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Can Hard Mountain Dew Fix Boston Beer's Ailing Truly Seltzer Business?

The brewery is partnering with Mountain Drew for an alcoholic version of the Baja Blast drink.

In the latest instalment of popular soft drinks being made alcoholic, the fourth flavor of Mountain Dew's "HARD MTN DEW" line will be Taco Bell's famous Baja Blast drink.

Back in August, Pepsi  (PEP) - Get PepsiCo, Inc. Report's Mountain Dew brand and the company behind beer brands like Samuel Adams and Angry Orchard announced that they would launch a line of lightly alcoholic seltzers known as "HARD MTN DEW" — set to hit shelves in February 2022, the 24-ounce cans would come in original, watermelon and black cherry flavors.

Boston Beer owns the Truly line of hard seltzer which has slumped after being a very strong seller.

Baja Blast Mountain Dew Drink Lead

Taco Bell's Baja Blast Has A Major Following

But as Boston Beer Company  (SAM) - Get Boston Beer Company, Inc. Class A Report first told CNN in an exclusive interview, a fourth flavor is now being added into the fold: that of Mountain Dew's popular Baja Blast. The tropical lime-flavored drink has a signature teal color and began its life on Taco Bell menus in 2004.

Created to have vaguely Tex-Mex flavors that go alongside with the fast-food restaurant's burritos and tacos, the Baja Blast quickly became a fan favorite with its own following on Reddit — it now comes in a canned version as well as in the form of a boozy frozen slushy served in Taco Bell locations that are licensed to sell alcohol.

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What's Boston Beer Got To Do With It?

The fourth flavor marks a natural step for the Boston Beer Company; current CEO Dave Burwick was head of Pepsi's marketing at the time Baja Blast was created and, according to CNN, played an "instrumental" role in making it a success.

But there may be another reason the company got behind Baja Blast —  while the Boston Beer Co. launched its Truly line of hard seltzers in 2016, sales have dropped steadily throughout 2021 as Americans turned to more health-conscious beverages. In a past earnings report, the company named this sector's "decelerating growth trends" as the reason for numbers that sent its stock tumbling by more than 26% percent. (At $413.79, they are currently down 55.28% year-over-year.) 

Neither Boston Beer Company nor Pepsi elaborated on the reasons behind picking Baja Blast as the fourth flavor. But in the last few months, the customer craving for alcoholic versions of popular soft drinks has been growing.

In a slew of recent announcements, Coca-Cola KO announced that it was partnering with Corona beer owner Constellation Brands STZ for an alcoholic version of the popular Fresca soft drink as well as launching a line canned cocktails under the Simply juice brand with Molson Coors Beverage TAP.

Boston Beer famously had to destroy millions of cases of Truly after demand for the beverage dropped.

“We were very aggressive about adding capacity, adding inventory, buying raw materials, like cans and flavors, and, frankly, we overbought,” Boston Beer Chairman Jin Koch,said in an interview on CNBC's Closing Bell. “And when the growth stopped, we had more of all those things than we were going to be able to use because there is shelf life. We want Truly to have that fresh, bright taste, so we’re going to crush millions of cases of product before it goes stale.”