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Business
28 May 2018

Coca-Cola launches its first alcoholic drink, but will it succeed?

All about Coca-Cola's first alcoholic drink

After announcing its entry into the alcoholic beverage industry, Coca-Cola finally launched its first alcoholic drink in Japan, on Monday.

The drink, dubbed "Lemon-Do", will be available in three variants in Southern Japan's Kyushu region for now.

However, establishing a foothold in the Japanese market won't be easy for Coca-Cola.

Further, it does not have any plans for launching the alcoholic drinks outside Japan.

In context

All about Coca-Cola's first alcoholic drink

Well, there's a first time for everything

Coca-Cola had tried to dabble in the alcoholic drinks business earlier, but had withdrawn. The beverage giant had owned a winery from 1977 to 1983 but, till now, had never directly sold an alcoholic beverage in its history dating back to 1886.

Why Lemon-Do?

Why get into the alcoholic beverage industry suddenly?

Coca-Cola's decision to launch the Lemon-Do range of drinks in Japan stemmed from the popularity of lemon-flavored alcoholic drinks particular to Japan.

Product developers visited the Japanese-style "izakaya" pubs and got inspired when they discovered the extreme popularity of "chuhai" drinks which contain vodka and a grain-based spirit called "shochu".

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What Coca-Cola's latest drink has to offer

Lemon-Do will be available with 3%, 5% and 7% alcohol, and will come in flavors like salty lemon and honey lemon. It will be available for around $1.50, slightly lower than the average market price of $1.80 for similar drinks. Lemon-Do doesn't contain Coca-Cola.

Details

Coca-Cola will face stiff competition from already-established brands

Notably, Coca-Cola's foray into Japan's alcoholic beverage market won't be an easy one.

The Japanese alcoholic beverage market, especially the segment which Coca-Cola is targeting, is already dominated by companies such as Suntory, Kirin, and Asahi.

Coca-Cola's Japan unit further revealed that the launch of Lemon-Do is a "pilot project" indicating that the company was still testing the waters.

The demand for canned alcoholic beverages in Japan

Despite the overall fall in demand for alcoholic drinks in Japan owing to its shrinking population, demand for canned alcoholic beverages has been growing, partly because it's taxed less than beer and is cheaper. Canned alcoholic beverages are also extremely popular among youngsters, especially women.

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