Coca-Cola is using a sparkling-water brand with a cult following to take over a $16 billion industry

Topo ChicoTopo Chico is going global with the help of Coca-Cola.
  • Topo Chico’s sales grew by 30% in the first quarter of 2018, according to Coca-Cola executives.
  • Coca-Cola acquired Topo Chico for $US220 million in October 2017.
  • The sparkling-water brand has been around for more than a century, but it gained a cult following in recent years.

A sparkling-water brand with a cult following is giving Coca-Cola an edge in the booming sparkling-water industry.

Topo Chico sales grew roughly 30% in the first quarter of 2018, Chaly Jo Moyen said at Beverage Digest’s Market Smarts conference this week. Moyen – Coca-Cola North America’s senior vice president of strategy, insights, and decision science – said the beverage is thriving by “fulfilling a unique need.”

Topo ChicoTopo Chico

Coca-Cola acquired Topo Chico for $US220 million in October 2017. However, the brand’s history extends far beyond its deal with Coke.

Topo Chico was first bottled in 1895. The beverage takes its name from a mountain in Mexico that’s associated with a legend that the sparkling-water brand continues to use in marketing.

According to the legend, as recorded on Topo Chico’s website, in the 1440s, an Aztec princess was suffering from an illness. Desperate for a cure, her father Moctezuma I Ilhuicamina asked priests in the kingdom for advice. They told the king that his daughter needed to visit “strange and hidden waters” to the north.

Topo ChicoTopo Chico

“Encouraged by this news, Moctezuma I ordered an immediate expedition to take his daughter to this amazing place,” the website states. “After travelling long and rugged roads, the Princess and her expedition reached a fertile valley flanked by mountains. To the east, they saw a mountain with the form of a woman’s face (now Cerro de la Silla) and a mole-shaped hill, from whose slopes flowed the prodigal waters.”

According to legend, the princess recovered after bathing in and drinking the water from the mole-shaped hill, which was called Topo Chico.

Topo Chico grew into a major sparkling-water brand throughout Mexico in the first half of the 20th century. By the late 1980s, Topo Chico was being sold in the United States and was marketed primarily to Mexican-American communities.

Topo chicoTopo Chico

Topo Chico has developed a cult following in more recent years, especially in Texas. Bartenders began using the drink in cocktails at trendy bars, and retail sales exploded in the early 2010s.

“For relief, natives and pretenders (talking about you, Brooklyn transplants in your boots and bolo ties) reach for an ice-cold Topo Chico, a Mexican sparkling water with an effervescence as aggressive as the summer heat is oppressive,” The New York Times reported in 2016.

The article continued: “This super bubbly agua mineral, in retro green-tinted glass bottles, has developed a fervent following here in Texas. Devotees stock entire refrigerators with the stuff and tattoo themselves with the brand’s logo, an Aztec princess who legend has it was healed by drinking the water, which emanates from an inactive volcano in Monterrey.”

Topo ChicoTopo Chico

The Coca-Cola deal is Topo Chico’s chance to truly go global. In the first quarter, Topo Chico’s distribution in convenience stores grew by 25%.

“We’ll continue to protect the prestige of the brand, which is authentic to its heritage and hip without being pretentious,” Kellam Mattie, a vice president of marketing and innovation at Coca-Cola, said in a statement. “It’s important for us to maintain the relevance with the core Topo Chico fan base while introducing the brand to new people.”

Meanwhile, the $US16 billion bottled-water industry is booming, with brands like Aquafina and Poland Springs far outpacing the growth of sodas like Coke and Pepsi. In 2017, the carbonated-soft-drink category declined 1.3% by volume, while bottled water grew 6.2%, according to industry publication Beverage Digest.

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