The Liquid Brief (26/08/W4) | When the Playbook Stops Traveling

Having the Brand and the Distribution Is No Longer Enough: Drinks Companies Are Learning to Change the Playbook

Large drinks companies have global distribution. Beverage giants already have mature retail networks. Established brands often come with loyal consumer bases.

Yet those advantages are becoming harder to transfer directly from one market, category or occasion to another.

This week, developments ranging from Monster’s alcohol business and Pernod Ricard’s results to Indian companies entering spirits, local production in Malaysia and US restaurants redesigning beverage service all pointed to the same challenge: a formula that works in one part of the business may not work somewhere else.

The next phase of competition may therefore be less about who has the greatest scale, and more about who can read the environment quickly enough to adapt products, supply chains, service models and routes to market.

Weekly Highlights

Monster shows that even the company that understands convenience retail may not automatically understand alcohol

Monster Beverage’s second-quarter net sales, excluding its alcohol business, increased 20.8%. Monster Brewing, by contrast, recorded a 15.2% decline in first-half sales.

The contrast becomes more significant when viewed against Monster’s original strategy. The company paid US$330 million for CANarchy in an effort to acquire brewing capacity, distribution infrastructure and a platform from which it could apply its branding and convenience-channel expertise to alcohol.

By March, cumulative impairment charges associated with those alcohol assets had reached US$232.4 million, equivalent to roughly 70% of the original acquisition price.

The broader lesson is not that Monster simply chose the wrong products. It challenges a much more intuitive assumption: having consumers, distribution and marketing expertise does not mean those capabilities can be transferred unchanged into another beverage category.

Alcohol still operates through its own occasions, regulations, brand language and purchasing behaviour.

Pernod Ricard’s problem is not that every market is weakening at once

Pernod Ricard reported a 3.9% organic decline in sales for fiscal 2026, including a 14% drop in the US and a 19% decline in China.

Excluding those two markets, however, the rest of the business grew organically by 0.5%. The pace of decline also moderated during the second half, from 5.9% in the first half to 1.3%.

That makes the broad description of a “weak global drinks market” increasingly inadequate.

What is emerging instead is greater divergence between markets. A global drinks company can simultaneously face weaker US consumption, softer premium demand in China and continued growth elsewhere.

The value of global scale is therefore becoming less about selling the same brand everywhere and more about being able to adjust pricing, portfolios and resources to very different market conditions.

Asian expansion is moving toward deeper local operating structures

India’s Allied Blenders & Distillers announced that Officer’s Choice Blue will be produced in Malaysia through a local partner. It is the company’s first production arrangement outside India and will include 750ml, 180ml and 90ml formats.

Elsewhere, Varun Beverages, a major PepsiCo bottling partner, has formally entered the alcohol business. Rather than placing the new operation inside its existing beverage structure, it has established a separate company, KIVA Spirits, and brought in a former Diageo executive to lead it.

Both moves point to a deeper form of international expansion.

Entering a new market or category is increasingly about more than extending an existing supply chain. Companies are designing separate corporate structures, management teams, production arrangements and pack formats specifically for alcohol.

Beverages are becoming traffic drivers in their own right

New research from the National Restaurant Association found that 87% of full-service restaurant operators and 80% of limited-service operators believe beverages can help drive customer traffic.

Younger consumers are also increasingly visiting restaurants during the afternoon specifically for drinks, while 83% of delivery customers say they would order beverages more often if packaging performed better in transit.

That changes the role of beverages inside restaurants.

A drink no longer needs to exist only as an addition to a meal. Afternoon visits, takeaway, delivery and short drinking occasions can all become revenue opportunities in their own right.

When ice becomes part of the cocktail itself

Shaved-ice cocktails have appeared across a number of US bars this summer, from Daiquiris at New York’s Bar Kabawa to Midori Sours and Japanese-inspired serves elsewhere.

In these drinks, ice is no longer simply there to chill the liquid.

Bartenders have had to think more carefully about shaving equipment, crystal size and the dilution caused by rapid melting. At the same time, producing a mound of shaved ice by hand can become part of the theatre of the serve — something customers notice, film and potentially order after seeing it across the room.

This is not enough to suggest that every bar is about to buy a shaved-ice machine. But it is a useful cocktail signal: bar differentiation is moving beyond recipes and into tools, texture and the physical act of service.

Industry Trends

Scale advantages increasingly need to be translated

Monster has distribution, consumer knowledge and substantial brand-building capability, yet those assets have not automatically produced growth in alcohol.

Varun Beverages is taking a different approach. Before building its alcohol business, it created a separate company and recruited management with direct drinks-industry experience.

Together, the two cases raise a more important question than whether large beverage companies can enter alcohol.

The real question is whether, after entering, they are willing to accept that a different category requires different capabilities.

For large beverage groups, “we already have distribution” may increasingly be the starting point rather than the answer.

Global brands increasingly require local operating models

The sharp differences in Pernod Ricard’s market performance, ABD’s decision to bottle locally in Malaysia and renewed alcohol trade tensions between Canada and the US all make a single global supply model harder to maintain.

