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Coca-Cola Jumps Into the Popular Hard Seltzer Category

By Howard Smith - Jul 30, 2020 at 5:12PM

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The beverage company will launch an alcoholic version of its Topo Chico sparkling mineral water in Latin America later this year.

Beverage giant Coca-Cola (KO 0.57%) has announced plans to launch a hard seltzer product line inspired by its Topo Chico sparkling mineral water brand. The new drink will go on sale this year, starting in select Latin American cities. The company said it is "committed to exploring new products in dynamic beverage categories, including hard seltzer." 

The new drink will debut in the U.S. in 2021, reports CNBC. Citing a market analysis firm, the article noted that hard seltzer sales volume more than tripled in 2019. The category is led by White Claw, owned by Mike's Hard Lemonade brewer Mark Anthony Brands, and Truly, which is owned by Sam Adams brewer Boston Beer Company (SAM 0.23%).

Two coca-cola's Topo Chico hard seltzer cans in promo

Image source: The Coca-Cola Company.

In the second-quarter earnings report it delivered last week, Boston Beer said its 42% revenue growth in the period was largely attributable to the success of the Truly brand. It described the sales growth of Truly Hard Lemonade as "beyond our expectations." 

Coke hasn't sold alcoholic beverages in the U.S. since it divested itself of a wine business in 1983, according to The Wall Street Journal. The beverage giant bought the Topo Chico premium sparkling mineral water brand in 2017. Topo Chico has been sourced and bottled in Monterrey, Mexico, since 1895. The two companies also share some history: In the 1920s, a Topo Chico plant was the first site in Mexico to bottle Coca-Cola.

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer. The Motley Fool has a disclosure policy.

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