Drunk off Dunkin’ and Eggos? Why every brand is spiking its drinks

The new line of coffees and teas from Dunkin’ Donuts comes with a little something extra. Namely a bit of hooch. This week, Dunkin’ announced a partnership with Boston-based Harpoon Brewery to launch a line of canned spiked coffees and iced teas. The boozy coffees, which contain 6% alcohol, come in four flavors (original, mocha, vanilla, and caramel), as do the spiked teas (slightly sweet iced tea, half and half, strawberry dragonfruit, and mango pineapple), which contain 5% alcohol.

If that wasn’t enough alcohol inspired by the breakfast table, this week Kellogg also announced a partnership with Sugarlands Distilling on an alcoholic waffle-inspired beverage: Eggo Brunch in a Jar Sippin’ Cream. The cream-colored concoction, which comes packaged in a mason jar, is a whopping 20% alcohol and supposedly tastes of “toasty Eggo waffles drizzled in syrup.”

If it feels like you’re seeing more and more spiked versions of things, that’s because you are. Ever since spiked seltzer brands like White Claw took off a few years ago, more brands have been launching boozy versions of popular nonalcoholic drinks. In March, SunnyD debuted an orange vodka seltzer; in May, we got “hard” Lipton Ice Tea; and in June, AriZona debuted three spiked versions of its iced tea.

“Consumers are passionate about this iconic brand, rooted in nostalgia but with a taste that resonates today,” Ilene Bergenfeld, chief marketing officer of Harvest Hill Beverage Co., said in a press release announcing the SunnyD seltzer. “Many have told us that they enjoy SunnyD as a mixer and asked for this product. So we looked at the hard seltzer category and thought, Good. But we can do better. And SunnyD Vodka Seltzer was born.”

Just last year, Pepsi and Boston teamed up to launch a hard Mountain Dew. And Coca-Cola, which launched its first alcoholic beverage, Lemon-Dou, in Japan in 2018, now has a whole bar’s worth of spiked beverages, including Topo Chico hard seltzer, Simply Spiked lemonade, Jack Daniels & Coca-Cola, Fresca Mixed, and Schweppes premixed cocktails.

The so-called ready-to-drink (RTD) alcohol space, which also includes canned margaritas and whiskey sours, has seen a huge boom in recent years. In 2021, RTD alcohol sales grew 33% to $1.6 billion, according to Statista. In 2022, the space grew an additional 1.3% to a value of $4.8 billion.

“It’s not just the brands that are trying to build relevance or trying to turn their brand around [that are launching alcoholic versions of drinks], it’s really everyone,” says Franklin Isacson, managing partner at Coefficient Capital, which leads early-stage investments in consumer brands. Isacson also previously worked in strategy at alcohol brand Diageo and brand marketing at LVMH.

He notes that these drinks are often made not by the brands themselves, but through partnerships with existing alcohol brands that are paying a licensing fee for the use of another brand’s name and trademark.

The benefit of licensing names from nostalgic products is that people are more inclined to try the drinks because they remember the brand fondly, he says, or they know that they like the nonalcoholic version of the beverage so they presume they’ll enjoy the alcoholic version as well.

“In a world where canned alcoholic cocktails have been such a proliferation of brands and skews and flavors, how do you cut through the clutter?” he says. “Having a brand that is a household name obviously makes sense.”

Isacson adds, “It’s definitely cheaper than building a whole brand from scratch. For the alcoholic companies, it makes all the sense in the world.”

He notes that for the nonalcoholic brands lending their names to the products, the partnerships seem a bit riskier.

“The benefit is that it makes the brand younger, more relevant, and marketed to a new demographic,” Isacson says, noting, however, that the products also ultimately could hurt those brands if they miss the mark with consumers. SunnyD’s alcoholic offering, for instance, has received a good deal of backlash online for not tasting like SunnyD.

Still, for brands like Coke or Pepsi, alcoholic products offer a new potential growth area.

“If you take a step back and look at companies like Coca-Cola and Pepsi, their core categories are extremely slow growth right now,” says Arpon Ray, partner at Coefficient Capital. “They’re looking at where they can extract more growth.”

Ray says that trying out alcohol is a way for those companies to dip their toe into a multibillion-dollar category in which they don’t yet have exposure.

“Five years ago it would have been off the table for Coca-Cola to do anything close to alcohol, but they’re starved for growth and they’re looking for unique ways to dip into their multibillion-dollar categories,” Ray says. “Brand partnerships are quite frankly the only way they can do that because of regulatory hurdles.”

As for whether or not they’ll stick around, both Isacson and Ray are skeptical.

“I think the nature of the category is there’s not a ton of longevity to most of these. People like variety,” Isacson says, adding that though we might not see these specific products on store shelves forever, there is already a blurring of the lines between traditional alcoholic and nonalcoholic brands. For example, some traditional alcohol brands such as Diageo have started to dabble in the nonalcoholic space and vice versa.

“It definitely seems to be that everyone is now going after that bigger strategy—that total beverage strategy,” Isacson says, “and it will be very interesting to see how that plays out.”