Coca-Cola is merely testing the waters with its new alcoholic drink

The changes are coming thick and fast for global drinks giant Coca-Cola. Having already reformed a key brand, cut pack sizes in preparation for the UK sugar tax and pledged to improve its recycling commitments, the company is now preparing for its first ever foray into the alcohol market. But don’t expect any seismic shift in global strategy just yet.

On a global scale, this news seems relatively low-key. Launching exclusively in Japan, the company will create its own version of the alcopop-style drink ‘Chu-Hi’, a sparkling fruit-flavoured beverage with a hint of local spirit shochu. Whilst the alcoholic drink is a first for the company, this doesn’t immediately imply it is planning to rip up its own rulebook.

Coca-Cola Japan has a long history of launching innovative new products – it claims it introduces 100 of them a year on average. This particular notion is not exactly a departure from the Japan unit’s highly explorative portfolio of drinks, in a country where demand for exciting new ideas is greater than anywhere else on the planet.

The focus on alcohol does not reflect any concerns regarding the company’s core brand performances in Japan either. Its Coca-Cola and Coca-Cola Zero brands recorded healthy growth of 2% and 4% respectively in 2016, according to the latest figures from GlobalData, while national sales of carbonated soft drinks continue to soar. All signs point to this being another imaginative notion for a consumer base which is always keen to try new drinks.

But it is globally where this product could have a greater impact. News of the launch does seem to hint at a potentially broader approach to beverages in the future. Whilst Chu-Hi is not going anywhere, a successful introduction would certainly provide the company with a global platform to diversify further. Facing less positive carbonates sales outside of Japan — it withdrew its Coca-Cola Life variant from the UK market in June last year following poor performance — the growing number of health-conscious consumers moving away from ‘pop’ and sugar-laden fizzy drinks is forcing the world’s biggest soft drinks manufacturer to mix things up.

The prospect of venturing into the alcohol market had been mooted at the end of last year, although James Quincey, Coca-Cola CEO, was sceptical at the time. He told CNBC, “There’s just so much more we already have strength and capability in, it just doesn’t make sense to do that next,” although he added that he would “never say never”. Now, it appears those initial doubts have waned.

The hints are in the quotes. Jorge Garduno, president of Coca-Cola Japan, confirmed the plans to venture into alcoholic production in an interview on the company’s website, calling the move a “modest experiment”. Modest, this might well be. The relatively discreet nature of this announcement gives Coca-Cola the perfect opportunity to broaden its beverage horizons, using the eccentric Japanese market as its guinea pig. If it goes well, why not try something similar elsewhere?

Coca-Cola’s flagship beverage has long been used as a mixer for spirits and is a frequent ingredient in popular cocktails such as Long Island Iced Tea, Cuba Libre and Mudslide. Ironically, its syrupy sweetness is also heralded as the perfect hangover cure. In a market full of daring new ideas, now is as good a time as ever for the company to move into alcoholic production for real.