An August 2014 survey by Canadean of 2,000 UK adults found that – celebrity endorsements from celebrities like Rhianna aside – less than one in 10 bought coconut water in the last 12 months.
78% growth in 2013 also came off a low base – only 3m liters were consumed during the year – and Canadean found that 72% of those who did buy coconut water did so because ‘it is healthy’, compared with only 58% who ‘liked the taste’.
Consequently, Canadean lead analyst Michael Hughes said the emphasis on the category’s nutritional benefits rather than its polarizing taste suggested that manufacturers should focus on promoting products to a small yet loyal consumer base, with 25-34 year olds the most avid drinkers.
Can coconut water cut it in the mainstream?
Hughes suggested that manufacturers position coconut water as a functional beverage and raise awareness of its nutritional benefit among athletes and sportsmen to help grow its consumer base.
The analyst predicts that market growth will slow down in 2014 with coconut water unlikely to become mainstream for many years, if at all.
“Although more could be done via product positioning and advertising (both on- and off-pack) to highlight the functional benefits of coconut water for athletes, it is ultimately the issue of packaging that manufacturers have to first address,” Hughes told BeverageDaily.com.
Athletes were more aware of the functional benefits of ingredients and less concerned by trade-offs between a product’s health profile and taste, he said, but warned it was crucial that brands finesse packaging to reach this market.
Packaging development crucial to target athletes
“It has to be remembered that when an athlete is engaging in strenuous activity the grip of the packaging and ease of opening and consumption is crucial,” Hughes said.
“Vita Coco, for example, has a large open top non-easy grip packaging, meaning that it would prove extremely difficult to consume while engaging in high energy sport,” he added.
Asked about Vita Coco’s stranglehold on around 90% of the coconut water market, Hughes said there was a danger – for other brands, at least – that the brand became the category.
Vita Coco’s celebrity endorsements and packaging positioned it as a healthy, indulgent treat for time-scarce consumers, he said, but rival brands could help grow the market “through fragmentation and clearer and distinct positioning, backed up with investment to raise awareness of coconut water”.
Coke and Pepsi’s investment relatively recent
Could Coke (Zico) and Pepsi (O.N.E) figure in this equation and was Hughes surprised at their lack of impact to date?
“We must remember that Coca-Cola and PepsiCo’s investment in the coconut water market has been recent, and as such, time is needed to raise awareness of the benefits of coconut water and target a larger audience,” the analyst said.
“The brands have certainly invested heavily and will have strategies in place. However, in my opinion, they would benefit from greater diversification and fragmentation, giving brands a different positioning to being a similar product to Vita Coco.”