We — as in, the first page of Google results — don’t know if H.L. Mencken ever actually said “No one ever went broke underestimating the intelligence of the American public” verbatim. But we — as in, me and you, dear Hop Take reader — do know that the red-hot malt-/sugar-based hard seltzer boom of the past few years is currently giving way to the rise of spirits-based canned cocktails. The age of White Claw is in its twilight, and soon the High Noon epoch begins in earnest. So we find ourselves with a contradiction in terms and SKUs as major firms roll out ready-to-drink distilled versions of brands they’re currently selling in fermented form and hope the American drinking public doesn’t notice.
Does a tequila-based cocktail invalidate a sugar-based iteration of similar drinks that bear the same label? Only if the customer grasps the difference, and Menckian logic tells us pretty emphatically that they won’t. Luckily, we don’t have to wonder, though, because Molson Coors and Coca-Cola are going to run the simulation for us in real time, with Topo Chico’s beverage-alcohol aspirations and the alcohol-intelligence quotient of the United States consumer hanging in the balance.
What is the point of selling two styles of booze under the same banner, besides the unquenchable shareholder thirst for more money and a conviction most customers won’t know the difference? Alas, the Big Beverage tandem behind Topo Chico hard seltzer and its soon-to-come spirits-based brethren had no answer, not for Hop Take at least. Coke didn’t respond to my request for an interview, and no one was available from Molson Coors before deadline to talk Topo. (Or chat Chico? Either way, it didn’t happen.) But in the absence of corporate wisdom, we press on. Let’s consider the facts at hand.
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First: Topo Chico didn’t start as a beverage-alcohol brand. The bubbly drink hails from a volcanic spring in Mexico that gained popularity as a #wellness spa for fin de siècle American medical tourists. But a century later, Topo Chico’s reputation stateside had pivoted from restorative to refreshment, its iconic glass bottles a byword for desert authenticity (and hipster approximations of it, too.) . The niche brand’s controversial 2017 sale of U.S. rights to Coca-Cola Company didn’t upset me any more than the accumulative tendencies of global capital do generally, but I understand why people were mad. Nothing gold can stay, including lucrative beverages in an increasingly globalized consumer packaged goods landscape. Soon, plastic-bottled Topo Chicos started showing up on supermarket shelves and Amazon wish lists, thrilling far-flung fans and appalling people who understand the carbonation-retention differentials of PET vs. glass. Coke’s 2020 “brand authorization partnership” with Molson Coors to introduce Topo Chico hard seltzer followed apace.
It was the obvious move. Acquisition aside, the mineral water still maintains a cult-like appeal with American drinkers, and the traditional firewall between alcoholic and non-alcoholic beverage brands had by then eroded to the point that Topo Chico’s Big Red handlers could see the dollar signs on the other side. The 2020 tie-up has paid off: Since hitting the American market in 2021, Topo Chico hard seltzer has been on a no-bullshit heater as one of the fastest-growing hard seltzers in the segment. Its success has paved the way for the alcoholization of other popular soft drinks in Coke’s portfolio, like Simply Lemonade and Fresca. (Those boozed-up versions are produced in partnership with Molson Coors and Constellation Brands, respectively.)
That Topo Chico’s hard seltzers are reportedly made with regular ol’ filtered fizz, rather than the titular mineral water from Monterrey, hasn’t held it back from its race to the near-top of the segment, either. “I was expecting the giant bubbles that make it nearly impossible to chug an ice-cold Topo and was sorely disappointed,” wrote the Houston Chronicle’s Abigail Rosenthal in her March 2021 review of the then-new hard seltzer. “Topo Chico is well known for its aggressive bubbles, and the usual Topo crispness was missing from the cans of seltzer.” Nevertheless, the hard seltzers have charged hard in Texas and the Southwest from the very beginning. Mencken would be impressed.
Beyond the core pack, Topo Chico’s Ranch Water and Margarita hard seltzer varietals are also selling like gangbusters, which is no surprise given the underlying brand’s close affiliation with Mexico and the American Southwest. Of course, Margaritas and Ranch Waters are traditionally made with full-proof tequila, not the fermented sugar that makes Topo Chico’s hard seltzers hard. The agave spirit, as you may have heard, has been on a no-bullshit heater of its own. It’s projected to surpass both vodka and whiskey to become the top-selling spirit in the United States as soon as next year, and is tied for first with vodka as the top base spirit for ready-to-drink canned cocktails. So in one sense, Molson Coors’ recent announcement that tequila-based Topo Chico canned cocktails are headed our way in 2023 was preordained; as hard seltzer settles into the single-digit year-over-year sales of a maturing segment, the macrobrewer “beverage company” has gotta find growth elsewhere. Spirits-based canned cocktails are sold for more money in different, less-crowded places, and drinkers want ‘em. It’s no surprise that’s where Molson Coors is steering the brand next.
