Coke follows Pepsi into coconut water

By Guy Montague-Jones

- Last updated on GMT

Related tags: Coconut water, Drink, Coffee, Alcoholic beverage, Coca-cola

Coke follows Pepsi into coconut water
Coca-Cola has invested in coconut water company Zico only a couple of weeks after Pepsi-Co acquired Amacoco, a Brazilian maker of coconut drinks.

Coconut water, which contains calcium, magnesium and potassium, is an increasingly popular drink in the US although it has yet to make a major dent in the European market.

Now Coca-Cola is planning to help build up the market for coconut water in the US, having taken a minority stake in Zico Beverages.

The head of Venturing and Emerging Brands (VEB) at Coco-Cola, Deryck van Rensburg, said Coca-Cola would use its brand building expertise to expand the reach of the coconut water specialists.

Natural sports drink

Founded in 2004, California-based Zico Beverages markets its Zico Pure Premium Coconut Water as “nature’s sports drink”​ and sells the product through grocery and natural food stores as well as gyms, yoga studios and the web.

It has grown rapidly in the past few years and has just attracted investment of $15m from Coca-Cola, and others including Jesse Itzler, principal of Suite 850 and co-founder of Marquis Jet.

With the extra financial resources behind it, Zico hopes to fund its expansion plans. “We plan to introduce the Zico brand and its natural health benefits to a much larger mainstream audience,”​ said Zico founder and CEO Mark Rampolla.

Natural edge

Gary Roethenbaugh, market intelligence director of Zenith International, said the Zico brand has the potential to grow further because it taps into an underlying move towards natural hydration.

He told Beverage Daily that the Zico coconut water falls into the category of what may be called “new age beverages”​, but is especially interesting because it is perceived as a natural sports drinks.

Being a sports drink with a natural tag could set the Zico product apart from other beverages that are designed to rehydrate and replenish.

Roethenbaugh said coconut water has so far only made major inroads in the US where the thriving health and convenience food channel is a good incubator for innovative drinks. The beverage analyst said that in Europe coconut water has made a small dent in the UK and Germany but has yet to make an impression elsewhere.

Related topics: Carlsberg, Soft Drinks & Water, PepsiCo

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