Amidst the fizzy golden age of bubbly-water, Coca-Cola has purchased Topo Chico for $220m in hopes of providing an alternative for sugar-conscious consumers.
Actually, the two brands go way back: Topo’s parent company, Arca Continental, was the first to bottle Coke outside of the US back in the ‘20s, and they’re now the second largest Coke bottler in Latin America.
Much like LaCroix, Topo has been around forever — sparkling out of Monterey, Mexico for over 120 years. But recently they’ve been riding the carbonation craze: store brand seltzer sales grew by 12% over the past year, with Topo’s up 28%.
And, as soda consumption sinks to some of the lowest levels since 1985, Coke’s hoping some of Topo’s “cult coolness” will rub off on them.
The Cult of Chico
Packaged in glass bottles and retro logos, with a lovably terrible website full of missing page links and Steve Miller Band promos, Topo has risen to legendary status in Texas, gaining traction among young consumers drawn to artisanal, authentic-feeling brands.
Last year they dominated 62% of Texas grocery stores’ and 74% of convenience stores’.
But, despite dominating the Lone Star State (accruing 70% of their sales), outside of Texas, Topo is a lot less well-known, and their estimated $80m in annual revenue is dwarfed by LaCroix’s nearly $800m.
In other words, they’re small but mighty.
Which is exactly why Coke acquired them.
The deal was made through Coke’s Venturing & Emerging Brands unit, an experimental incubator focused on scaling up distribution of “smaller, high-value brands” — particularly ones that don’t make soda.
It’s all part of their plan to become a “total beverage company” by investing in on-trend brands like ZICO coconut water, Honest Tea, and Illy espresso, and — in Topo’s case — “create more ‘Texases.’”
Src - https://thehustle.co/coke-acquires-se...
Coca Cola is Getting in the Bubbly Business | |
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