Topo Chico Is Being Rolled Out Nationwide Because Coke Is Trying To Get Into The Sparkling Water Game
It’s safe to say that sparkling water is having a moment. Whether it’s LaCroix or Pepsi’s new sparkling water, Bubly, it’s hard to miss the fizzy drink sensation that has taken over mini-fridges and supermarkets across the country. Now it seems that Coke wants to capitalize on the trend and cash in on fizzy drink craze.
Their secret weapon is Topo Chico, a drink that is sourced from a limestone spring concealed under a mountain in northeastern Mexico. The drink was built on a legend of the thermal waters of the Cerro del Topo Chico, which is where the drink got its name. The story goes that the hidden spring water cured an Aztec princess’ illness. While there’s no way to verify the myth, Topo Chico indeed does come from the same underground spring since 1895.
Coke is rolling out Topo Chico nationally. However, many are asking, will it lose its soul in the process?
While the brand has been mostly known in northern Mexico and a handful of U.S. states, it’s already carved out a niche market that has made it a cult favorite in places like Austin, Texas. Popular for it’s “throwback image” and cool design, Topo Chico has seen massive growth, over the last year U.S. sales jumped 39 percent to nearly $130 million, according to data from IRI, a Chicago-based market research firm.
This could be credited to Coke’s $220 million purchase of the brand two years ago. While Topo Chico was originally owned by Arca, the second-biggest Coca-Cola bottler in Latin America, it’s still in charge on bottling the drink in Mexico. The company has also invested close to $42 million into production and operation to satisfy growing customer demand since Coke acquired the brand.
Many saw Coke’s purchase of the brand as a way for the beverage company to enter the growing sparkling water business or rather match up with Pepsi’s popular new drink, Bubly. Since being launched a little over a year ago, Bubly has been a leader in sales and in growth as the company has put the drink in vending machines across the country. It’s even taken on popular millennial brand, LaCroix. Yet, Coke entering the sparkling water game could change the playing field entirely.
The purchase of Topo Chico didn’t come without a bit of resistance from long-time customers and locals who love the brand.
Topo Chico has deep roots in the Southwest part of the U.S. and in Mexico. So when Coke got involved, things got a little personal between fans of the drink and the giant soda company. Whether that was due to the increased price of the drink or just simply not giving money to a giant corporate entity like Coke, there was boycotts and some anger from Texans.
Ramon Maraboto, who oversees the Topo plant for Arca, told Bloomberg that Coke needs to be wary of rolling out the beloved drink and not losing sight of what makes it special. That uniqueness and the original look are what made the fizzy drink so beloved among fans.
“Coca-Cola is aware they’re buying a brand that needs to be taken care of,” Maraboto said. “This brand has its own fingerprint.”
Keeping that mystique and coolness with the drink is one of Coke’s biggest challenges. That’s why the company is doing a small national rollout of the beverage with efforts to preserve some of that Mexican background and nostalgia that many love about Topo Chico.
“We don’t want to lose that by putting it everywhere,” Chaly Moyen, who oversees Coke’s strategy in the U.S. and Canada, told Bloomberg.
Don’t be surprised if you see a pack of Topo Chico at a grocery market near you soon.
Coke sees Topo Chico becoming the new “it” brand when it comes to sparkling water. According to Maraboto, Topo Chico sales in the U.S. could pass it’s own in Mexico in the next year. This is an example of that quick growth and advancement the drink has had in the quick two years under new ownership.
Even in Pahoa, a town with a population of about 1,000 people located in the southeast corner of Hawaii’s Big Island, the Island Naturals Market & Deli has sold the drink for the past three months. Kai Sorte, the store’s manager, told Bloomberg that the drink is already among its top sellers. People can’t get enough of it and there seem to be no signs of slowing down.
“It’s definitely picking up speed,” Sorte said.