Dive Brief:
- The venture capital arm of Constellation Brands has acquired a minority stake in Hiyo, a nonalcoholic “social tonic” containing a blend of functional ingredients, including adaptogens, nootropics and botanicals.
- Constellation’s senior vice president of new business ventures, John Utter, said in a statement the Hiyo investment aligns with the aims of beverage giant’s VC group, which is to capitalize on emerging categories.
- The Modelo brewer’s investment could help the brewer expand its presence in the growing category. Hiyo’s health halo could also help it stand out in the crowded ready-to-drink category, as consumers seek out beverages that give them more of a nutritious benefit.
Dive Insight:
As more consumers moderate their drinking, Constellation Brands is hoping to succeed in the growing nonalcoholic RTD market. In the press release, the alcohol giant pointed to Nielsen IQ data showing that over 93% of nonalcoholic drink buyers also purchase alcoholic beverages.
“[Hiyo’s] distinctive brand and delicious liquid make it clear to see why Hiyo is one of the fastest-growing names in the functional non-alcoholic space, and we look forward to collaborating with the team to help bring their innovative products to even more consumers,” Utter said in a statement.
Hiyo sells drinks in four flavors: Blackberry Lemon, Peach Mango, Strawberry Guava and Watermelon Lime. Each can contains 30 calories, and features ingredients targeting immunity like ashwagandha, L-theanine, lion’s mane, lemon balm, passion flower and ginger.
The brand’s drinks are sold in 3,000 retail stores across the U.S., including Whole Foods. The brand plans to launch additional products and expand its reach throughout 2025.
Adaptogens, which have been used in Asia for centuries, are a collection of herbs, fungi and plants that proponents attribute with an array of therapeutic benefits including improved gut health. Their use grew in 2020 amid the COVID-19 pandemic, as consumers sought out unique ingredients that can improve their immune system. Food and beverage brands have infused them in a variety of products, from coffees to desserts.
Hiyo is not Constellation’s first foray into the booze-free beverage category. In 2023, the Corona producer acquired a minority stake in Töst, a brand producing “never alcohol” sparkling cocktails.
Other brands in the nonalcoholic cocktail and seltzer category are leaning on health benefits to set themselves apart from the pack. In 2022, pop star Katy Perry debuted De Soi, a line of alcohol-free apéritifs, which contain adaptogens like reishi mushroom and ashwagandha.
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