Coconut Water 2010 Brochure

Published March 2010

Coconut water

www.new-nutrition.com13

Reiss looked into the science and the market and saw that coconut water had potential: “The beverage market trend was to healthy beverages in 2002, just as today, and here was something natural with natural health benefits, that are recommended by the United Nations. And it fit the needs of European consumers.”3.1 Proprietary processReiss and Dr. Martins were joined by Steffen Borzer, a specialist in communications and in the organics business, and the three were the founding shareholders of the business.“We had a white sheet of paper with an idea…to make coconut water. At that time we had two possibilities,” explained Reiss. “We could buy it ready-packed from Amacoco in Brazil – but this company was focused primarily on selling coconut pulp and

they used water from mature coconuts as these have more pulp. But the science says only young green coconuts have the water with the health benefits. Or we could source coconuts ourselves, extract the water and pack it in Europe.“We had also decided,” he added, “to make the product organic from the beginning. It provides a USP and for European consumers it is also a quality aspect.”To achieve their aims they would need to work with Brazilian coconut farms to gain organic certification. But in Brazil there was already a huge domestic demand for coconuts, meaning that there was no incentive for farmers to supply organic product because they could easily sell their coconuts in Brazil, whether they were organic or not.

It also became clear that packing the product in Brazil wasn’t going to work, since production

Coconut fruit pulp

Coconut juice

Coconut pulp

Green coconut and mature coconut are very different. Only green coconuts that are 6 months old or

younger produce the coconut water that has been defined by the UN as providing health benefits. Each

young green coconut contains about 400ml of water. In Brazil many coconut water products are made

from coconuts aged up to 9 months, which have lower nutritional value.

Green coconuts

Matured coconuts

Coconut water

www.new-nutrition.com

TABLE 1: TROP COCO NUTRIONAL FACTS AND INGREDIENTS

9

CHART 2: COCONUT WATER PRICE COMPARISONS IN USPricing shown on a price per litre equivalent basis. The market leader, Vita Coco, is able to achieve a very signifi cant premium over established formulated brands by retailing in 330ml packs – said to be its biggest seller. Even in a 1-litre it is still at a healthy 100% premium over formulated products. Coconut waters sell at a discount to juices – such as cranberry – in 1-litre packs but a premium in single-serve packs.

Priceper litre

equivalent($)

Source: Information supplied by Vita Coco, Zico and ONE and from store visits

0

$5.42

330ml$1.79 per pack

Vita Coco

.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

$3.58

500ml$2.59 per pack

Vita Coco

$1.79

1 litre$4.99 per pack

Vita Coco

$4.42

330ml$1.46 per pack

Zico

$5.16

250ml$1.29 per pack

ONE

$1.69


Gatorade Endurance

$1.89


Powerade

$2.50

2 litres$4.99 per pack

Ocean Spray Cranergy

cranberry juice

Coconut water


aseptic TetraPak have made it technologically

feasible to package and distribute fresh coconut

water.In 1999 it appeared on the Brazilian market,

and by 2002 had become the second-most

highly consumed beverage in the country,

after orange juice. Nowadays, it has become so

common across Brazil that some McDonalds

serve a private-label brand of coconut water.

While packaged coconut water is relatively

new in Brazil, the idea of consuming coconut

water is not. Roadside stalls selling green

coconuts with a hole cut in them and a

drinking straw inserted are a very common

feature across the country.

2.1 Natural health benefits

Coconut water has a number of benefits:

1. It’s an all-natural product with natural

sweetness. Most brands add nothing to

their product.

2. It is the fruit juice with lowest calorie

content – 19-24cal per 100ml, compared

to 48 calories for orange juice.

3. It is isotonic, with a similar mineral balance

to the water in your body, and from a plant,

a natural isotonic liquid, nothing added.

4. It is proven to be hypo-allergenic – an

increasingly important point of difference

in a market in which sales of foods “free-

from” significant allergens are on the

increase and “free from the eight major

allergens” is also gaining ground as a

selling message. Some food companies

even avoid the use of regular foods such as

celery or kiwifruit in their products because

of concerns about allergens.

5. Naturally fat-free, gluten-free, cholesterol-

free, preservative-free, free-from

sweeteners.

6. High content of vitamin C (around 200ml

will supply 90% of your RDA).

7. The product is very mild and does not have

a lot of acidity.

It is important to note that these benefits only

attach to the fluid found within young green

coconuts – those aged six to nine months. Not

While packaged coconut water is relatively new in Brazil, the idea of consuming coconut water is not. Roadside stalls selling green

coconuts with a hole cut in them and a drinking straw inserted are a very common feature across the country.

