• by Thom Forbes  @tforbes, March 8, 2018

Coke has been informally mixing with rum since the conclusion of the Spanish-American War but, until now, the bottles and cans rolling off the lines at Coca-Cola bottling plants have been alcohol-free. Yesterday, word went viral that it is launching a version of a popular drink in Japan in a category called Chu-Hi that’s made with the distilled beverage 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,” says Jorge Garduño, president of Coca-Cola’s Japan business unit,  in an interview posted on the Coca-Cola Journey blog last month. 

“Chu-Hi canned drinks mostly range in alcohol content between 3% and 8% — a profile that has put them in direct competition with beer, and proved particularly attractive to female drinkers. The appeal of Chu-Hi has been enhanced by the relentless trial-and-error approach by major Japanese producers Kirin, Asahi, Takara and Suntory, which have released flavors that include yoghurt, acerola and wild basil,” reports Leo Lewis from Tokyo for Financial Times. 

“The total Japanese market for shochu, a vodka-like spirit distilled from potatoes, rice, barley or sugar that provides Chu-Hi with its kick, has expanded almost 40% since 2011,” Lewis continues.

“Coca-Cola’s Japan unit has long sold many drinks that aren’t available elsewhere, including various teas and coffees and a laxative version of Coke called Coca-Cola Plus that was marketed as a health drink,” write Suryatapa Bhattacharya and Cara Lombardo for the Wall Street Journal.

“Coca-Cola, like its soda-industry peers, has expanded into segments such as coffee and smoothies to combat diminishing soda sales and respond to changing consumer tastes. Chief Executive James Quincey has said he wants the company to be known for something other than soft drinks, and recent marketing campaigns have centered around the idea that it offers drinks for every occasion,” they continue.

Technically, “this isn't Coca-Cola's first foray into alcohol. Before company founder John Pemberton created what ultimately became the Coca-Cola consumed today, he developed a coca wine, which was made with French wine and cocaine. Temperance laws at the time ultimately got him to swap out the alcohol part of his concoction,” writes Zlati Meyer for USA Today. “In 1977, Coca-Cola got back into the wine business, but ultimately sold that division, called Wine Spectrum, to Seagram & Sons in 1983, according to Leith.”

“The new drink is the latest idea from a beverage maker that has expanded to new markets with an array of products as the sugary-soda industry, battered by concerns about its health effects, continues its multi-decade decline. In 2016, Coca-Cola said it unveiled the equivalent of nearly two new products globally every day,” report Tiffany Hsu and Hisako Ueno for the New York Times.

But it’s not about to mess — again — with its namesake.

“‘When we talk to consumers, they react very negatively to the idea that we might change the recipe for Classic Coke,' says Jon Woods, general manager of Coca-Cola for Britain and Ireland. ‘We tried it once before, and it’s become one of the great marketing textbook stories of what not to do,’” writes Laura Slattery for Irish Times.

“Coke’s own website describes the 1985 launch of New Coke as having spawned 'consumer angst the likes of which no business had ever seen,’” Slattery reports. “But Coca-Cola, headquartered in Atlanta, Georgia, is a 132-year-old drinks behemoth: it survived its self-inflicted blip, and it will survive the sugar tax [which is imminent in Ireland] even as the price-per-liter of its mainstay product rises by what might be an off-putting amount for some.”

As for Chu-Hi, don’t look for it at the local 7-Eleven.

“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. But I don’t think people around the world should expect to see this kind of thing from Coca-Cola,” Garduño says in the Coca-Cola Journey post. “While many markets are becoming more like Japan, I think the culture here is still very unique and special, so many products that are born here will stay here.”

Then again, I’ll bet you a Mamma Chia Blackberry Hibiscus the word kombucha — never mind the drink itself — ever crossed the lips of John Bergin or Mal Macdougall. We’ll check back on Chu-Hi in a decade.