Molson Coors Beverage Co. will manufacture, market and distribute Coca Cola Co.’s new hard seltzer version of Topo Chico mineral water in the U.S. as both companies look to expand into new categories.

The product will arrive in the U.S. nationally in the first half of 2021, according to a statement. Coca-Cola in July first announced the plans to launch the alcoholic version of Topo Chico, its Mexican seltzer brand that’s gained a cult following.

Molson Coors is looking to broaden its reach, following up on plans it announced last year when it dropped “Brewing Co.” from its name. The shift has come as consumers’ drinking habits move away from beer and toward products such as hard seltzer.

“If you look at growth in hard seltzer, there are a few key drivers,” said Michelle St. Jacques, chief marketing officer at Molson Coors, in a phone interview. She cited growing interest in health and wellness, as well as demand for new drink flavors.

Molson Coors will prioritize markets where Topo Chico has gained popularity.

Coca-Cola shares were little changed in New York on Tuesday. Molson Coors rose 1 per cent at 1:58 p.m. in New York, paring earlier gains.

Molson Coors’ other recent forays outside beer include a deal with Hexo Corp. for cannabis-infused beverages. Topo Chico will be the third hard seltzer brand for the company, along with Vizzy and Coors Seltzer.

Coca-Cola is also diversifying its product lineup as Covid-19 lockdowns close down sporting events and amusement parks, taking a bite from the company’s business.

--With assistance from Brett Pulley.