Coca-Cola, who once conquered the world’s fat house with a bottle of sweet soda, has followed three times this year. Following the launch of AHHA, a sparkling water brand with zero sugar and zero fat at the beginning of the year, clothes were sold online again.
On June 1, Coca-Cola China once again entered the sparkling wine business. It officially announced on Weibo that Topo Chico’s hard soda sparkling wine will be sold in Tmall flagship stores first, and then other e-commerce and new retail channels will be launched successively.
What is the protagonist Topak this time?
The Coca-Cola Company spent $220 million to buy the sparkling water brand in 2017. Counting Topak, the Coca-Cola Company has four sparkling water brands: DASANI Sparkling, Smartwater and the AHHA universe launched last year. Their tastes complement each other, and they are also facing different consumer groups.
This sparkling water drink, which started in the 1890s, can be called the nostalgia of the Mexican people. Before being bought by Coca-Cola, it was only popular in northern Mexico and Texas. If the railroad network all over China sells Texas grilled chicken to the people all over the country, the Coca-Cola Company has brought Texas beverage darling Topaker to the United States and allowed it to develop a sparkling wine business.
Along with beer, fruit wine and pre-mixed wines, soda sparkling wine has also been divided into the low-alcohol market-in this capital-popular consumption field, the United States has run out of White Claw, which has occupied half of the market for three years, and China still has Did not run out of a strong brand.
Coca-Cola started selling drinks, and it entered the top 10 list of Tmall 618 low-level hotel store transactions in only three days from 1-3. Those who moved “Happy Wine” into the shopping cart were young Chinese who pursued health and tasted fresh. “Satisfies consumers’ delicious taste, but also has a little bit of addiction,” Tmall’s beverage industry operator Xiaoer told “E-commerce Online.”
On the surface, the cross-border launch of new products by large international companies is a dimensionality reduction attack on local entrepreneurs. Topak is already quite well-known in the United States, and also has the blessing of Coca-Cola IP-not only the brand halo, but also the actual offline distribution channels.
But you can hardly say that there is no anxiety, at least in China, the challenger Yuanqi Forest has a greater right to speak. In selling alcohol in the country, competitors are a number of emerging domestic alcohol brands, including empty cards that use trendy brand thinking to make alcohol, and those e-cigarette entrepreneurs who are repeatedly jumping in the air. Now, Coke sent a stranger from far away Mexico to break into China’s emerging sparkling wine market. Have a chance?
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Unfamiliar new brand
Before being acquired by Coca-Cola, the North American Internet has long circulated the legend of Topak. The New York Times reported in 2016 How do Texans escape the heat? “With a Bottle of Water from Mexico” introduces the ins and outs of Topak.
Because the water source comes from hot springs in northern Mexico, additional aeration is required during the production process. Some people claim that Topak has more bubbles than other brands of soda and lasts longer. In addition, it contains natural minerals and has the right salty taste. Some people even say that it can relieve alcohol and cure hangovers.
High-end water people are often keen to tell the story of the source, such as S. Pellegrino from the foot of the Italian Alps, Perrier from the south of France, and Evian from the Alps. Although Topak is not as high-end as European water, it still uses glass bottles, and the water source is also a hot spring with a healing aura. Coupled with its limited sales range, only sold in northern Mexico and Texas-this has increased the scarcity and mystery.
Therefore, its early fans, in addition to locals in Mexico and Texas, there are also a group of hippies known for their free spirit. They like the slender glass bottle of Topak, as well as the retro font and color scheme. Coca-Cola hopes to retain the Mexican tradition and mystery of this century-old brand. Kellam Mattie, vice president of the company’s entrepreneurship and emerging brand department, once said, “While expanding the user base, we must pay attention to the core fan base.”
Tmall’s beverage industry operator Xiao Er told “e-commerce online” that in the months before Coke’s new launch, Tmall TMIC and the Coca-Cola team have been co-creating, “including taste adjustments, packaging, and even names. We hope that they will be able to make them available as soon as they go online. Consumers have a taste of early adopters.”
