The Coca-Cola Company has developed a product that mixes organic coconut water with organic, cold-pressed juices. The new line, called ZICO COCO-LIXIRS, will be available in stores in mid-April in three flavors — For Lemon's Sake, Unbe-leaf-able and Turn Up the Beet.
Meanwhile, two new flavors of ZICO Chilled Organic — original ZICO Natural and Pineapple Mango — hit the market last month, the Atlanta-based beverage company said. And, in its shelf-stable ZICO lineup, Coca-Cola has added Jalapeño Mango flavor to its flavor choices.
Coca-Cola noted that consumers are 30% more likely to try a category when there's a new flavor being introduced. The company added that, during the past 10 years, coconut water has gone from a niche drink to a popular category expected to be worth $1.5 billion by 2020.
Diversification within a single line is becoming a familiar step for Coca-Cola, which recently introduced four new flavors and a taller, slimmer can for its Diet Coke brand. These innovations are helping move Coca-Cola toward becoming what CEO James Quincey has called a "total beverage company" known for more than its iconic carbonated sugary sodas.
Coca-Cola has seen increasing sales from some of its non-soda products such as ZICO coconut water and Smartwater. In its latest earnings report, the company noted that sales of waters, sports drinks, and tea and coffee all increased during the fourth quarter of last year, while growth in total unit case volume was flat. This reflects the move by consumers away from sugary drinks and toward healthier products.
“Coconut water is being used as a hero ingredient as more people continue to seek out its functional benefits," Tom Larsen, general manager for ZICO, said in a statement. "This enables us to break into new categories and create a ZICO masterbrand synonymous with holistic wellbeing, with offerings for different need states.”
Despite talk that the coconut water craze has peaked, Coca-Cola is exhibiting faith in its staying power in the marketplace. As the company expands its reach, it's increasingly turning to already established brands well-known among consumers — a tactic not uncommon throughout the CPG space — saving the company money and time having to introduce an entirely new brand to the public.
These new trendy flavors also have the ability to attract millennial drinkers who want a healthier, sweeter beverage. For Coca-Cola, shopper interest in these new spinoffs could ultimately spur greater interest in the original ZICO coconut.
Coca-Cola isn't the only company displaying confidence in coconut water. Danone also has recently invested in coconut water products by having its venture capital arm, Danone Manifesto Ventures, join in a $30-million investment in Harmless Harvest. That company is reportedly sourcing coconuts from Thailand and producing fresh, organic coconut water using a process of microfiltration.
By mixing organic coconut water with organic, cold-pressed juices made from greens or beets, Coca-Cola is appealing to a wide-range of consumers who prefer natural products, appreciate fewer ingredients, and like the addition of juice. It also might attract some people who aren't that keen on coconut water's taste, which Coca-Cola acknowledged is an acquired one. While it's uncertain whether these new ZICO products will ultimately succeed, for now they are a low-risk opportunity for Coca-Cola in its push to broaden its reach into healthier beverages for the on-the-go consumer.