US – Coca-Cola’s CEO James Quincey, during the recent Barclays Global Consumer Staples conference, said it’s not inconceivable that alcoholic beverages could one day become a material business for a company best known for its sodas.
Quincey noted alcoholic beverages are in the “experimentation bucket” as the beverage giant gauges whether the category “can demonstrate traction, momentum” for the company to make a meaningful investment.
Manuel Arroyo, Coca-Cola’s global chief merchandising officer, said in June: “When you look into consumer trends, this is a very interesting space for us as consumers are moving into that space. We see a lot of potential. We are still learning.”
Coca-Cola has moved aggressively to partner with alcohol giants already in the space as it aims to control another occasion when a consumer might drink one of its products.
Since 2020, when the multinational beverage company renowned for its non-alcoholic drinks teamed up with Molson Coors to create Topo Chico Hard Seltzer, the companies have partnered on launching a line of ready-to-drink spiked lemonades based on Coca-Cola’s refrigerated juice brand Simply.
Coca-Cola also has reached deals with Corona brewer Constellation Brands to launch RTD cocktails through its Fresca brand, and with Brown-Forman to debut Jack Daniel’s RTD cocktails with its signature cola.
The beverage giant has also invested in alcoholic offerings in other countries like Japan, Brazil, and the Philippines.
Quincey noted in his remarks to Wall Street, that alcohol is by no means a sure thing for his firm, but given the recent deals Coca-Cola has entered into, it’s one the Atlanta company is seriously interested in.
This shows that in launching these products, Coca-Cola’s biggest gamble comes from the use of one of its large brands, with its alcohol partner handling the production and marketing.
Coca-Cola said as consumers look for alternative ways to imbibe, RTD cocktails are among the fastest-growing in the alcohol category.
The global RTD cocktails market size was valued at US$782.8 million in 2021 and is projected to expand at a compound annual growth rate of 13.4% from 2022 to 2030, according to Grand View Research.
Other nonalcoholic beverage companies which have introduced or announced plans to enter this growing major beverage market include Boston Beer, which has partnered with PepsiCo to launch a Hard Mtn Dew alcoholic drink in the US, while energy drink maker Monster Beverage announced plans to launch its first flavored malt beverage alcohol product later this year.
Alcohol creates another way for nonalcoholic beverage makers to get their products into the hands of additional consumers, who want to go way beyond and may not always want tea, water, or cola.
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