Of course, Topo Chico isn’t the only hard seltzer heavyweight headed for the higher price points and higher-end ~vibes~ in which High Noon, the vodka-based, Barstool-backed E. & J. Gallo juggernaut, has been basking. Truly, second only to White Claw in the slim-can stampede, rolls out a vodka version next week. [Disclosure: I previously owned some stock in Truly’s corporate parent, Boston Beer Company, from which I divested prior to taking over this column in order to cover the firm directly without conflict of interest. I own no individual stocks related to my coverage.] But as a natural mixer for clear liquors of all kinds, Topo Chico is poised to go further, and faster, than its FMB rivals. As Molson Coors’ VP of next generation beverages David Coors boasted to distributors last week: “We see a big opportunity in tequila RTDs, and it just so happens we have the powerhouse brand that’s synonymous with tequila cocktails.”
To which Hop Take says: “yes, and.” While spirits-based RTDs are a logical next step for the brand, fermented Topo Chico hard seltzer is still very much for sale, and will continue to be. What’s the difference? So glad you asked. “These are real cocktails, not hard seltzer,” vice president of innovations Jamie Wideman told the firm’s middle-tier partners, per a Brewbound report. But! But! “Real” cocktails imply the existence of fake ones. An informed consumer might reasonably ask Molson Coors to explain the difference between that product — let’s call it TC(F), for Topo Chico (Fermented) — and the new distilled spirits-based line, which we’ll call TC(D). After all, those TC(F) Margaritas and Ranch Waters they’ve been guzzling down are advertised as “inspired by the classic Margarita” with “hints of real lime, salt, and tequila.” Upon learning that these are just marketing semantics — “inspired by the truth,” with “hints of reality,” you might say — they might be a bit miffed. And when they see the new TC(D) drinks at the store actually boast an actual tequila base and cost a few more bucks per variety pack… well, from where your humble Hop Take columnist is sitting, it’d be reasonable for that informed consumer to ask Molson Coors WT(F)?
If the firm is betting that most rank-and-file drinkers won’t think this hard about it, I wouldn’t take the other side of the wager. But the courts are a different bag of chips, and even before the advent of tequila- and vodka-based Topo Chicos, Coke found itself posed with a legalese version of this question in the form of a class-action lawsuit. Filed in August, Warren vs. The Coca-Cola Company alleges that Topo Chico hard seltzer’s margarita pack makes “false and misleading representations” about its booze type in order to command higher prices from unsuspecting drinkers who think they’re buying proper, tequila-based margs.
“There’s just such a blending of these categories,” Spencer Sheehan, the attorney representing the plaintiff in the case, tells Hop Take. Topo Chico’s various non-alcoholic and alcoholic offerings “make it very confusing about what it is you’re getting. So, they need to do a much better job at being truthful.” The lawyer, known to industry critics as the “vanilla vigilante” for the “tsunami of lawsuits” he’s filed over food label listings of the bean in question, contends that the fuzzy legal definition of “hard seltzer” has created a gray area ripe for misleading confused customers over the booze they’re buying. In the suit — which is just getting underway in federal magistrate court — Sheehan also echoes the Chronicle’s complaint, arguing the fermented marg is fugazi because it “does not contain the sparkling mineral water sourced in Monterrey, Mexico, which is an essential part of Topo Chico beverages.” As you might guess, he views the recent TC(D) announcement as just more evidence that Molson Coors intentionally mislabeled TC(F) to bamboozle consumers into paying more for less. After all, real cocktails imply the existence of fake ones.
🤯 Hop-ocalypse Now
Remember when craft breweries used to eskew high-ABV, adjunct-heavy, bang-for-buck beers as juvenile perversions of the almighty artisanal form? Hop Take can’t either. Anyway, Brewbound reports that in 2023, ,Kirin Holdings Lion Little World Beverages New Belgium Brewing will roll out a “sequel” to its wildly popular 9.5 percent ABV Voodoo Ranger Juice Force IPA called — wait for it — Fruit Force. The new “fruit punch IPA” label bears the brand’s familiar skeletal fighter pilot dressed up in a sharp new uniform. Pretty sure there’s a “Top Gun” / “Top Gun 2” joke in here somewhere: Tom Booze? Highway to the Ranger Zone? Talk to Me, Juice? Hmm… can’t quite land it.
📈 Ups…
To continue mixing Hollywood and fighter-pilot metaphors, bombers remain very dead, but craft breweries are rebooting the bankable 12-oz can… OK, I’ll stop: Big Beer makes nutrition-labeling moves… Distributors have less at-risk beer than recent past, says NBWA… Calif. haircut-in-chief Gavin Newsom signs taproom-expansion bill…
📉 …and downs
Monster scores, well, *monster* damages in Bang Energy “super creatine” suit… Embattled BrewDog CEO James Watt announces on LinkedIn he’s got a book coming about the “criminal plot” to take him down… U.S. beer shipments up in August, still down YTD, per TTB and Beer Institute… Speaking of BrewDog, one of the world’s top McDonald’s franchisees will open 3 Denver taprooms for the firm, which is Punk, Actually… Lipton Hard Tea? Lol sure, whatever man… Waymo, Constellation test out driverless beer trucks, what could possibly go wrong…
