Why Constellation buying a hop water brand is a shrewd move
Why does this matter?
Major CPG acquisition signals non-alcoholic beverage innovation becoming mainstream, showing BevTech founders how big players are investing in functional beverages and alcohol-alternative categories with strong growth (22% in 2025).
Highlights
US drinks giant Constellation Brands invested in the hop water category five years ago, backing Hopwtr, one of the biggest brands on the market. Now, as it acquires the brand in its entirety. Jessica Mason looks at what this next play says about the direction the sector is moving in. If you were not aware of hop water, now would be a good time to learn a little ore about it. Even though the Hopwtr brand has been part of Constellation’s Venture portfolio since 2021, its latest decision to buy it outright is an interesting one. Why? Because for a company known for its beer offer, picking up a non-alcoholic beverage that gives a nod to the thriving alcohol adjacent drinks category, with hop, adaptogen, and nootropic drinks trends showing that the way we drink is changing. The rising presence of alcoholic alternatives, adult soft options and also having an awareness of younger consumers adapting the way they drink, with zebra striping becoming more commonplace, has all helped to create a clearer picture of the future of drinks. Broadening the landscape The brand was founded in 2020 by Jordan Bass and Nick Taranto, who set out to build a calorie-free beer-alternative that still offered a functional benefit beyond what many sparkling waters and non-alcoholic beers delivered. But why offer a hop water, rather than a non-alcoholic beer? Perhaps it is because the demographic is broader for mindful drinkers rather than only tapping into moderating beer drinkers as a potential consumer. In 2024, db looked into the validity and potential of the category in a deep dive here, showing how it was a trend that was highly complementary to breweries rather than cannibalistic and gave the sector another means of offering a product without the headache of adapting equipment or ingredients from suppliers each already knew. Plus, Constellation recently delivered an unexpectedly strong third quarter, offering rare optimism in a challenging market. Indeed, its better-than-forecast profits helped lift shares despite ongoing pressure on sales and it is showing signs of being a company that has a game-plan and has put a lot of thought into how it adapts to what the sector is showing it needs: variety. The halo effect Notably, the transaction for Hopwtr is subject to the satisfaction of certain closing conditions and is expected to close in early April 2026. But let’s look at why the brand has become so attractive. Granted, the non-alcoholic segment is one of the fastest-growing categories in beer, with dollar sales increasing by 22% in 2025, according to Cicana data. But, also, there could be a way that each brand would have a halo effect on the beer sector, giving people more awareness of hop varieties and flavours in a similar way they can already identify grape varieties they enjoy or culinary spices they like as a means of navigating preferences and signal discernment at each point of purchase. The deal also aligns with Constellation’s commitment to meeting evolving consumer preferences, but there is a sense that this is the start of something, rather than a simple case of bandwagon jumping. Having a big company behind a trend or category gives it forward-momentum. This could raise the profile of hop water in general. This is something that the industry will be eyeing as the deal progresses. 'Commitment' Speaking about the acquisition, the team at Hopwtr, have already flagged how this deal is a show of big business offering “commitment”. Bass explained: “My team and I look forward to taking this next step with Constellation and benefiting further from the company’s deep industry expertise and commitment to driving premium, consumer-driven brands.” 'Strategic' Constellation’s beer division and executive vice president Jim Sabia said: “Since our initial venture investment in Hopwtr in 2021, we’ve worked closely with the team to help shape the brand’s long-term strategic direction. With the non-alcoholic segment becoming one of the fastest growing areas of total beverage alcohol, Hopwtr is a natural addition to our no- and low-alcohol portfolio.” Bass added: “I’m confident this will help us keep the momentum going and am excited to work together on the next phase of growth.” Hopwtr is currently sold throughout the US through major retailers, grocers and specialty stores, but the new deal may see the brand gain a long-awaited boost.
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