Global Thread

Coca-Cola to inception its first alcoholic drink

(Bloomberg) — Coca-Cola Co., which has sold its famous soft drink for more than 130 years, is giving customers in Japan something harder.

The company is launching a canned version of Chu-Hi, a carbonated drink made with shochu, a spirit distilled from barley, sweet potatoes or other ingredients. Chu-Hi, an abbreviation of “shochu highball,” is considered a low-alcohol beverage, but proofs can range as high as 18 (9 percent alcohol by volume).

The move is a first for Coke globally, which has stuck to cola and other non-alcoholic drinks except for its brief ownership of a wine subsidiary that ended in 1983. The launching of Chu-Hi comes as the overall category of “ready-to-drink” canned mixed alcoholic drinks is growing in Japan amid a decline in beer sales.

“We haven’t experimented in the low-alcohol category before, but it’s an example of how we continue to explore opportunities outside our core areas,” Jorge Garduño, president of Coke’s Japanese business, said in a blog post.

Coke’s Japanese Liquor Push Gets Lost in Translation: Gadfly

Exploration of the low-alcohol category also comes as Chief Executive Officer James Quincey has emphasized the need for the beverage giant to appeal to consumers at different times of the day. People drink an average of eight, 8-ounce drinks a day, and Quincey wants Coca-Cola to be the source of more of those servings.

Coke announced earlier this year that it is catering to alcoholic-beverage consumers by spiffing up its mixers.

The Japanese market has long been a place where Coca-Cola has been the most innovative. That unit launches an average of 100 new products a year, according to Coke. The Chu-Hi drink will be available only in Japan — for now.

Japanese beer giants Asahi Group Holdings Ltd. and Kirin Holdings Co. have put an emphasis on increasing offerings in their ready-to-drink category. Kirin saw sales volume of RTD beverages grow 8.4 percent last year. While the segment is still small compared with Japan’s brewery business, that market is shrinking. The volume of beer shipped domestically has fallen for two straight years, according to the Brewers Association of Japan.

To contact the reporters on this story: Jennifer Kaplan in Los Angeles at jkaplan84@bloomberg.net, Lisa Du in Tokyo at ldu31@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Jeff Sutherland, Dave McCombs

©2018 Bloomberg L.P.

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