TOKYO -- Coca-Cola in October will take an alcoholic drink nationwide in Japan as the global soft drink giant attempts to diversify its way out of the mature and crowded soda pop market with an "alcopop" offering.
Coca-Cola Japan last year began test-marketing Lemon-Do, a lemon chuhai, in the southwestern region of Kyushu, considered the home of chuhai, a type of premixed cocktail with shochu liquor. In October, the Japanese unit will begin shipping the canned alcoholic beverage to supermarkets and convenience stores across the nation, becoming the U.S. beverage giant's sole unit to retail an alcoholic product.
Despite its globally strong brand, Coca-Cola is under pressure to diversify as energy drink makers and other beverage purveyors enter the soft drink market and as consumers vary their thirst-quenching preferences.
Soda pop represents about 70% of the Coca-Cola group's global beverage sales by volume.
Coca-Cola is diversifying in other markets as well. In 2019, the company bought Britain's largest chain of cafes for about $5 billion.
The Japanese unit is already more successful than Coca-Cola group companies in other markets when it comes to selling teas, coffees and other noncarbonated drinks. But Japan's beverage market is saturated, so Coca-Cola decided to diversify into the so-called "alcopop" segment. Lemon-Do went on sale in Kyushu in May 2018.
An elaborate advertising campaign has been planned that will be on a scale similar to campaigns for the company's mainstay brands, including Coca-Cola and Georgia, a coffee beverage.
Other brands have been eroding Coca-Cola's top share of Japan's 4 trillion-yen ($37 billion) nonalcoholic beverage market. According to Inryosoken, a Tokyo beverage market researcher, the company held a 26% slice of the market in 2018, but No. 2 Suntory Beverage & Food had narrowed the gap to 4 points.
Two consumer trends are partially behind Coca-Cola's weakening hold on the market. Soda pop is declining in popularity, and consumers are becoming more likely to head into convenience stores when they get thirsty rather than hit up vending machines, long a strong sales channel for Coca-Cola.