Published by Report

Coconut water:

innovation and natural

health benefits drive a

new category

Coconut water: innovation and natural health benefits drive a new category

Contents

1. executive summary

2. What is coconut water?


2.2 A benefit people can feel

2.3 Coconut water taps into demand for a natural sports drink

2.4 Coconut water satisfies the rules for marketing natural health

2.5 A premium priced business

2.6 The future for coconut water: the next Superfood?

3. German technology re-defines european market

3.1 Proprietary process

3.2 Control of supply

3.3 Sustainable production key to cost and corporate values

3.4 Products

3.5 Debut in Germany

3.6 Distribution

3.7 Consumers

3.8 Communications and health claims

4. Coconut water in the Us

4.1 A new point of difference in the US sports drink market

4.2 The US coconut water brands

Case study 1: Vita Coco

Case study 2: Zico

Case study 3: o.n.e.

Companies and brands

Companies and brands in tHis report

All Market

Amacoco Sudeste

Coca-Cola

Dr Antonio Martins

Gatorade

Green Coco

Kero Coco

McDonalds

O.N.E

O.N.E. World Enterprises

PepsiCo

Powerade

Trop Coco

Vita Coco

Zico

Continents/CoUntries in tHis report

europe

Germany

Austria

Switzerland

north america

USA

Mexico

south america

Brazil

Chart 1: Coconut water price comparisons in Europe

Chart 2: Coconut water price comparisons in US

Chart 3: Gatorade sales slide

Table 1: Trop coco nutritional facts and ingredients

Table 2: Nutritional properties of coconut water

Table 3: Green Coco juice ingredients and nutrition facts

Table 4: �ngredients �� nutrition facts of traditional �� all-natural sports drinks compared 4: �ngredients �� nutrition facts of traditional �� all-natural sports drinks compared

CHarts and tabLes

aboUt tHis report

Every so often we witness the emergence of a new category – a product that is new to consumers, provides new benefits and is marketed under new brands. Twenty years ago the new category was Red Bull and energy drinks; more recently, probiotic dairy.

Today, coconut water is the fast-growing new category, with retail sales already above $450 million (€327.5 million), thanks to its strong isotonic, hypo-allergenic and all-natural health benefits.

Using new processing technologies and new brands, start-up companies in Germany, the US and elsewhere are growing coconut water sales quickly and commanding premium prices. Coca-Cola, PepsiCo, Europe’s biggest brewing families and even Madonna have invested in the sector.

Coconut water has a host of advantages guaranteed to appeal to health-conscious consumers:• �t’s a natural beverage that needs no additions, not even a sweetener• �t’s hypo-allergenic, a key benefit in a world in which consumers are becoming more concerned about avoiding

one or more of the eight major allergens• �t’s a natural isotonic drink, according to the United Nations, which has described it as “the fluid of life”,

providing many of the same benefits as formulated sports drinks, but in an all-natural form

Coconut water is set to redefine the sports drink market, giving consumers the choice of an “all-natural” isotonic drink for the first time ever.

This concise report provides our trademark detailed, independent and opinionated analysis, using supermarket sales data and interviews with executives at all of the companies concerned, as well as independent beverage industry experts. This unique report addresses:

• packaging • ingredients and nutrition profiles• supply strategies• marketing communications strategy• pricing strategies • target consumers • flavours

For any company, large or small, aiming to create a successful proposition in functional or health-enhancing beverages and better-manage the risks of new product development and innovation, this report provides practical insights and examples.

ABout uS

This report draws on material published in our journal New Nutrition Business, which provides case studiesand analysis of success and failure in the global nutrition business. It is used by more than 1,700 corporatesubscribers in 42 countries.

Since 1995 we have been researching, analysing and forecasting the global nutrition business, and we provideexpert consultancy to companies and government organisations around the world.

Many companies make New Nutrition Business available online to all of their research, product developmentand marketing staff. Our website – www.new-nutrition.com – contains the largest searchable internet database ofinformation about the business of food and health.

We have a small staff – all with experience in nutrition or in food and beverage marketing – but a globalperspective, with offices in London and New Zealand and affiliates in Japan and Finland.

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Coconut water


Reiss looked into the science and the market and saw that coconut water had potential: “The beverage market trend was to healthy beverages in 2002, just as today, and here was something natural with natural health benefits, that are recommended by the United Nations. And it fit the needs of European consumers.”3.1 Proprietary processReiss and Dr. Martins were joined by Steffen Borzer, a specialist in communications and in the organics business, and the three were the founding shareholders of the business.“We had a white sheet of paper with an idea…to make coconut water. At that time we had two possibilities,” explained Reiss. “We could buy it ready-packed from Amacoco in Brazil – but this company was focused primarily on selling coconut pulp and

they used water from mature coconuts as these have more pulp. But the science says only young green coconuts have the water with the health benefits. Or we could source coconuts ourselves, extract the water and pack it in Europe.“We had also decided,” he added, “to make the product organic from the beginning. It provides a USP and for European consumers it is also a quality aspect.”To achieve their aims they would need to work with Brazilian coconut farms to gain organic certification. But in Brazil there was already a huge domestic demand for coconuts, meaning that there was no incentive for farmers to supply organic product because they could easily sell their coconuts in Brazil, whether they were organic or not.

