DECEMBER 17, 2013
In 2013, global demand for coconut water has grown by 168% since 2010, while the number of coconut-products launched in the market has grown by 540% between 2008 and 2012.
Why Has it Become So Popular?
According to the Organic Trade Association, 81% of families in the US purchased organic food during in 2012. The organic food market is currently valued at $65bn and growing at a CAGR of 14% CAGR to 2014.
Over recent years, there has been a significant shift on people’s diets where more concern is given to what is consumed. Modern-day problems of people exercising less, frequently consuming carbonated drinks and fast foods have all contributed to increasing global obesity levels. In the US alone, 27.2% of all adults are considered to be technically obese.
The increased awareness of the dangers of obesity alongside the shift towards healthier food consumption as part of an ever growing ‘health and wellbeing trend’ have resulted in the developing organic market.
A 2013 study by Mintel, a leading market research firm, highlighted the main reasons why people buy coconut water products:
Low/no/reduced fat
47%
Low/no/reduced allergen
43%
Environmentally friendly packaging
42%
Natural product
40%
The Health Benefits of Coconut Water
The growing pace of coconut water in the last five years is the biggest change in the beverage market since the introduction of ‘Innocent’ smoothies in 1999. The primary reason for this is the health properties present in the coconut water, with it being the second purest drink, only behind water.
Coconut water has natural hydrating qualities and great nutritional benefits. It has zero fat content, low cholesterol and low calorie benefits while it is a great source of nutrients, calcium, magnesium and potassium. It possesses the same amount potassium as a banana.
Is There a Promising Future?
Despite major recent improvements in the coconut water market, the industry still has much potential. There is a lack of brands and competition in the sector and hence more companies and products are expected in the future. Vita Coco, the main coconut water brand had a market share of 96% in the US in 2011 and increased sales in the UK by 196% in the same year.
In recent years more companies have started to enter this new market. Coca-Cola acquired Zico Beverages, a manufacturer of pure coconut water, for $15 million in November 2013 to intensify their commitment to the coconut water market after positive returns for the previous three years. Pepsi have also signed a distribution agreement with O.N.E’s coconut water.
There is an encouraging future in terms of the market’s innovative potential and therefore in terms of consumer’s choices:
- Coconut water has a very distinct flavor, which may not always be enjoyed by some. The market still is still lacking different flavors and this may be a possible route. A carbonated version of it may also be created.
- It is believed that truly natural sports hydration brands may start to appear. There have been scientific studies suggesting that coconut water may be more useful than the existing sugary isotonic drinks and hence coconut water can easily became an occasion-oriented product.
- Coconut water can use its advantages and become a premium product replacing bottled water at restaurants and cafés