Mexico/USA: Coca Cola enters hard seltzer market

The Coca-Cola Company is to enter the hard seltzer market and debuts through this means with an alcoholic beverage. The company said it “is committed to exploring new products in dynamic beverage categories, including hard seltzer.”

Coca Cola has selected its Topo Chico brand for the launch, which it acquired in 2017 for USD 200 million and which so far stands for sparkling water from Mexico. Topo Chico has been sourced and bottled in Monterrey, Mexico, since 1895 and takes its name from the mountain Cerro del Topo Chico, near Monterrey. Coca Cola has helped to make the water popular in the United States and especially in Texas as an ingredient for the popular Ranch Water, a cocktail made with tequila, lime juice and Topo Chico.

Topo Chico Hard Seltzeris an experimental drink inspired by Topo Chicosparkling mineral water, which has been popular with many mixologists,” Coca Cola said in a short notice and added that the product “will be offered inselectcities in Latin America later this year.”

The company said it “will share more details closer to launch.”

The product, which is according to Coca Cola CEO James Quincy the “rising star” in Coke’s portfolio will launch in the United States in 2021 and marks the company’s first foray into alcoholic beverages in its home market since it sold its wine business to Seagram & Sons in 1983, six years after it entered the category.

However, Topo Chico Hard Seltzer will not be the first alcohol infused beverage for Coca Cola. The company already launched two years ago its first alcoholic drink, a lemon flavoured alcopop, in Japan. Chu-Hi is supposed to be an alternative to beer in Japan and breweries like Suntory, Asahi and Kirin have already positioned their respective products in the local market.

The hard seltzer market is a fast growing category especially in the United States and has attracted the attention of many beverage companies and foremost breweries. The market is still dominated by White Claw Hard Seltzer, a brand from The Mark Anthony Group, which pioneered the flavored malt beverage category with the launch of Mike's Hard Lemonade in 1999. The group aims to capture a 10% share of beer dollar sales in the U.S. “as fast as possible.” (inside.beer, 14.1.2020)

The second biggest brand is Truly Hard Seltzer, a brand from the Boston Beer Company, which recently announced to quadruple production capacity of its Cincinnati plant in order to meet the increasing demand for mainly its hard seltzer portfolio (inside.beer, 27.2.2020).

In recent months nearly all major brewing groups have announced to launch or already launched their own respective hard seltzer brands including AB InBev, with Bon & Viv and its Bud Light Seltzer family of products (inside.beer, 16.11.2019), Molson Coors with Henry's Hard Sparkling Water and Vizzy Hard Seltzer and Constellation Brands which launched Corona Hard Seltzer in spring and is already the 4th most selling hard seltzer brand in the US.

Even Carlsberg, a brewing group which does not have a significant business in the United States is currently exploring the potential of this product category in its markets in Europe and Asia (inside.beer, 14.2.2020,) [update 18.08.2020: Carlsberg is test marketing two products in Norway and Singapore, inside.beer, 18.8.2020].

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