By Jennifer Maloney 

Coca-Cola Co. said it plans to launch a boozy version of its Topo Chico sparkling water in the U.S. next year, plunging the soda giant into the market for alcoholic beverages.

With the move, the company joins the fray of beverage giants vying for market share as consumers flock to hard seltzer for its minimal calories and lower alcohol level. Americans spent $3 billion on hard seltzer in U.S. retail stores in the 52 weeks ended July 11, up 241% from a year earlier, according to Bump Williams Consulting Co.

The market is dominated by White Claw, owned by Mike's Hard Lemonade Co. Boston Beer Co. makes Truly, the No. 2 brand. Anheuser Busch InBev NV and other big brewers have also introduced hard seltzer brands, including Bud Light Seltzer and Corona Hard Seltzer.

It has been decades since Coke sold booze in the U.S. The company previously owned a wine business that it sold in 1983. In 2018, Coke introduced a fizzy, lemon-flavored alcoholic drink in Japan called Lemon-Do.

Coke "is committed to exploring new products in dynamic beverage categories, including hard seltzer," the company said in a statement posted on its website. "Topo Chico Hard Seltzer is an experimental drink inspired by Topo Chico sparkling mineral water, which has been popular with many mixologists."

Coke will pilot the alcoholic Topo Chico drink in Latin America later this year, the company said. News of the new product was reported earlier by Beverage Digest, an industry publication.

Alcohol distribution is tightly regulated in the U.S. A Coke spokeswoman said the company hasn't finalized how it will distribute hard seltzer, which falls under the same regulatory category as beer. Some Coke distributors already hold licenses to carry beer.

Under James Quincey, who became chief executive in 2017, Coke has expanded beyond its core soft-drink franchises. It has launched coffee-infused sodas and an energy-drink version of its namesake cola, despite objections from its partner Monster Beverage Corp. It is also pruning some niche products, such as its Odwalla smoothies and juices.

During the pandemic, the company's biggest soda brands -- including Coke, Coke Zero Sugar and Sprite -- have sold well in grocery stores but have taken a hit from a steep drop-off in soda fountain sales.

Write to Jennifer Maloney at jennifer.maloney@wsj.com

 

(END) Dow Jones Newswires

July 30, 2020 13:27 ET (17:27 GMT)

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