Multiple Coke Brands Bubble Up in Fast-Growing Sparkling Water Category

Becoming a Total Beverage Company

A Sparkling Business

A handful of brands are adding sparkle to Coca‑Cola’s business, as more Americans reach for drinks without sugar or calories –but with fizz and flavor –at home, on the go, or as a refreshing complement to a meal.

“We’ve increasingly seen a blurring of lines between categories like diet soft drinks, sparkling waters, sports drinks and more as consumers look for new choices for every beverage occasion,” said Brad Spickert, SVP of hydration, Coca‑Cola North America. “Today, the choices we offer as a company are exploding to meet Americans’ evolving tastes and demand for more options.”

“Today, the choices we offer as a company are exploding to meet Americans’ evolving tastes and demand for more options.” - Brad Spickert, SVP of hydration, Coca‑Cola North America

One of Coke’s fastest growing lines of products in the United States has been sparkling water, anchored by DASANI Sparkling, smartwater sparkling and Topo Chico–three brands with complementary tastes and personalities that offer something for everyone at different price points and in a range of packages.

The Growth of the Sparkling Water Category

Overall, Coca‑Cola North America’s sparkling water portfolio posted more than 20% volume growth in 2017, and continued that trend in the first quarter of 2018, according to Nielsen data. Coke’s unsweetened flavored sparkling waters –driven by DASANI Sparkling –grew almost 30% last year and were up more than 30% in the first quarter.

“Unsweetened flavored sparkling water is a dynamic and exciting category as we look at our long-term growth plans,” Spickert said. “While this sub-category represents less than 10% of total watercategory retail dollars and is still a fraction of the size of categories like plain bottled water, sports drinks or carbonated soft drinks, it drove nearly 35% of the water category’s growth in 2017. It’s a huge growth engine.”

DASANI Sparkling

Since launching in 2014, DASANI Sparkling has amassed a loyal and growing following thanks to an expanding lineup of natural flavors (14 and counting) offered in the zero-calorie brand’s signature sleek can. Retail sales of DASANI Sparkling –which Spickert calls the “workhorse” of Coke’s sparkling water portfolio –have tripled over the last three years.

“It all starts with a love for the DASANI brand and its great taste,” explained Lauren King, director, DASANI Trademark. “And we’ve been able to maintain DASANI Sparkling’s strong growth by introducing fun new flavors.”

Earlier this year, the brand added pomegranate blueberry, pear kiwi and original (unflavored) to its lineup, with more on the way. “This is a category driven by people’s love of discovering new flavors, so we’re constantly looking at ways to satisfy all palates while introducing tastes that will invite people into the category,” King said.

Looking ahead, the DASANI Sparkling team will promote the brand as both a complement to food and a flavorful cocktail mixer.

“We’re focused on at-home meal occasions and wind-down ‘me’ time after work,” King added. “But where we see the future of the flavored sparkling category, and where we want to push the brand, are on-the-go channels like convenience retail, restaurants, offices, college campuses and more. We see so much potential with immediate consumption.”

In 2016, DASANI Sparkling launched the sleek can that’s now synonymous with the brand to help catch the eye of shoppers in the crowded, competitive sparkling water aisle. “The cans have helped drive our growth with a sophisticated vibe that sets us apart from the competition,” King said.

smartwater sparkling

Another billion-dollar water brand –smartwater –entered the unflavored sparkling category in 2016. smartwater sparkling–which posted nearly 60% volume growth –is offered in the classic smartwater bottle with a light-blue label and logo.

“smartwater made its mark by reimagining water –from its iconic packaging and modern graphics, to its witty, ‘we-don’t-take-ourselves-too-seriously’ tone,” said Shannon Richmond, group director, smartwater. “We’ve taken this same formula and translated it to the premium sparkling water space.”

smartwater sparkling includes the same "vapor distillation and electrolytes for a clean, crisp taste" the brand is known for, but with added bubbles. The brand recently introduced 24-packs of 500-ml bottles for club stores and will soon roll out six-packs of the same package at mass retail.

“We’re infusing the smartwater sparkling personality into as many touch points as we can,” Richmond said.

Topo Chico

Topo Chico, the leading sparkling mineral water brand in Texas, joined the Coca‑Cola family in late 2017. Now, the company’s Venturing & Emerging Brands (VEB) unit is working to bring the popular, premium offering to more people across the United States while preserving its storied heritage. Topo Chico will continue to be imported from the same natural source in northern México where it has been bottled exclusively since 1895.

In the first quarter of 2018 –the company’s first full quarter of ownership –Topo Chico’s distribution in convenience stores increased by 25%.

“We’ll continue to protect the prestige of the brand, which is authentic to its heritage and hip without being pretentious,” explains Kellam Mattie, VP of marketing and innovation, VEB. “It’s important for us to maintain the relevance with the core Topo Chico fanbase while introducing the brand to new people.”

Coke’s well-rounded sparkling water portfolio also includes an offering from Hansen’s. The line of unsweetened flavored Hansen’s Sparkling Wateris primarily available in natural food stores where its sister soda brand –Hansen’s Natural –is sold.