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Coca-Cola to launch alcoholic drink in Japan amid shrinking sales in its core business

It will be a version of the ‘Chu-Hi’ – a canned, sparkling flavoured drink that contains a local spirit called shochu – and may contain 3% to 8% alcohol.

Soft drinks company Coca-Cola on Wednesday said it is all set to launch the first alcoholic drink in its 132-year history, The Guardian reported. The drink, which is likely to be sold only in Japan, will be a version of the “Chu-Hi”, a canned, sparkling flavoured drink that contains a local spirit known as shochu.

The drink has 3% to 8% alcohol content. “We have not experimented in the low-alcohol category before, but it is an example of how we continue to explore opportunities outside our core areas,” said Jorge Garduno, the company’s President in Japan.

Coca-Cola’s decision, which a senior unidentified executive at the company told Financial Times was unique in its history, would bring the company into direct competition with Japanese brands such as Strong Zero, Highball Lemon and Slat.

The Japanese market has hundreds of flavours of Chu-Hi and its sale has fluctuated between 5% and 25% since 2013, according to the Japanese drinks group Suntory. The total Japanese market for shochu, the vodka-like spirit that provides Chu-Hi with its kick, has expanded almost 40% since 2011, Financial Times reported.

Coca-Cola’s decision comes in the backdrop of shrinking sales in its core business of non-alcoholic drinks. The company has been investing in producing water and tea since a younger generation of consumers is moving away from fizzy drinks because of their high sugar content. In the United Kingdom, the company is set to launch three new drinks in 2018 – an ice-tea drink called Fuzetea, a ready-to-drink cold coffee called Honest Coffee and the dairy-free smoothies brand AdeZ.

“This is a departure for Coca-Cola, but I think this reflects the way that changing consumer tastes are pushing the company into less familiar areas like premium dairy, coffee, tea and now low-alcohol flavoured drinks,” Howard Telford, the head of soft drinks at market research firm Euromonitor International, told The Guardian. “While I do not think this represents a global shift in company strategy, I do think we can expect Coca-Cola and its competitors to continue looking for new opportunities.”

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