It also became clear that packing the product in Brazil wasn’t going to work, since production

Coconut fruit pulp

Coconut juice

Coconut pulp

Green coconut and mature coconut are very different. Only green coconuts that are 6 months old or

younger produce the coconut water that has been defined by the UN as providing health benefits. Each

young green coconut contains about 400ml of water. In Brazil many coconut water products are made

from coconuts aged up to 9 months, which have lower nutritional value.

Green coconuts

Matured coconuts

Coconut water


TABLE 1: TROP COCO NUTRIONAL FACTS AND INGREDIENTS

9

CHART 2: COCONUT WATER PRICE COMPARISONS IN USPricing shown on a price per litre equivalent basis. The market leader, Vita Coco, is able to achieve a very signifi cant premium over established formulated brands by retailing in 330ml packs – said to be its biggest seller. Even in a 1-litre it is still at a healthy 100% premium over formulated products. Coconut waters sell at a discount to juices – such as cranberry – in 1-litre packs but a premium in single-serve packs.

Priceper litre

equivalent($)

Source: Information supplied by Vita Coco, Zico and ONE and from store visits

0

$5.42

330ml$1.79 per pack

Vita Coco

.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

$3.58

500ml$2.59 per pack

Vita Coco

$1.79


Vita Coco

$4.42

330ml$1.46 per pack

Zico

$5.16

250ml$1.29 per pack

ONE

$1.69


Gatorade Endurance

$1.89


Powerade

$2.50

2 litres$4.99 per pack

Ocean Spray Cranergy

cranberry juice

Coconut water


aseptic TetraPak have made it technologically

feasible to package and distribute fresh coconut

water.In 1999 it appeared on the Brazilian market,

and by 2002 had become the second-most

highly consumed beverage in the country,

after orange juice. Nowadays, it has become so

common across Brazil that some McDonalds

serve a private-label brand of coconut water.

While packaged coconut water is relatively

new in Brazil, the idea of consuming coconut

water is not. Roadside stalls selling green

coconuts with a hole cut in them and a

drinking straw inserted are a very common

feature across the country.


Coconut water has a number of benefits:

1. It’s an all-natural product with natural

sweetness. Most brands add nothing to

their product.

2. It is the fruit juice with lowest calorie

content – 19-24cal per 100ml, compared

to 48 calories for orange juice.

3. It is isotonic, with a similar mineral balance

to the water in your body, and from a plant,

a natural isotonic liquid, nothing added.

4. It is proven to be hypo-allergenic – an

increasingly important point of difference

in a market in which sales of foods “free-

from” significant allergens are on the

increase and “free from the eight major

allergens” is also gaining ground as a

selling message. Some food companies

even avoid the use of regular foods such as

celery or kiwifruit in their products because

of concerns about allergens.

5. Naturally fat-free, gluten-free, cholesterol-

free, preservative-free, free-from

sweeteners.

6. High content of vitamin C (around 200ml

will supply 90% of your RDA).

7. The product is very mild and does not have

a lot of acidity.

It is important to note that these benefits only

attach to the fluid found within young green

coconuts – those aged six to nine months. Not

While packaged coconut water is relatively new in Brazil, the idea of consuming coconut water is not. Roadside stalls selling green

coconuts with a hole cut in them and a drinking straw inserted are a very common feature across the country.

Published by Report

Coconut water:

innovation and natural

health benefits drive a

new category

NEW NUTRITION BUSINESS

Recent investments by PepsiCo and Coca-Cola in

coconut water businesses in the US and Brazil

have grabbed the headlines. But it’s in Europe where one of the most exciting

developments in the new coconut water category is

emerging.

A German company, with its own controlled

supply of coconuts and a patented production

process that gives it cost and quality advantages,

has been quietly building its brand presence there.

Green Coco Europe may already be the second-

biggest coconut water brand in the northern

hemisphere, after Vita Coco, even before it

expands its distribution to include supermarkets as

well as health food stores.

38

Innovation

NEW NUTRITION BUSINESS

Chart 1: Coconut water price comparisons in Europe

Pricing shown on a price per litre equivalent basis. Green Coco is positioned at a significant (100%) premium

over established formulated products. Coconut water is also at a premium over fruit juice drinks – such as

those from Eckes Granini, one of Germany’s biggest brands – and even a premium water such as Fiji Water.

30

NEW NUTRITION BUSINESSReport

Coconut water: innovation

and natural health benefits

drive a new category

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