Vita Coco Coconut Water records record first year in SA

Giles Brook, CEO of Vita Coco: Europe, Middle East and Africa (EMEA).

Globally, coconut water is the fastest growing sector in all non-alcoholic beverages, it being worth $1.9 billion in measured channels for FY2015 (source: Technavio, 2015). Technavio sees the category size at $4.19 billion by 2019. Vita Coco, with sales of $420 million according to Euromonitor, is helping to lead this category, currently cracking over 2 million coconuts daily to give consumers the refreshment that they are looking for. The brand aims to double its sales figures in the next five years.

Healthy, natural alternatives

According to Giles Brook, CEO of Vita Coco: Europe, Middle East and Africa (EMEA): “The reason for Vita Coco’s success in South Africa is because consumers are looking for healthy, natural alternatives to traditional soft drinks and juices.” He explained: “The South African market lends itself perfectly to the consumption of coconut water, particularly in terms of the climate and the health and fitness lifestyle that is ingrained in the country. With the exceptional sales performance we’ve seen so far, we think South Africa is going to be one of the top global markets for Vita Coco.

“Vita Coco is perfect for consumers who are looking for a little bit more enhanced hydration than water, but don’t necessarily want the calories and sugars found in juices and smoothies. Further, many of our consumers participate in a healthy, active lifestyle and, where they previously used artificial and synthetic sports and energy drinks, are now switching to coconut water because it is naturally isotonic. We want to give consumers access to making healthier beverage choices.”

The brand launched last year with Woolworths SA, and is now stocked in 280 Woolworths stores nationwide. The product is also carried by a number of independent retailers, lifestyle and fitness centres. Woolworths has lauded the launch of Vita Coco to be the biggest success story in terms of new drinks product launches, which Brook credits to the approach taken by the brand: “We pride ourselves on our targetted approach when it comes to new markets, penetrating deep in concentrated areas and ingraining ourselves in the market, rather than having a wide, and potentially scattered, approach. More importantly, having been the brand that has pioneered the packaged coconut water category globally and being the best-selling coconut water globally, Vita Coco’s role is to develop not just the brand but the overall category to its full potential. This is very much reflected by the level of investment Vita Coco puts into new market launches especially around driving educational awareness of the benefits of coconut water to consumers.”

Distribution partnership

Off the back of the local success of the brand, Vita Coco is building a strong brand and marketing team on the ground. Dannon Cook is heading up South Africa for Vita Coco. Dannon has an extensive and successful history within the local beverage industry and has launched a number of premium international beverage brands.

Vita Coco has just announced a game-changing distribution partnership with BOS Brands. This strategic partnership aligns with the brand’s goal, supporting and developing the local plans for Vita Coco in South Africa.

“Last year’s partnership with Woolworths has demonstrated the scale of the opportunity for Vita Coco in South Africa and in 2016 we are going to invest heavily in building the category and brand across South Africa, penetrating all key channels. It is our hope that when people are exposed to the brand, category and its virtues, they will adopt Vita Coco as their natural choice. We see South Africa as a market with huge potential and are very excited about extending our reach and bringing the product to more of the country’s consumers,” explained Brook.

Another factor that may enhance the local success of Vita Coco is the proposed tax on sugar-sweetened beverages. Industry experts anticipate that the sale of juices and smoothies will continue to decline due to the ‘war on sugar’ as well as concerns over conditions such diabetes being linked to heavy sugar content drinks. Other drinks categories, such as carbonates, will also see demand softens as significant tax implications force prices up - unless these companies decide to absorb the taxes and reduce their profits.

Intrinsic and extrinsic sugars

However, he warned that there is danger in the way that sugars are being portrayed with all sugars being deemed as bad. “There is a big difference between intrinsic and extrinsic sugars. Intrinsic sugars, such as those in fruit or coconuts, are naturally occurring and come with nutritional benefits. Extrinsic sugars are those that are added. If we are not careful, we could be telling African consumers - and particularly children - not to consume natural products because of their sugar content. As an industry, we have a responsibility to make sure that consumers can make an informed choice. Regardless of any legislation, the key things for us are making sure that the nutritional qualities and the ingredients of the product are on the label as well as delivering products that are tasty yet as healthy and natural as possible,” shared Brook.

Brook believes that one of the trends that will be emerging is that consumers will be moving away from products that contain additives and artificial ingredients, opting instead for those that are natural. For this reason, they will take more to coconut water, and more specifically Vita Coco.

He said: “We have been cracking nuts and packing coconut water for over 12 years. Unlike the majority of coconut water brands that simply outsource their production, we have been working very closely with our farmers and packing facilities in their respective communities to ensure we have full visibility and control of our supply chain, we have also built up significant technical and quality expertise over this period which allows us to continually monitor and track our products to make sure the information we provide to consumers such as nutritionals and ingredients are as accurate as possible. We also work closely with regulatory bodies in each market to ensure our packaging is compliant with local laws, such as DAFF who we extensively consulted ahead of launching in South Africa last year.”

Vita Coco is currently available at Woolworths stores nationwide, independent retailers, lifestyle and fitness centres. For more information, go to www.vitacoco.com/za or follow @VitaCocoZA on Twitter, Facebook and Instagram.