Coca-Cola Co (NYSE:KO) entered a pact with Molson Coors Beverage Co (NYSE:TAP) to unveil Topo Chico Hard Seltzer in four flavors: Strawberry Guava, Exotic Pineapple, Tangy Lemon Lime, and Tropical Mango in the US. Topo Chico joins the hard seltzer portfolio in the US. The demand for hard seltzer and sparkling water is robust, and hard seltzer expects to report annual growth of 66% to $2.5 billion in 2021.
Molson Coors handles marketing and distribution
As per the terms of the pact, Molson Coors will handle the marketing, distribution, and sales of this innovative alcoholic beverage in the US in areas where the brand is well known. Coca-Cola engages a third party for the manufacture and packaging of Topo Chico Hard Seltzer. Coco expands the Sparkling Mineral water, the favorite drink for Texans, since its takeover in 2017.
Coca-Cola forays into alcoholic beverages
Coca-Cola makes an entry into the alcoholic beverages with the launch of Topo Chico in the US after divesting its Wine Spectrum business in 1983. It is changing the tradition of selling popular drinks and looks to satisfy consumers’ taste buds, who always look to try new things. Topo Chico Hard Seltzer already achieved success in Brazil and Mexico. It is a refreshing cocktail and fresh lime mineral water for everyone to consume in the summer. In the first instance, the low sugar and low-calorie alcoholic beverage will be introduced in Latin America’s select cities. US consumers can taste the new drink in the first half of 2021.
It offers a great opportunity for Coca-Cola to improve its revenues. The Miller Lite brewer already included two hard seltzer brands such as Coors Seltzer in its portfolio. Molson Coors dropped the word ‘Brewing’ in early 2020 from its name and moving beyond the beer because of reduced consumption. The popularity of Hard Seltzer increased in the recent period. Its volume almost tripled in the year 2019 and reversed the declining consumption trend across the world.
In an earnings call in Q2, 2020, CEO of Coca-Cola, James Quincey, said the company will make changes in its portfolio and include only those sure winners and contribute revenues.
