Coca-Cola Australia has entered the Australian alcohol market with the launch of Topo Chico Hard Seltzer. The move is part of Coca-Cola’s bid to diversify its portfolio.
The Topo Chico Hard Seltzer is a mix of sparkling water, alcohol and natural flavouring to produce the range: Tangy Lemon Lime, Pineapple Twist, and Strawberry Guava.
Coca-Cola South Pacific vice president Robert Priest said Topo Chico is targeted at consumers looking for something new this summer.
“Our strength is in making great tasting drinks and we have a strong track record in sparkling waters, so there’s not a lot we have to change in terms of manufacturing. It made sense looking at what we had in the portfolio with such strong brand recognition for Topo Chico in Latin and North America, to add alcohol and tap into a growing trend,” Priest told Food & Drink Business.
The hard seltzer market has been a highlight in the beverage sector over the last 12-18 months.
Endeavour Group RTD category manager Lance Friedman said Coca-Cola’s entry into the market reflected changing consumer drinking habits.
“We have seen consistent growth in the seltzer category in the last year, including during the cooler months.
“We have seen consistent growth in the seltzer category in the last year, including during the cooler months.
“In the last few years, we have seen Australians become more mindful of what they are consuming, moving towards drinks that are lower in alcohol or zero alcohol, as well as preservative-free, lower in calories, vegan friendly or organic drinks. Seltzers have strong appeal for that market,” Friedman told Food & Drink Business.
IBISWorld said revenue for RTD Mixed Spirit Production is expected to grow at an annualised 1.4 per cent to 2026 to around $1.2 billion, largely driven by innovation and changing trends including the arrival of hard seltzers and ready-to-serve cocktails.
The alcoholic Topo Chico stems from a Mexican mineral water of the same name. The Coca-Cola Company acquired the brand in 2017 and launched the alcoholic version initially in Mexico and Brazil in September 2020, and North America earlier this year.
Coca-Cola Company CEO and chair James Quincy said the hard seltzer drew on the mineral water’s “cult-like following and growing popularity as a craft cocktail mixer”.
“The Topo Chico brand has tremendous relevance and resonance with Millennial consumers. So I think this is going to be a great opportunity for us… it’s very synergistic for the Coke system globally.
“We’re going to experiment with a number of cities around the world… just one of the many things we’re doing to really focus our portfolio to be very consumer centric and drive those brands that can create scale for us.”
In 2019, the company launched Lemon-dou (Demon Lemon) in Japan. “It is quite a sour yuzu flavoured hard seltzer that has been very successful in the Japanese market. It’s another example of us launching in one market and then looking to expand the brand into other countries,” Priest said. Coca-Cola is looking to launch it in the US and maybe Australia down the track.
Priest said: “We have share ambition and that is to be at the top end. We want to have relevance in the market and that means we need scale.
“The category has room for growth and expansion. This is a positive start for us to enter alcohol and then build.”
Davidson Branding managing director Grant Davidson told Food & Drink Business millennials are over-indexed when it comes to the consumption of alcoholic seltzers. “They’re looking for lighter, fresher and healthier options and they are now the largest buying market overall,” he said.
B2B beverage marketplace Kaddy cofounder Rich Coombes said the no and low alcohol trend is not purely a reflection of a lifestyle choice or changed attitude – “these are also genuinely great, tasty products in their own right that anyone can enjoy,” he said.
“In both non-alcohol and seltzer, it is exciting to witness the growth of these entirely new categories as we tend to see that a rising tide lifts all boats. In the last three months of 2020, leading up to the Christmas and holiday period, the volume of craft non-alcoholic products sold through our channel grew tenfold.
“Without pre-existing brand loyalties, customers are more open to trying new brands within the space, leading to growth and success for a wide variety of great suppliers and products.
“Seltzers and non-alc are diversifying categories – they aren’t token products where you can stock a single SKU and hope it satisfies,” Coombes said.
Priest said, “At Coca-Cola, we’re developing a beverage portfolio that keeps up with the experiences our consumers want. With the warmer months fast approaching, Topo Chico Hard Seltzer’s flavours of fiesta are for Australians looking to kick back and enjoy themselves for a summer characterised by balmy afternoons, friends, family, barbecues, and most of all, fun!”
Davidson said COVID-19 has made consumers’ desire for escapism even stronger. “When you look at its branding, it evokes associations we have with Mexico and Latin America – beaches, sunsets, a relaxed time, partying and having fun. We want escape and this is one form of that,” he said.
“Australian customers have truly discovered and fallen in love with seltzers. We actually think that this upcoming summer will be the real summer of seltzers,” Friedman said. Endeavour Group already stocks a large range in the category but Friedman indicated that is only set to increase in the coming weeks.
Topo Chico Hard Seltzer will be available from September in 355ml cans, each containing 4.7 percent alcohol by volume (ABV), under 104 calories per can and gluten free with no artificial sweeteners. The seltzer will be available in packs of four from select Dan Murphy’s, BWS and independent liquor stores.