Although in the past few years, Coca-Cola has been very cautious about promoting Topak. Topak is still “popular” with a fairly traditional path-a a local brand that has been sent to the Rockets by the ubiquitous distribution channels of large companies.
In the second year after being bought by Coca-Cola, Topak’s sales through convenience stores increased by 25%. According to a report by Bloomberg Businessweek in 2019, from Whole Foods in New Jersey to a delicatessen in a small town with thousands of people in Hawaii, Topak sparkling water is being sold.
After leaving Mexico and Texas, Coca-Cola set Topak’s goal in China. But here, a stranger still needs celebrity referrals: Topak entered the consumer market under the name of “the sparkling wine brand launched by Coca-Cola.” No matter if it is sparkling water or sparkling wine, it is always a new and unfamiliar brand. Not to mention its main “hard soda sparkling water”.
From the consumer’s point of view, people often don’t know what to drink. Which circuit the drinks belong to is a matter of concern to investment talents. As a result, Coca-Cola started the popularization of “hard soda sparkling wine” in the Tmall flagship store, and also focused on “gluten-free”, “low sugar and 0 fat”, and “alcohol 4.7°”. If the latter two selling points are still popular, the concept and demand for “gluten-free” also quite niche.
The rhythm of Topo Chico’s pronunciation is very Mexican, but the Chinese name “Topa Ke” may not be so catchy-fortunately it is not so bad. The early translation of Coca-Cola’s name “tadpole gnawing wax” is simply a disaster scene for communication studies. At present, Topak’s driving force for consumers to have the courage to try may come from the Coca-Cola Company itself.
Low alcohol again
In 1985, Coca-Cola launched the “New Coca-Cola”. At the time, Guo Sida, who was in power at the time, did many market types of research to ensure that the new Coca-Cola flavor could beat Pepsi in the blind test. At the same time, he had to persuade Robert Woodruff, the boss who created the World of Coca-Cola with one hand. The market value of changing flavors exceeded 2,300. Millions of dollars (as of June 4), it is quite a risky move for a large company pursuing stability.
In the tide of boycotts, Coca-Cola still used the original formula. However, at a time when the sugar-free trend is prevailing, this has increasingly become the shackles of the company.
Coca-Cola’s flagship store on Tmall, scrolling the full-screen banner on the homepage, are all mainly sugar-free or low-sugar beverages: sugar-free mini cola, AHHA microcosm sugar-free sparkling water, and hard soda sparkling wine Toppa. The latter two have entered the Chinese market this year. The cautiousness at the time has now been replaced by frequent new actions. The whip behind Coca-Cola appears to be more and more competitors but in fact consumers whose tastes keep changing.
From sugar-free cola, sparkling water to sparkling wine, these are exactly the three stages of Coca-Cola’s diversified business exploration, with the goal of reducing its dependence on sugary soda. Coca-Cola has already tasted the sweetness of sparkling water.
Since 2015, the soda water market has achieved double-digit growth every year. Although there is competition between the soda brand LaCroix and the old rival Pepsi in North America, there are also many challenges from players such as Yuanqi Forest and Xixiaocha in China. But currently, sparkling water has become one of Coca-Cola’s fastest-growing product lines in the United States. Now, Coca-Cola has once again entered a field where capital and players are madly entering the game.
The high-frequency, high-margin, and addictive tobacco and alcohol business has always been regarded as a good business. E-cigarettes and low-alcohol alcohol have changed the taste and image of cigarettes and alcohol because of better accessibility, including women and young people into the consumer army, and have a broader market. Take the same low-alcohol beer as an example, the gross profit margin of the brand side is generally around 40%, and the gross profit margin of Budweiser can even reach 52%.
From the perspective of market size and industry growth rate, low-alcohol wine is one of the market segments with the fastest growth in the wine market in recent years. According to the “Analysis of the Market Prospects and Status Quo of the Low Alcohol Industry in 2020” released by the Academia Sinica, the market size of China’s fruit wine industry is approximately 231.5 billion yuan in 2019, and the growth rate of consumption in the low alcohol market in China has been increasing in the past two years. above 50.
