Monster Beverage Corporation (NASDAQ: MNST) continues to examine the hard seltzer market, providing a lifeline during an earnings call yesterday.

Hilton Schlosberg, Vice Chairman and Co-CEO, of the Monster Energy drink company reinforced its hard seltzer pursuit in a conference call with analysts on February 25, 2020.

Schlosberg spoke to the challenges and rewards of hard seltzer. “If you go to the alcoholic side, you’d be then competing with all the other colleagues as the White Claw and Truly and the others that are in that category,” he said.

Markets Await the Plan

“We do believe we will have some news in the not too distant future, but we are looking at the positioning of what we’re looking at opportunities on – particularly on the non-alcoholic side,” said Schlosberg.

The company continues to develop a hard seltzer, being careful to not divulge too much about its go-to-market strategy. “We are developing products, but whether we decide to pull the trigger and when and how is – we’re just looking at where the category is going there before we make a decision on that side,” he said.

Schlosberg was named to the position of co-CEO on January 15, sharing the top job with Rodney Sacks, who has been CEO for over 30 years. Schlosberg has as much tenure as Sacks, having served as president, COO, and continues to serve as Vice Chairman of the Board of Directors.

Rising Aluminum Costs

Schlosberg also predicted that aluminum costs would continue to rise in 2021, in spite of a general consensus that aluminum raw material commodity costs would fall from current levels. “Midwest Premium was in the upper-single digits some months ago and with the imposition of the tariffs on aluminum went up. And everyone expected that to fall. And it hasn’t. It’s just sitting at just below $0.16.”

The United States recently reinstated the Section 232 aluminum tariff of 10% on imports from the United Arab Emirates. These tariffs were imposed by the previous administration but renewed on February 1. Some analysts believe the measure artificially inflates the Midwest Premium.

“Obviously, we monitor aluminum costs every morning. And we’ve seen, as you’ve seen and the rest of the group have seen an increasing situation with regard to aluminum and also with the Midwest premium, which I think has taken a lot of us by surprise,” said Schlosberg.

Monster stock closed down 3.28% yesterday on volume of 2.6 million shares. Premarket trading is at $84.44, down an additional 1%.

Aiden Gentson
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