Molson Coors has made an undisclosed investment in functional beverage maker LA Libations to expand its non-alcoholic business.

Molson Coors emerging growth division president Pete Marino said: “At a time when much of the growth in the beverage industry is coming from brands and categories that often were non-existent five years ago, (LA Libations’) expertise in creating and nurturing brands is especially valuable.

“This essentially adds on to our M&A pipeline and allows us to pursue opportunities in this space without needing an extensive non-alcohol infrastructure.”

Based in El Segundo, California, LA Libations has been creating non-alcoholic functional beverages such as Zico Coconut Water, Core Water and Body Armor that primarily target health-conscious consumers.

The company claims that all its beverages have been produced using pure ingredients, containing almost zero sugar or artificial constituents.

Under the deal, Molson Coors intends to focus on a portfolio beyond beer segment and make more prominent investments in innovation.

Two members of Molson Coors will also join LA Libations’ five-member board, holding a stake in products launched by the non-alcoholic beverage producer. It will also be part of brand creation, brand building and consulting services.

The deal also gives Molson Coors rights to purchase brands created by LA Libations in full.

LA Libations co-founder and CEO Danny Stepper said: “For 130 years, the beverage industry was all about taste and refreshment. Today, consumers want it all. They not only want something that tastes good, they want beverages that do something for them.

“We’re always on the lookout for the next great beverage brand that satisfies an untapped need of today’s health-engaged consumer. We develop and pick brands we think we can go out and prove in the marketplace. We’re not always right, but we’re right more than we’re wrong.”

The partnership will only focus on non-alcohol beverages in the US market. Molson Coors intends to retain its innovation team, which will continue pursuing its strategy and projects.