Soda giant Coca-Cola is entering the alcoholic market for the first time in the company’s 132-year-history. Their new alcoholic drink is set to launch in Japan as a version of chu-hi, which is a carbonated canned beverage that contains an alcohol content between three to nine percent.
Chu-Hi is traditionally composed of a distilled alcohol called shōchū – which is usually distilled from rice, barley, sweet potatoes, buckwheat or brown sugar – combined with sparkling water and some flavorings. This new beverage will bring Coca-Cola into the popular “alcopop” category where well-known flavored low-alcohol beverages like Smirnoff Ice and Bacardi Breezer are currently dominating.
With the Japanese food industry being very competitive, Coca-Cola hopes that this new product will appeal to the Japanese consumers who are surrounded by hundreds of beverage options.
“The Japan business unit launches an average of 100 new products a year, and many times more are put to the test behind the scenes. Experimentation is almost like a day-to-day ritual here. You can’t fall behind the rapid product cycle in Japan, so we’re always seeking innovation opportunities to deliver fun surprises for consumers,” said Jorge Gardũno, President of Coca-Cola’s Japan Business Unit.
However, because Japan’s beverage market is significantly different from the American beverage market, it is uncertain how an alcopop Coca-Cola beverage would do in the US. Coke has been working on product innovations like a zero-calorie stevia-based coke beverage and flavored diet coke varieties for the North American market but there has been no word of an upcoming alcoholic beverage launch.
If the new chu-hi beverage finds success in Japan, there is a possibility for the drink to appear in different markets. However, the consumer market in Japan is very different than the current millennial-driven food space in America. Japan’s primary consumers are composed of elderly people who are interested in traditional (such as chu-hi drinks) and functional beverages . This means that products that find success in Japan are not likely to appeal as much to American consumers.
“This is unique in our history. Coca-Cola has always focused entirely on non-alcoholic beverages, and this is a modest experiment for a specific slice of our market. The Chu-Hi category is found almost exclusively in Japan. Globally, it’s not uncommon for non-alcoholic beverages to be sold in the same system as alcoholic beverages. It makes sense to give this a try in our market. But I don’t think people around the world should expect to see this kind of thing from Coca-Cola. While many markets are becoming more like Japan, I think the culture here is still very unique and special, so many products that are born here will stay here,” concluded Gardũno.