What Coca-Cola’s First Alcoholic Product Means for the Rest of the Industry

May 18, 2018 in Alcohol Beverage, CPG

The beer, wine, and spirits industries have dealt with a fair share of disruption in recent years. The emergence of craft beer, demand for premium spirits, and interest in locally produced liquor have all had a profound effect on this space. The biggest shakeup may still be yet to come, however.

One of the most recognizable consumer brands in the world is poised to take its first foray into the liquor industry: Coca-Cola recently announced that it plans to release an alcoholic beverage.

Coca-Cola follows consumer trends

Why the sudden interest in developing an alcoholic product for the first time in the company’s 125-year history? As the BBC explained, Coca-Cola’s move has been largely driven by increasing demand for “alcopop” beverages in certain Asian markets. In particular, the new drink will follow the style of Chu-Hi beverages, which combine flavored sparkling water with a popular Japanese liquor called shochu.

Although many details regarding the proposed drink are still unknown, it will likely feature a relatively low alcohol volume – 3 percent to 8 percent – to follow other popular Chu-Hi products. Coca-Cola officials view their Chu-Hi-styled drink as more of an experiment than a full-blown new product release and will limit its launch to the Japanese market for the time being.

Coca-Cola’s first alcoholic product may be a Japan-exclusive, but it has ramifications for other marketplaces within the liquor industry.

Providing an alternative to beer

Chu-Hi drinks have grown in popularity in Japan and other Asian markets in large part because they serve as a viable alternative to other beverages that feature low alcohol volumes – in particular, beer. Chu-Hi offers a much different flavor profile with a similar alcohol content and has been in especially high demand among female consumers.

Chu-Hi may not be on the radar of liquor industries in the United States, but similar trends are occurring, including the rise of hard cider in recent years. Although cider represents only a sliver of the overall beverage alcohol industry, its market share has grown considerably over the past decade.

Beverage alcohol brands can capitalize on this rising interest in flavorful alternatives to beer by launching products of their own, whether they are cider-based or alcopop drinks.

Putting cocktails in a can

Chu-Hi is another in a long line of beverages that attempt to recreate classic cocktails in a convenient package (Chu-Hi actually stands for “shochu highball”). The canned cocktail segment includes variations of a number of drinks that would otherwise require a long list of ingredients and some serious mixology chops to put together. There are options for sangrias, radlers, and even gin and tonics.

Liquor companies should look to create canned concoctions of their own, while aiming to marry convenience with quality. As demand for premium beverages continues to grow, the release of a low-quality yet economic product may come with a struggle to find an audience.

Whatever products beverage alcohol brands ultimately create to respond to evolving consumer tastes, it’s vital that they optimize in-store merchandising practices, execution, and experiences to appeal to shoppers. Mobile execution management solutions help frontline employees monitor displays and effectively implement planograms from store to store. In addition, the right software empowers in-store employees to collect useful data—on a larger scale—that can be turned into action.

GoSpotCheck

Written by GoSpotCheck

GoSpotCheck is execution management software for field teams, designed to drive visibility and performance. GoSpotCheck helps brands streamline surveys, audits, and reports through mobile data collection and a clean, accessible reporting dashboard.