Coca-Cola Experiments with First Alcohol Product

Canned chu-hai drinks in Japan are sold in convenience stores and vending machines.
March 08, 2018

TOKYO— Coca-Cola Co.’s Japan unit is planning to introduce a fizzy alcohol drink in what is being described as the first alcoholic product in the company’s history, reports the Wall Street Journal.

Jorge Garduño, president of Coca-Cola’s Japan unit, explained in an article that the company is experimenting with a product known in Japan as Chu-Hi. “This is a canned drink that includes alcohol; traditionally, it is made with a distilled beverage called shochu and sparkling water, plus some flavoring. 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,” he said.

Garduño continued that this type of product containing alcohol is unique in the company’s 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.”

The Wall Street Journal notes that Japan has a highly competitive beverage market, where companies can introduce as many as 100 new drinks a year. Canned chu-hai drinks sold in convenience stores, vending machines and eateries.

Coca-Cola Japan will be entering a crowded market dominated by local brands from companies such as the beverage units of Suntory Holdings Ltd. and Kirin Holdings Co., notes the Journal. Per Suntory, the total market in Japan for canned ready-to-drink alcoholic beverages has grown for 10 consecutive years, with 9% growth in 2017 to the equivalent of 183 million 24-can cases.