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Molson Coors eyes bigger soft drinks pipeline with LA Libations incubator stake

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Molson Coors has bought a minority stake in US soft drinks incubator LA Libations in a deal that gives the brewer first refusal on new beverage brands.

LA Libations has given help to beverage brands including BodyArmour and Zico coconut water

LA Libations has given help to beverage brands including BodyArmour and Zico coconut water

The company said today the long-term partnership with LA Libations, which has helped bring brands including Zico coconut water and BodyArmour sports drink to market, offers a stronger foothold for Molson Coors in the non-alcoholic beverage category. The announcement comes a few weeks after Molson Coors revealed it would broaden its portfolio beyond beer as part of a company overhaul.

Molson said the LA Libations deal allows it to add to its M&A pipeline and "pursue opportunities in this space without needing an extensive non-alcohol infrastructure".

"At a time when much of the growth in the beverage industry is coming from brands and categories that often were non-existent five years ago, [LA Libations'] expertise in creating and nurturing brands is especially valuable," said Pete Marino, president of emerging growth for Molson Coors, the division under which the partnership will be managed.

Under the terms of the deal, Molson Coors will get a stake in new products launched by LA Libations and access to brand creation, brand building and consulting services. The company will also have exclusive rights to purchase brands created by LA Libations in full. For brands it opts not to purchase, Molson Coors will hold a financial stake in LA Libations' ownership of the brand.

Beverages developed under the partnership will be tested and launched initially in the Los Angeles metro area.

Financial details of the deal were not disclosed.

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