Coca-Cola, a global beverage giant, has announced a significant reduction in the distribution of its Aha Sparkling Water products within the United States, with a focus on a select few channels. The decision to restrict availability of Aha Sparkling Water in the U.S. is part of the company’s strategy to realign its product portfolio according to evolving consumer preferences.
However, it’s worth noting that Aha will continue to be available in Canada. This move comes as the company shifts its focus towards the sparkling water market’s potential growth, particularly with its premium brand, Topo Chico.
Aha Sparkling Water was initially launched by Coca-Cola in March 2020 to compete with established brands like LaCroix and PepsiCo’s Bubly. It marked the company’s first major brand introduction in over a decade. Regrettably, Aha has faced declining sales since the first quarter of 2023, as indicated by data from Beverage Digest.
This decision to phase out Aha underscores the challenges of establishing a new brand in a fiercely competitive market, even for a corporate giant like Coca-Cola, renowned for its dominance in the beverage industry.
The beverage market Is saturated with various sparkling water brands, including Polar, Spindrift, and Waterloo. Aha was introduced after Coca-Cola’s previous offering, Dasani Sparkling, failed to gain traction and was discontinued in 2019.
When Aha was launched, Coca-Cola unveiled eight different flavors, including two with caffeine. The company invested heavily in marketing Aha throughout 2021 and 2022. As of early this year, Aha was available in six flavors, such as Lime + Watermelon and Blueberry + Passionfruit.
Aha faced a sharp sales decline this year after discontinuing its caffeinated options and being removed from the shelves of grocery chain Publix. According to Beverage Digest, Aha experienced a 42% drop in sales during the first quarter of 2023.
LaCroix continues to dominate the sparkling water market, holding 14% of category sales during the first quarter. Rival brand Bubly, introduced by PepsiCo in 2017, claimed 7.5% of the market, while Aha held a modest 1.9% of sales in the same space, according to Beverage Digest.
Coca-Cola’s optimism lies in the premium brand, Topo Chico, which it acquired for $220 million in 2017. The company sees potential for Topo Chico in a market where premium beverage products are gaining momentum. In the past year, Coca-Cola partnered with alcohol giant Molson Coors to launch Topo Chico Hard Seltzer.
Additionally, in April, Coca-Cola introduced Topo Chico Sabores, a premium sparkling water infused with fruit juice and herbal extracts, available in three enticing flavors.
While Coca-Cola refrains from specifying a timeline, Dan White, the company’s Chief of New Revenue Streams, envisions that the Mexican sparkling water brand is on the path to reaching $1 billion in annual sales. This strategic shift reflects Coca-Cola’s adaptability in an ever-changing beverage landscape.