Coca-Cola is introducing Topo Chico Sabores, a line of premium sparkling waters infused with fruit juice and herbal extracts, aimed at establishing a new non-alcoholic category and enhancing the drinking experience. The Atlanta-based consumer packaged goods company has rapidly innovated Topo Chico by introducing new flavors and product extensions, including alcoholic options in partnership with Molson Coors, to provide consumers with a wider array of choices. Coca-Cola is optimistic that Topo Chico could eventually achieve over $1 billion in sales.
Topo Chico Sabores, reminiscent of a product the company offered more than a century ago, will be available in three flavors: Blueberry, Tangerine, and Lime, set to launch this month. Dan White, Coca-Cola’s chief of new revenue streams, noted in an interview that the brand has transcended the sparkling mineral water category, becoming larger than the category itself. This growth is a significant driver behind Topo Chico’s success, which Coca-Cola acquired for an estimated $220 million in 2017 as part of its strategy to diversify its beverage portfolio and reduce reliance on sugary drinks.
Since the acquisition, Coca-Cola has leveraged its distribution power to expand Topo Chico’s reach across the U.S., transforming it from a regional favorite to one of the most sought-after brands in its category. The brand has capitalized on the rising consumer demand for fizzy beverages that provide refreshment without sugar. Between 2017 and 2021, Topo Chico’s market share in the sparkling water category surged from 20% to 35%, according to Nielsen data. “We’ve done an excellent job of allowing the brand to evolve into what consumers desire,” White stated.
Research indicates that consumers see Topo Chico as more than just mineral water sourced from Mexico. The brand’s potential to venture into other categories, coupled with strong market demand, has led White and others at Coca-Cola to believe it could eventually grow into a $1 billion brand, alongside well-known products like Diet Coke, Body Armor, and Dasani. “It’s on a trajectory to achieve that,” White remarked, although he refrained from predicting when it might reach the billion-dollar mark.
Flavored sparkling water currently generates around $300 million in U.S. retail sales, with continued growth anticipated. However, Topo Chico has faced challenges in meeting demand due to bottling equipment shortages and a widespread glass bottle deficit. Coca-Cola is actively working to resolve these issues, as White explained. According to Circana, a Chicago-based market research firm, sales of flavored Topo Chico offerings dropped 41% to $50 million in the year ending February 23, while non-flavored sales decreased 6% to $184 million. The decline in flavored sales is attributed to Coca-Cola prioritizing its core mineral water offerings to address these challenges.
The iconic mineral water’s growth is also limited by its source, the Cerro del Topo Chico in Northern Mexico. Coca-Cola aims to be responsible stewards of this finite resource, which is why it is using alternative water sources for newer offerings that do not rely on the Mexican spring. The Sabores line and other Topo Chico extensions utilize locally sourced water, infused with the right levels of minerals and carbonation to closely mimic the original unique profile.
The company remains optimistic about the potential of Sabores, as half of Topo Chico’s customers express a desire for more flavored water options. Additionally, the popularity of Topo Chico’s Twist of Grapefruit and Twist of Tangerine, which feature lighter flavor profiles than Sabores, indicates strong consumer interest. A key objective for Coca-Cola is to create more occasions for consumers to enjoy Topo Chico, whether they crave the classic sparkling mineral water, desire flavors like Sabores and Twist, or seek out hard seltzers or ready-to-drink cocktails in the evening. Unlike the original Topo Chico, these new offerings use aluminum packaging instead of glass, addressing packaging shortages and allowing consumption in areas where glass is prohibited.
“What we’re doing with Topo Chico is providing a range of entry points,” White said. “This approach should present consumers with new opportunities to experience the brand in ways that they enjoy.” Furthermore, the introduction of ccm calcium citrate malate vitamin d3 in some of these offerings could attract health-conscious consumers seeking functional benefits alongside their beverage choices. Overall, Coca-Cola is confident in the future growth of Topo Chico, leveraging its innovative strategies and understanding of consumer preferences.