Soft-drink giant Coca-Cola announced that it will join the increasingly crowded hard-seltzer market this year with the introduction of an alcoholic version of Topo Chico, the popular sparkling mineral water that can trace its roots to late 19th-century Mexico.
The company said it would introduce Topo Chico Hard Seltzer to “select cities in Latin America later this year,” before rolling out the product in the United States in 2021. Unlike numerous brands in the hard-seltzer market, the Topo Chico offering won’t be a variation on an existing beer or created by a company with a long history in alcoholic beverages.
Yet from the moment Coca-Cola purchased Topo Chico in 2017, the company seemed to understand the potential for the brand. Popular in Mexico and Texas as a refreshment, cocktail mixer and occasional hangover cure, Topo Chico benefited from Coke’s distribution network and marketing dollars. According to a Bloomberg Businessweek report in 2019, Top Chico’s sales in the United States jumped 39 percent to nearly $130 million over one 12-month period after Coke bought the brand.
In its second-quarter earnings call in June, chairman and chief executive James Quincey said Coca-Cola would stop throwing resources at low-performing brands, such as its Odwalla smoothies and juices (which will shut down at the end of July) and focus more on promising brands.
“This gives us the flexibility to support our investments in brands like Minute Maid and Simply and to continue to scale rising stars like Topo Chico,” Quincey said, according to a transcript of the call.
The soft-drink company clearly hopes Topo Chico will fare just as well in a hard-seltzer market that, according to Nielsen Company data, has grown from 10 brands in 2018 to more than 65 today. This year, Anheuser-Busch InBev SA debuted Bud Light Seltzer in the United States, while Constellation Brands launched Corona Seltzer in the spring. They’re all chasing acknowledged market leader, White Claw, from Mark Anthony Brands, the company behind Mike’s Hard Lemonade.
The hard-seltzer market has been red hot, and the low-alcohol products are selling well despite many bars being shut down because of the coronavirus pandemic. According to Nielsen, the week ending June 13 “represented the fourth consecutive week during which hard seltzer drove more than $100 million in retail off-premise dollar sales.”
The trick for Coca-Cola, it seems, will be to take advantage of Topo Chico’s popularity without alienating the product’s cult following or undermining its mystique. Topo Chico’s naturally carbonated mineral water is sourced from a limestone spring hidden under a mountain on the outskirts of Monterrey. The product, in fact, derives its name from the mountain, Cerro del Topo Chico. According to company lore, these waters healed an Aztec princess ailing from a terrible disease.
Coke’s announcement to push Topo Chico into the trendy hard-seltzer market — popular with millennials and those looking for alternatives to high-alcohol beers — quickly generated both criticism and raves on social media.
Chris Svetlik, the proprietor behind Republic Cantina in Truxton Circle, was exchanging a lot of texts today after Coke’s announcement. A former Texan who serves Topo Chico at his cantina, Svetlik said he will be eager to try the hard-seltzer version of the product. He’s also eager to see how he could incorporate it into his bar menu.
“At a macro level,” Svetlik texted, “I think it’s super interesting: Trading on the Topo brand to give it more legitimacy and not just be a White Claw clone.”
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