Tetra Pak invests in Singapore to crack coconut beverage innovation

By Ben Bouckley

- Last updated on GMT

Related tags Coconut water Southeast asia Milk Ultra-high-temperature processing

Picture Copyright: Phu Thinh Co/Flickr
Picture Copyright: Phu Thinh Co/Flickr
Tetra Pak has completed a €42m site expansion in Singapore and opened a ‘coconut knowledge’ center at the site, as it tipped the US as the main driver for impressive global growth in drinks using the fruit.

The latter, located at the site in Western Singapore (Jurong), is a response to the popularity of coconut water in Asia, but Swiss-headquartered Tetra Pak noted that the drink had also found popularity in developed markets as a sports and health drink.

Global coconut water consumption is expected to increase, driven mostly by the US market, the company said, adding that global volume sales had grown by an average of 26% from 2007 to 2011.

Taste, price, legal action...

However, a March 2012 category briefing on coconut water in nearby Canada, produced by Euromonitor International, identified taste, price and litigation alleging deceptive marketing (over product constitution and efficacy) as issues for consumers there.

On the taste point, Svetlana Uduslivaia, senior Canada analyst, wrote: "While product development includes flavored varieties to improve taste, in a way such products undermine the key marketing ploy - 100% natural and pure - and add to sugar, sodium and calorie content." 

The high price of coconut water was also holding the category back, Uduslivaia added.

"Coconut water is significantly more expensive that sports drinks, the category coconut water is often compared to, and even more so when compared to bottled water when positioned as a hydration source,"​ she said.

Nonetheless, Tetra Pak's new center will lend technology and innovation support to clients, build knowledge of coconut products such as water, milk and cream, develop new recipes and expand knowledge sharing.

Asked about future coconut-based product development that could fit Tetra Pak's system, a spokeswoman told BeverageDaily.com: "We respond to customer needs and so far, we have been working on coconut water, milk and cream. However if there is customer interest to develop other local coconut-based products we will also respond to those needs."

Market and technology expertise

Rusty Kekuewa, Tetra Pak vice president, South and Southeast Asia, said: “The Coconut Knowledge Center’s objective is to build market and technology expertise that will extend our leadership in coconut beverage innovation.

“This will be very important for our customers in the region who are growing their local markets and expanding sales abroad, particularly in the US.”

Tetra Pak explained that three of the world’s largest coconut producers were located in Indonesia, India and the Philippines, and accounted for 75%+ of total world production (UN Food and Agriculture Organization figures).

The firm’s Singapore site employs 650 staff and serves 45 markets, with 90% of its output destined for South and Southeast Asian markets.

Expanding capacity

Multinational Tetra Pak said that the €42m ($54.28m) investment includes a new printer that uses the Flexo process (flexographic printing involves use of a flexible relief plate).

The new building will meet its growth needs in Southeast Asia and improve its competitiveness worldwide, the company added.

Tetra Pak said that a further upgrade, to a laminator, would boost production capacity at the site from 15bn to 20bn cartons per year, with demand for its packages set to double from 2012 to 2020.

Both machines began production earlier in 2012, and the additional capacity will allow the plant to produce packages (Tetra Brik Aseptic) with closures requiring pre-laminated holes (Helicap 23, 27).

'Perfect differentiation choice'

Quizzed about end product applications for the carton stock produced in Jurong, the spokeswoman told this site: "Over half of the paperboards produced in Jurong eventually carry ambient white milk and other liquid dairy products (flavored milk, yogurt drinks, etc)."

"The rest would be used as packages for juice, nectars, soya and still drinks – which includes coconut water - and others. While coconut water consumption has been on the rise, it still has much room for growth."

In 2013 the plant will start producing Tetra Prisma Aseptic 330ml and 1000ml packages, and discussing product and trends driving the introduction of these packs, the spokeswoman said: "The Tetra Prisma Aseptic packages immediately separates itself from other packages on the shelves so it is the perfect choice for differentiation. 

"In South and Southeast Asia, where our Singapore plant mainly exports to, the Tetra Prisma Aseptic 1000ml will mainly carry juice and nectar categories,"​ she added. "The 330ml version will mainly carry coconut water, but it will also be used for other juice and nectars."

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