, but not yet approved by Dixie’s board of directors.
The current plan between Arizona Beverage Co. and Dixie Brands Inc. will begin with the creation of vape pens, gummies, and a line of different beverages. Beverages included within the current scope of the early phase plan could include classic drinks that are widely recognized and associated with the Arizona brand like tea, lemonade, and coffee. It is expected that the line will launch exclusively in the U.S. and then will expand after some time to Canada and Latin America.
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Dixie Brands will be solely responsible to manufacture each product devised under the scope of the agreement in each state without any assistance in production from Arizona. The products produced by Dixie Brands will then be sold within licensed dispensaries across several states. Another term of the agreement, one that is important to note, is that Arizona would preserve the right to purchase a stake of up to $10 million in Dixie Brands.
The U.S cannabis market hasn’t seen a big beverage brand enter into the space since Heineken partnered with Lagunitas brewery. Heineken and Lagunitas worked together to launch a cannabis-infused sparkling water in 2018 named Hi-Fi Hops. The infused sparkling water wouldn’t compare to the Arizona-Dixie deal as the beverage is only sold in one state, California.
Two other well-known examples of U.S. corporations and the cannabis-infused beverage market would be Constellation Brands Inc. and Molson Coors Brewing Co., the brewer behind the popular Coors Light beer. Both companies decided to establish a plan to develop a cannabis-infused beverage within Canada and not in the United States, but the beverages could easily enter the states after federal regulations are loosened.
Don Vultaggio, Chief Executive Officer and Chairman of Arizona Beverage Co., stated: “You’ve got to be willing to try things. The upside is we’re one of the first ones in an emerging space.”
Overall revenue at Arizona Beverage Co., along with tea sales, is reported to have grown this year by Vultaggio. The company has expanded into different markets with the creation of beef jerky and fruit snack products and intends to launch a seltzer water line that is flavored with fruit juice this month. Construction on a new Arizona Beverage manufacturing plant is expected to finish next year with the goal to produce more products in order to meet consumer demand.
“Right now, we’re not producing enough to meet demand,” said Vultaggio.
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