Coca-Cola's (KO) initial foray into selling alcohol via Topo Chico hard seltzers appears to be off to a promising start.
"So the early responses in Latin America and Europe are good," Coca-Cola Chairman and CEO James Quincey tells Yahoo Finance Live.
The beverage giant began rolling out the hard seltzer line in Latin America and Europe late in 2020 after striking a distribution deal with beer maker Molson Coors. Coke then debuted four flavors of the product in nine U.S. states in the latter half of March.
"It has been in the U.S. for a couple of weeks, particularly in the Southern states and particularly Texas where Topo Chico is very strong," Quincey added. "And it's selling well on two weeks of data and a very strong start in Texas. Of course what we are really focused on is how to get more national and how to drive repeat rates. That will be the key, can we drive repeat rates. A very encouraging initial start."
Coke is entering a crowded hard seltzer market dominated by White Claw, Truly and recently Corona. But the market is too hot for a growth-focused Coke to ignore. Off-premise hard seltzer sales surged 160% year-over-year to $4.1 billion in 2020, according to data from Nielsen. Beer sales only rose 15% last year.
The debut of hard seltzer arrives just as Coke's business is beginning to turn the corner from the pandemic.
Coke handily beat first quarter Wall Street sales and profit forecasts on Monday, powered by demand for zero sugar drinks and cost cuts.
The company reiterated its full-year sales outlook for a high-single digit percentage year-over-year gain. Earnings growth continues to be pegged at high-single digits to low-double digits.
Coke shares are up slightly in afternoon trading Monday.
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