Coca-Cola is introducing Topo Chico Sabores, a line of premium sparkling waters infused with fruit juice and herbal extracts, aiming to expand this fast-growing beverage into a new non-alcoholic category with a premium drinking experience. Based in Atlanta, Coca-Cola has quickly advanced innovation for Topo Chico through the introduction of new flavors and product lines, including alcoholic options via its partnership with Molson Coors, providing consumers with more choices and reasons to enjoy this beloved drink. The company is optimistic that Topo Chico could eventually achieve sales exceeding $1 billion.
Topo Chico Sabores, reminiscent of a product the company offered over a century ago, will be available in three flavors: Blueberry, Tangerine, and Lime. These new offerings are set to launch this month. “What’s particularly interesting is how the brand has transcended the sparkling mineral water category, becoming something larger than the category itself,” stated Dan White, Coca-Cola’s chief of new revenue streams, in an interview. “This is where the growth for Topo Chico is coming from, and it’s what we are really focusing on.”
In 2017, Coca-Cola acquired Topo Chico for an estimated $220 million, a brand it had collaborated with for nearly a century. This purchase was part of Coca-Cola’s aggressive strategy to diversify its beverage portfolio and decrease reliance on sugary drinks. Since then, Coca-Cola has leveraged its resources to expand Topo Chico’s distribution throughout the U.S., transforming it from a regional favorite into one of the leading brands in its category. The demand for fizzy drinks that provide refreshment without sugar has surged, contributing to Topo Chico’s increased popularity. Following its acquisition, the brand’s market share in the sparkling water category rose from 20% to 35% between 2017 and 2021, according to Nielsen data.
“We’ve done an excellent job of allowing the brand to evolve based on consumer preferences,” White said. Research indicates that consumers perceive Topo Chico as more than just mineral water from Mexico. The potential to expand Topo Chico into other categories, combined with a period of strong demand, has led White and others at Coca-Cola to believe it could grow into a $1 billion brand, despite being primarily known for Diet Coke, Body Armor, and Dasani. “It’s on track to achieve that,” White mentioned, though he refrained from making predictions about when it might reach that milestone.
Currently, flavored sparkling water generates roughly $300 million in U.S. retail sales, with growth expected to continue. While demand remains strong, Topo Chico has encountered challenges in production due to insufficient bottling equipment and a widespread shortage of glass bottles. Coca-Cola is actively working to resolve these issues. Sales for Topo Chico’s flavored offerings dropped 41% to $50 million during the 52 weeks ending on February 23, according to Circana, a Chicago-based market research firm, while non-flavored sales declined 6% to $184 million, placing it third in the seltzer/mineral/sparkling category behind Nestlé’s Perrier and San Pellegrino. The decline in flavored water sales was sharper compared to the original mineral water, as Coca-Cola prioritized resources toward the core offering amidst these challenges.
Growth for the iconic mineral water is further constrained by its source, the Cerro del Topo Chico in Northern Mexico. Coca-Cola is committed to being responsible stewards of this finite resource, which is a significant reason for expanding the brand using alternative water sources for new offerings that do not rely on the Mexican spring. Topo Chico Sabores and other extensions utilize locally sourced water, infused with minerals and carbonation to closely replicate the original’s unique taste.
The company is optimistic about the potential of Sabores, noting that half of Topo Chico’s customers desire more flavored water options. The popularity of Topo Chico Twist of Grapefruit and Twist of Tangerine, which offer lighter flavor profiles compared to Sabores, further indicates growing interest. A primary objective in expanding the Topo Chico brand at Coca-Cola is to provide consumers with more reasons and occasions to enjoy it. For instance, consumers may crave the classic sparkling mineral water, desire the flavors of Sabores and Twist, or opt for a hard seltzer or ready-to-drink cocktail in the evening. Unlike the original Topo Chico, the new offerings will use aluminum packaging instead of glass, addressing the packaging shortage and allowing consumption in areas where glass is prohibited.
“We are creating multiple entry points with Topo Chico,” White explained. “This approach should offer consumers new ways to experience the brand in ways they enjoy.” Moreover, as health-conscious consumers look for beverages that support wellness, including those with life extension benefits like calcium citrate with vitamin D, Topo Chico’s diversification into flavored sparkling waters may align well with these trends.