At a sampling event in Fukuoka on Saturday, hundreds of people lined up for a taste, including some who didn’t expect to find the U.S. company experimenting with Japanese-style booze.
Hiroshi Tsukano, 59 years old, a financial planner, thought one of Coca-Cola’s competitors was relaunching an old favorite. “I’m a bit surprised that this is a Coca-Cola brand,” he said. “It’s nice, but I would add a splash of grapefruit or more lemon to it.”
Canned drinks known as chuhai have long been popular in Japan. They are often made with a distilled grain-based alcohol called shochu and carbonated water flavored with fruit juice or other flavorings.
Coca-Cola, a big competitor in nonalcoholic drinks in Japan, is entering the fray with a lemon-flavored version of chuhai called Lemon-Do. It will be available with 3%, 5% and 7% alcohol, including a salty-lemon version and another that is flavored with honey and lemon. The drink doesn’t include any Coke.
The company enters a highly segmented and competitive market, where others such as Suntory Holdings Ltd., Kirin Holdings Co. andAsahi Group Holdings Ltd. dominate supermarket and convenience-store shelves. Coca-Cola launched the foray on the southern island of Kyushu; its plans for the rest of Japan or other countries aren’t set yet.
“We’ve started to experiment because, in the end, we are trying to follow the consumer. And, in the case of Japan, this is a relatively well-developed segment of low alcohol,” Coca-Cola Chief Executive James Quincey said at a shareholder meeting on April 26. He observed that rival companies already make both alcoholic and nonalcoholic beverages
.Although it owned a winery from 1977 to 1983, Coca-Cola has never directly sold an alcoholic drink during a history that dates to 1886.
Akari Utsunomiya, an analyst with Euromonitor International, said Coca-Cola has previously used Japan to test drinks for wider rollout, and the start on Kyushu, with a population of 13 million, could give it insight to apply in other countries.
Despite falling demand overall for alcoholic drinks in Japan owing to the country’s shrinking population, demand for canned booze has been growing, in part because it is taxed less than beer and is cheaper. Most chuhai drinks are priced at roughly ¥200, or about $1.80, a can. Coca-Cola’s newest offerings will retail for ¥162, including tax.
Mr. Tsukano, the financial planner, said he buys beer and chuhai for himself and his wife once or twice a week, as many as three cans at a time. He said he likes to chase two cans of beer with a can of chuhai. “First I am going to ask my wife if she likes this, then we will buy it,” he said.
The chuhai market is seen as a growth area because it appeals to both men and women
Coca-Cola is casting a wide net in trying to capture female drinkers, offering lower-alcohol options alongside the stiffer 7% variation. Recently, chuhai drinks with high alcohol content have been growing quickly.
The company is running television advertisements featuring the actor Hiroshi Abe, who poses as a bartender carefully mixing a lemon-flavored drink for a female customer at his bar
It was a poster of Mr. Abe that attracted Nae Osawa to the tent where the drink samples were distributed. “If this was served at a bar, I would drink it,” said Ms. Osawa, 25, who works for a cosmetics company in northern Japan and was in Fukuoka on a business trip. She sipped the salty-lemon version with 7% alcohol. “It goes down easy,” she said.
Keiko Urabe, 42, and her husband, Shinji, also 42, said they like chuhai drinks at their local pub paired with grilled meat, and on occasion buy cans to drink at home.
Ms. Urabe said she prefers Coca-Cola’s version to her local pub’s. “The lemon is a bit more diluted at these places. This one is nicer.”
By- Suryatapa Bhattacharya Wsj News
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