Coconut water slakes US thirst

28 August 2009

NEW YORK: A major marketing campaign for coconut water is set to launch in the US this autumn as drinks firms look to new markets to recoup losses over dwindling bottled water sales.

Both the California-based Zico and LA-headquartered O.N.E. World Enterprises will ramp up their marketing efforts as the two firms go head-to-head on the latest soft drink craze.

Earlier this month, PepsiCo agreed to buy Brazilian coconut water brands Kero Coco and Trop Coco, but it says it has "no immediate plans" to sell them in the U.S.

O.N.E. plans to spend $1.6 million (£989,000; €1.12) on marketing this year, while Zico, which spends about $1 million annually on marketing, says it will increase its outlay by 50% next year.

Until recently, both companies have relied on sponsorships of niche sports and public sampling events to spread their message.

Already popular in Brazil, coconut water is now catching on in the US following endorsement by celebrities such as Madonna, who regularly drinks the product.

In the 52 weeks to July 12, sales of bottled water dropped 6% to be worth $7.6 billion, according to Chicago-based market-researcher Information Resources.

Sales of coconut water meanwhile doubled to be worth some $20 million, says the research firm Beverage Marketing.

"Although it's a very tiny part of the beverage business, coconut water is growing fast because it's seen as a natural product, it's relatively low in calories and it has a lot of potassium," says John Sicher, editor and publisher of Beverage Digest.

"It is on the brink of becoming significant."

Data sourced from Wall Street Journal; additional content by WARC staff