Topo Chico is a Mexican mineral water brand.
Photo by Giovanni Gallucci

ATLANTA — Coca-Cola Co., through its Venturing and Emerging Brands (VEB) business unit, has acquired Topo Chico, a Mexican mineral water brand, from Arca Continental, S.A.B. de C.V., for $220 million. The move is expected to allow the brand to expand and strengthen its national presence.

In an Oct. 2 post to the company’s web site, Matt Hughes, vice-president of emerging brands, incubation, VEB, said Coca-Cola is investing in brands that are on trend as it accelerates its evolution to a “total beverage company.”

Matt Hughes, vice-president of emerging brands, incubation, VEB

“Topo Chico is a fast-growing brand with a lot of passion behind it and growth runway ahead,” Mr. Hughes said. “The premium, imported sparkling water category is growing double-digits, and Topo Chico has proven itself in a significant market — Texas — where it’s leading the category. It’s currently sold in Northern Mexico and in 35 states across the U.S., with approximately 70% of its U.S. sales coming from Texas. Our goal now is to extend its reach while preserving its heritage.”

Mr. Hughes said Topo Chico has a major presence in restaurants and bars in Texas and regional areas of the United States, and is a sought-after drink mixer due to its high carbonation and unique minerals. The brand also has a strong Hispanic consumer base and has garnered attention from the millennial demographic.

He said Topo Chico will complement Coca-Cola’s other bottled water brands in North America.

Topo Chico has a strong Hispanic consumer base.
Photo by Giovanni Gallucci

“It’s a zero-sugar, zero-calorie, sparkling mineral water brand that fits nicely alongside our evolving portfolio in North America,” Mr. Hughes said. “It’s more of a lifestyle brand than a hydration brand. From a portfolio perspective, Topo Chico is additive; we see it as incremental based on its very unique proposition and taste, which comes from its natural source. This is important as we look to drive growth in part by building and buying brands in adjacent categories.”

Francisco Garza Egloff, chief executive officer of Arca Continental, said the company will continue to bottle Topo Chico mineral water at the original plant in Monterrey, Mexico, where it has been produced for more than 120 years, reinforcing the alliance between the two companies.

“It is highly satisfying for us to continue expanding the legacy and authenticity of Topo Chico mineral water on an international scale through this agreement, which will further enhance its presence in the U.S., adding tremendous value to the country’s product portfolio,” said Manuel L. Barragan Morales, chairman of the board of directors of Arca Continental.