Beverage company Coca-Cola will enter the hard seltzer market in the U.S. The company said this week it should release its first-ever hard seltzer product in the first half of 2021.
The release of the new product will be a significant shift for the company - particularly after it had exited the alcoholic beverage market in the early 1980s when it sold its wine business. However, Coca-Cola has been selling alcoholic Lemon-Do in Japan since 2018.
The company's chief executive officer James Quincey said in an interview that the release of the product was merely Coca-Cola following consumer demand. He said as consumer tastes evolve it was the company's job to meet demand.
"I think these innovations that we've seen, including hard seltzer, are a trend of the consumer looking for new things and if we want to be consumer-centric...then that's what's taking us to this opportunity," Quincey said in a CNBC Mad Money interview.
Coca-Cola will release its first hard seltzer product under its Topo Chico brand - which it acquired in 2017. It will be launched first in Mexico and then in the U.S.
Hard seltzers, a drink containing carbonated water, alcohol and light fruit flavorings, have become a big hit in the U.S. According to research company Bump Williams Consulting Co, the hard seltzer market generated sales of more than $3 billion as of July this year.
The leading product in the segment is Hard Lemonade's White Claw and Boston Beer's Truly. More companies have joined the market. Earlier in the year, Corona announced it would be releasing a new hard seltzer product.
Boston Beer's chief executive officer Dave Burwick said the shift to hard seltzer was one of the biggest category shifts he has ever seen since the worldwide trend to light beers. Unlike traditional alcoholic drinks, hard seltzers have around 5% alcohol only by volume and a low calorie content.