Brand identity can remain global.

Where the product is made, which format is sold, who distributes it and what the consumer ultimately pays may need to become increasingly local.

That adds operational complexity. But in a more uncertain trade and regulatory environment, the ability to reroute the business is becoming valuable in itself.

Beverage design is expanding beyond the recipe

Restaurant research is focusing on packaging, delivery and afternoon demand. Bartenders are experimenting with ice, equipment and visual presentation. In London, Workshop Coffee’s new location moves from coffee by day into wine, Champagne, cocktails and aperitivo-style food in the evening.

These are not all expressions of the same drinks trend.

But they do point toward a common change.

The commercial value of a beverage increasingly depends on how well it fits different times, spaces and service formats — not simply on what ingredients are in the glass.

Brands & M&A

Pernod Ricard acquired the remaining shares in Italicus this week, taking full ownership of the Italian bergamot aperitivo brand. Since its launch in 2016, Italicus has entered 47 markets and sold more than three million bottles.

The notable point is that Pernod Ricard is simultaneously pursuing substantial efficiency improvements while still choosing to commit further capital to a brand built around a clearly defined drinking occasion.

In Australia, Chris Hemsworth became a co-owner of Archie Rose as the distiller prepares for its first US launch later this year, followed by expansion into Asia and New Zealand, with the UK and European Union planned for 2027.

The celebrity involvement is less commercially interesting than the timing.

An ownership change and an international expansion strategy are happening simultaneously. The next test will be whether Archie Rose can preserve the characteristics that made it distinctive in Australia as it moves into a much broader set of markets.

New Product Developments

Kraken has taken its spiced rum brand into ready-to-drink cocktails for the first time, while Teeling has entered canned cocktails with Phoenix Twist.

The challenge for launches like these is no longer simply whether consumers value convenience.

Brands have to translate the flavour, image and pricing logic that works in bottled spirits into a completely different competitive environment: the refrigerated shelf and the ready-to-drink occasion.

Putting a familiar brand name on a can does not automatically create a new drinking habit.

Bar & Hospitality

For bars, the more interesting development this week is not one particular fashionable cocktail, but the widening range of beverage service formats.

California lawmakers approved an extension of cocktails-to-go through 2031, while restaurant research suggests that packaging quality directly affects whether consumers add beverages to delivery orders.

Inside the bar, shaved-ice cocktails are turning equipment, preparation and visual theatre into part of the product itself.

That also changes the role of barware.

Glassware, ice, packaging and preparation equipment no longer simply help execute a recipe. They increasingly shape how consumers perceive a drink — and whether they decide it is worth ordering.

The Tales of the Cocktail Foundation also announced that Tales on Tour will head to Washington, D.C. in September, with programming covering education, bartender wellness, guest shifts and hospitality events.

For the professional bar community, that is another reminder that technical skills are only part of the equation. Talent development and working conditions remain important areas to watch.

Marketing & Campaigns

Campari-owned Espolòn introduced its new global brand platform, “Ride the Rooster,” beginning in the US before expanding into Italy, Mexico, Canada and Australia.

What makes the positioning notable is that it does not try to make premium tequila feel more exclusive.

Instead, the campaign pushes back against the membership lounges, VIP ropes and complicated tasting language traditionally associated with ideas of luxury.

It represents a different vocabulary for premiumisation: the product can remain premium without making consumers feel they need specialist knowledge, exceptional spending power or access to a particular social circle to enjoy it.

At a time when consumers are paying greater attention to whether an experience feels worth the money, reducing psychological distance may become just as important as raising price.

MJFLAIR Insight

The most important takeaway this week is straightforward: the drinks industry is discovering that successful models are becoming harder to copy.

Monster has established distribution but has struggled to replicate its success in alcohol. Pernod Ricard’s global scale has not insulated it from simultaneous weakness in two major markets. ABD and Varun are instead building new production and organisational structures for different markets and categories. At bar level, the same logic appears in takeaway packaging, afternoon drinking occasions and even the choice of a shaved-ice machine.

Over the next six to 12 months, the more revealing metric may not be how many markets a company enters or how many SKUs it launches. It may be how much operational flexibility and decision-making authority it places closer to individual markets. Companies capable of adjusting pack sizes, supply chains, production locations, service formats and drinking occasions more quickly may have a better chance of turning demand into actual business.

If consumer behaviour, tariffs and regulation continue to diverge across markets over the next 18 to 24 months, the industry’s definition of efficiency may also change.

The old model of efficiency was to make one system bigger.

The next may be to protect the core of the brand while changing the surrounding operating model as quickly and economically as possible.

When a successful model can no longer simply be copied from one market or category to another, which becomes more valuable: greater scale, or the ability to change the playbook faster?

 

This industry brief is compiled and analyzed from publicly available industry information and news published during the specified period. It is provided for commercial reference only and does not constitute investment, legal, or business advice.