By now, you’ve probably noticed that Vita Coco, Zico and O.N.E. are on the shelves of grocery and health food stores across the U.S. Coconut water has taken on the status of a “super-hydrating” miracle drink, and the major brands have celebrities like Rihanna, Katy Perry and Madonna promoting coconut water.
In only 5 years this beverage has turned into a Multi Million Dollar product for its producers, lets take a look into the coconut water trend, as popularity grows this here may be a beverage to invest in.
For thousands of years, farmers, hunters, warriors and general laborers of the tropics have known of the coconut’s hydration abilities:
Coconut juice contains the electrolytes — potassium, magnesium, sodium, calcium, and phosphorous — needed for proper hydration.
The juice has also been used for medical purposes: doctors in the tropics used coconut water as IV fluid when saline wasn’t available.
A few centuries later, Vita Coco’s founders got the idea for coconut water after meeting two Brazilian women in a Manhattan bar
Vita Coco founders Ira Liran and Michael Kirban asked the women what they missed about home, the Brazilians replied “coconut water.”
That was in February 2003. When Kirban went to visit his now-wife in Brazil a few months later, he did some research on coconut water.
Vita Coco officially launched in 2004 and is one of the most dominant market players, with products in 17,000 stores nationally.
Vita Coco chose New York’s immigrant-heavy population as the drink’s entry point
Liran and Kirban visited Brazil several times to map out their strategy to bring Vita Coco to New York.
They also capitalized on the growing interest in “functional beverages” — drinks that do something positive for you.
Zico, and later O.N.E., emerged as the two biggest competitors to Vita Coco, and now all three help each other while they jockey for market share
The three brands have all created a demand for coconut water.
O.N.E. founder Rodrigo Velso grew up drinking coconut water in Brazil and launched his product via Whole Foods in 2006. Zico founder Mark Rampolla got hooked on coconut juice while serving in the Peace Corps in Central America. He brought his product to market in 2004.
And the trend is still catching on: Naked came out with its own version of coconut water in 2010.
Coconut water makers say it’s better for you than energy drinks
This makes coconut water a “more natural” alternative to sports drinks, energy drinks, and sodas.
Another key selling point for the product is that it keeps you young
Coconut water is expensive: it’s $2 per bottle. Manufacturers justify the cost by claiming that the electrolytes and vitamins found in coconut water improve circulation, slow the ageing process, fight viruses, boost immunity and reduce the risk of stroke, heart disease and cancer.
It only took five years for coconut water to establish itself as a multi-million-dollar industry
A Merill Lynch analysis in 2009 showed that coconut water went from virtually zero sales in 2004 to $30 to $35 million annually in five years.
The coconut water trend is part of a broader movement toward “naturally healthy” products — which is why Pepsi and Coca Cola bought stakes in O.N.E. and Zico
In 2010, PepsiCo bought out a majority stake in O.N.E., the Brazilian-based company, while Coca-Cola took a stake in Zico, based in California. These investments will helped coconut water move from warehouse distribution to direct store delivery, a huge step in becoming a major player in the U.S. beverage market.
Celebrities like Rihanna have promoted or invested in the major coconut water brands
The list of celebrity spokesmen, investors or simply public drinkers is a long one: Madonna, Matthew McConaughey, and Demi Moore are Vita Coco investors, Rihanna is a Vita Coco spokesperson, Molly Sims works for Zico and celebrities like Kim Kardashian, Anne Hathaway, Nicole Scherzinger, Nick Cannon and Brooke Shields have all been seen with a coconut water drink around town.
Although recently, fitness experts have started backing away from the product
Despite its popularity, fitness experts and enthusiasts are realizing that the most important element in a sports drink — protein — is noticeably absent from coconut water, which only has a couple grams per serving when 15 to 17 grams would be optimal. A sufficient amount of sodium is also lacking.
In fact, Vita Coco and O.N.E. are now under fire for lying about the nutritional value of their product
According to Thomson Reuters:
“The lawsuits, brought by Kevin Shenkman on behalf of coconut water consumers, were spurred by a new study by ConsumerLab.com that tested the contents of three brands of coconut water: Vita Coco, O.N.E. and Zico. Only one of the drinks, Zico, delivered on its nutritional claims in the study. The other two had “far fewer” electrolytes than claimed, according to the report issued last week, with considerably less sodium and magnesium than the amounts listed on their nutrition labels.”
While coconut water may not be a miracle drink, it still fills grocery shelves nationwide
But with continued aggressive branding and investment by big-name companies, expect coconut water to gain global market share in the coming years.