The Coca-Cola Company [NYSE: KO] is the largest soft drink company in the world. Its global reach is so expansive that over one billion Coke products are served every day. Coca-Cola has a vast portfolio of 500 brands, both sparkling and still, and nearly 3,900 distinct beverage choices. 

Coke and it’s cousins are popular mixers for everything from rum and whiskey to red wine (it’s called a Kalimotxo and is an iconic cocktail in Spain). But the Atlanta-based company’s drinks have almost always been soft, not hard. Is it time for that to change?

The beverage giant has dabbled in the alcohol market before. In the late 1970s they acquired several vineyards and sold wine under the label Wine Spectrum. While the venture was relatively successful – they even had an agreement with United Airlines where they sold Wine Spectrum cans on flights – the margin proved to be too small for Coke’s liking, and they sold the brand to Seagrams and Sons in the early 1980s. 

The alcoholic beverage industry has changed drastically in the last two years thanks to the rise of hard seltzer, which is now the fastest growing category in alcohol. Beverage companies both hard and soft are scrambling to introduce their own seltzers, spritzers, and ready-to-drink (RTD) cocktails. This bubbly new market is much more familiar terrain for Coca-Cola than wine.

In fact, Coke has already begun dipping its toes into hard water in certain markets. In 2018 they introduced their first alcoholic beverage in nearly 35 years; a sparkling hard beverage called Lemon-do. Available only in Japan, Lemon-do is available in three varieties ranging from three percent to seven percent alcohol. 

Although it’s been popular among consumers, Lemon-do is likely to stay a Japanese exclusive. Jorge Garduño, Coca-Cola Japan business unit president, says the seltzer was designed for that specific market. “I think the culture here is still very unique and special, so many products that are born here will stay here,” says Garduño.

Fans outside of Japan needn’t fret though, as Coca-Cola’s expansion into hard seltzer continues with Topo Chico, the Mexican mineral water brand they acquired in 2017. Topo Chico Hard Seltzer will be released in select Latin American markets later this year, with US markets to follow in 2021. Similar to Japan’s Lemon-do, its inaugural flavor will be Tangy Lemon. 

But the question remains: will Coca-Cola ever expand into beer? At the end of the day, beer is a malt beverage – as are most hard seltzers, including industry leader White Claw. Reading the can of a Smirnoff Seltzer Red, White, & Berry – a spiked beverage that tastes less like beer than Coca-Cola itself – it is clearly labeled “premium malt beverage” and “flavored beer.”

The hard seltzer category is expanding and reaching new definitions, with many distillers using their own premium spirits to spike their seltzer water.  The vast majority of hard seltzers, however, are flavored malt beverages (FMB). In other words, they’re just light and fruity beers, minus the hops. 

So in a way, Coke is starting to move into the beer space via hard seltzer – the trendiest, lightest beers.

Erin Grafton
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