Dive Brief:
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Vita Coco coconut water is branching out from Tetra Pak containers into a new PET bottle. It will debut its new container exclusively at 7-Eleven convenience stores this week, according to BevNET.
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The brand also plans to introduce a line of sparkling beverages next month that will consist of half coconut water and half sparking water in 12-ounce aluminum cans, the publication reported. The sparkling products will launch exclusively at Kroger and be on shelves in New York City and Los Angeles for about $1.99 each.
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Jane Prior, Vita Coco's executive vice-president of global brand strategy and development, told BevNet that, with the new sparkling lineup, the company is aiming to position itself as "bubbles with benefits" and appeal to those who like traditional coconut water, sparkling water and functional beverages.
Dive Insight:
The new bottled products entering the c-store channel, plus the sparkling lineup coming out next month, are further evidence that the leading U.S. coconut water brand plans to solidify its position and diversify into areas where consumer tastes are trending.
Being in nearly all 7-Eleven stores nationwide will maximize the chance that Vita Coco will be available to consumers looking for a grab-and-go beverage that's healthier than a sugary soda yet more flavorful than a bottle of plain water. The partnership, which is set to last six months, gives Vita Coco time to see how things go and make arrangements for additional retail exposure.
These exclusive limited-time partnerships seem to be growing in popularity, including Hostess and Walmart with the Deep Fried Twinkie and special Oreo cookies, Coca-Cola soda, Regal popcorn and Mott's juice at Dollar General.
Vita Coco is innovating into other products as well. All Market, owner of the brand, recently launched a "lighter" product positioned as an alternative to regular milk, although it does have some dairy in it. The drink contains 10% coconut cream, 60% coconut water and vitamins and stabilizers.
There were rumors last year that PepsiCo might have been interested in buying All Market for less than $1 billion. But since Vita Coco is a leader in the coconut water market — with a reported 26% share valued at $2.5 billion — it might make more sense to elevate its own profile rather than become just another brand within some beverage giant's extensive portfolio.
As consumers look to healthier beverage alternatives, coconut water has been a major beneficiary. According to a Zenith Global report, sales are projected to double from $2.7 billion in 2016 to $5.4 billion by 2020. In a recent forecast of the U.S. coconut water market, Technavio analysts projected a compound annual growth rate of about 25% through 2019, in part because more restaurants are putting it on their menus.
Sparkling water products are popular now as consumers look for something more than bottled water while avoiding the sugar in typical soda drinks. Companies are doing whatever they can to offer an alternative to attract consumers and build brand loyalty. Vita Coco is simply expanding its reach to address this trend with its latest products.
PepsiCo announced its own "bubly" line of sparkling beverages in February, which is a no-calorie drink that comes in eight flavors. About the same time, Nestle rolled out 10 flavors of natural, unsweetened sparkling spring water products packaged in newly designed plastic bottles and cans. And Coca-Cola is debuting its line of ZICO COCO-LIXIRS this month featuring organic coconut water mixed with organic cold-pressed juices.
Sparkling water as a value-add provides some pizzazz without the calories of other carbonated beverages. At the same time, coconut water has a certain cachet of being healthier than drinking sparkling water alone. It appears to be a wise move to combine the two products to create a single item that can capture the consumer's attention with both of these features.
Vita Coco is far from the only brand offering sparkling coconut water. Others include CoCo Libre, Mojo, Kalena and Woobo brands. As the beverage space becomes more competitive, manufacturers need to find ways to stand out.