Madonna, Rihanna and Matthew McConaughey drink it by the gallon and like it so much they bought a stake in it. Now coconut water has become the UK’s fastest-growing soft drink.
Annual sales have broken the £100mn mark for the first time – and are forecast to quadruple over the next five years.
In sheer volume terms fizzy drinks such as Coke still reign supreme, but coconut water (which really is 95% water) has been boosted by its purported benefits – from hangover cure to weight loss aid – and British consumers are lapping it up.
“We thought it would be a fad. But it’s taken off like crazy,” says Hope Lee, drinks analyst at Euromonitor, the research firm behind the new data.
Around 10bn coconuts are now harvested for drinking every year, and the UK is now the third biggest market – after the US and Brazil. Per head, London has even overtaken New York and Los Angeles as the biggest consumer in the world.
The brand leading the way is Vita Coco, which is responsible for cracking open 1.5mn coconuts every day. It now has nearly half the UK market and nearly a quarter of the fast-growing global market.
The idea for the brand came about 13 years ago, when founders Michael Kirban and Ira Liran started talking to two Brazilian women in a New York bar. Liran asked what they missed most about Brazil. “Agua de Coco,” they replied.
“It sounds like a joke. You know, two men go into a bar, meet two women and the idea for a multimillion-dollar beverage company is born. But that’s pretty much how it happened,” says Arthur Gallego, one of Vita Coco’s directors.
Having Madonna as a fan, and then as an investor – along with Demi Moore, McConaughey and Rihanna – has certainly helped fuel the drink’s meteoric rise.
Now PepsiCo is rumoured to be interested in acquiring the brand, which could be valued at up to $1bn (£757mn). Vita Coco declined to comment.
Coca-Cola is in on the act too, having acquired the UK’s Innocent drinks brand which developed its own coconut water, now currently No 2 in the UK.
Numerous smaller players abound. C7 Brands has developed a carbonated version sold in slim “Red Bull”-style cans, while Cocofina says demand in Britain was so high this summer that it ran out of stock.
“It was a bit of a nightmare for us, I mean we totally underestimated demand – it was such a hot summer,” says Jacob Thundil, Cocofina’s director.
The market is developing so fast that Steve Barton, CEO of C7 Brands, believes consumers will soon start handpicking the coconut water they want from a specific geographical region, much in the same way they choose their wine.
“Coconuts from different countries have different taste profiles. The closer you are to the equator, the sweeter tasting the coconut waters,” he says, adding that their’s hails from the appropriately named Coconut Island, just north of the Mekong delta in Vietnam.
The pricier coconut water brands – including market leaders Vita Coco and Innocent – get their juice straight from the coconut – with some element of pasteurisation followed by a dash of sugar for taste. Cheaper brands are made from concentrate.
Gallego says Vita Coco’s mission has now gone beyond coconut water. They launched a coconut milk this year, as an alternative to traditional milk, and sales of its coconut oil are growing fast. “We want to be all things coconut,” he says.
Mintel’s global drinks analyst, Alex Beckett, says Vita Coco has become “masters of the spin”. “They’ve given coconut water this really precious, powerful health aura – it’s been brilliantly pitched and marketed. The thing is, people are willing to spend a couple of quid on something if they think they’re going get that quick fix,” he says.
Beckett says the hunt is now on for the next coconut water: “You’ve got all sorts of start-ups in America buying up prickly pear farms, coffee fruit pastures, I mean everyone’s desperate to find what this next coconut water will be. Cactus water, maple water, Birch water – there’s even a new Spanish juice drink that actually contains 8% seawater.”
Sussex-based natural food wholesaler, Infinity Foods, stocks some of these new drinks but so far none of them are gaining the traction of coconut water, says sales and marketing manager Charlie Booth.
“Everybody is looking for the next big thing – but we sell virtually nothing when you compare it with the coconut waters – now there’s a product that’s completely arrived,” he says. – Guardian News and Media