According to CBNData’s consumption statistics, the post-85s, post-90s and 95s are all sources of intergenerational increase in alcohol consumption, and the post-95s have a significant upward trend in consumption. In the eyes of young consumers, low-alcoholic beverages coincide with the concept of “healthy and slightly tainted” that young consumer groups believe in.
The empty card that claims to use trendy brand thinking to make sparkling wine not only co-branded with the national trend brand in, but also invited hip-hop singers as endorsements; like Topak, the keywords used in the external promotion of the brand are “trend”, “Cool”. Although these words are not very cool when used for self-promotion, you can see their ambitions and are aimed at the group of young people who like to party.
When the e-cigarette market has been closed by the Internet ban, the upcoming high taxes and strict supervision, low-alcohol alcohol has become a fierce battlefield. According to the “Shen Ran” report, since the first half of 2020, at least six founders or executives of e-cigarette companies have started low-alcohol entrepreneurship projects.
Among them are Chen Yicheng, co-founder of SnowPlus, Liu Shuo, former head of national channel sales of SnowPlus, Liu Zhe, a former executive of Flow Electronic Cigarette, and Zheng Bohan, former partner of YOOZ e-cigarette products. The wine brand has a ton of horsepower, GoQiQingJiang, a quarter past ten, and Lanzhou, and all have received financing.
Originally, e-cigarette entrepreneurs mostly wanted to become China’s next JUUL. In 2018, this American e-cigarette brand, which was established less than four years ago, occupied more than 70% of the U.S. market share. However, the disciples of JUUL turned to White Claw.
White Claw can be considered as a sparkling wine version of JUUL. It took only three years to capture 60% of the American soda sparkling wine market, and its sales in 2019 exceeded RMB 10.5 billion. Everyone wants to replicate their success. Statistics show that hundreds of low-alcohol wine merchants have opened shops on Tmall.
Opportunity for Coca-Cola
Among the local entrepreneurs who have capital support, does Topak have a chance? The answer to this question may not be certain by Coca-Cola itself. Judging from the degree of competition in the Chinese market, sparkling wine is still a blue ocean with the insufficient competition.
Among the four sub-tracks of low alcohol, beer competition is fierce. Rio has taken the pre-mixed mind earlier. Fruit wine and sparkling wine have not yet taken over the dominant players, and their sales rankings on Tmall have changed dramatically. The biggest problem facing sparkling wine players is that consumers are not yet familiar with this category-trying a new brand often requires greater courage and curiosity than a new product.
In the past, only big brands had the patience, budget, and the most extensive distribution channels to educate consumers. Small and medium-sized brands may be able to be more flexible during their entrepreneurial period and more keenly grasp the trend of market segments, but large companies are likely to win in the end. However, when Li Jiaqi and other top anchors have become trusted shopping guides for many people, and their live broadcast rooms have become a new channel for many people to try, small brands also have the opportunity to be seen.
This time, Coca-Cola is very cautious in selling Topak on Tmall, just to test the waters and see how consumers react. In this regard, Coca-Cola explained when it first launched Topa in the Latin American market in September last year, “Before expanding Topo Chico Hard Seltzer to more markets, Coca-Cola will take a test and learning approach. We hope to be fast and flexible. To act in a way that we believe to be reliable consumer and customer propositions”. The question is, will everyone buy drinks online?
Generally speaking, offline ready-to-drink channels are the main channels for alcohol consumption. You can buy and drink at restaurants and hotels, buy a few cans from a small convenience store and take them home, or temporarily place an order on platforms such as Tmall Supermarket and JD Supermarket, and wait for the drinks to be delivered within an hour. Even Coca-Cola’s diehard fans are more likely to choose dealers with more competitive prices on the e-commerce platform.
Obviously, Coca-Cola introduced Mexican-style beverages into the country and sold them in flagship stores. Like many brands now regard Tmall as the second official website, the function of launching new products and establishing the brand mind is far greater than selling attributes. Coca-Cola, a brand that has always been good at offline operations, is likely to put a broader battlefield in offline distributors in the future. This time, it was just a “proofing” the brand did for the distributors.
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