Coconut water: the fix for fizzling soda sales?

Top soft drink makers Coca-Cola, PepsiCo, and Dr Pepper Snapple are tapping coconut water, a natural drink touted as chock full of health benefits and one of the fastest growing categories in the US beverage market. For some perspective, coconut water accounts for a $400 million-and-growing fraction of the $100 billion nonalcoholic beverage industry.

Dr Pepper Snapple tied the distribution knot in 2010 with Vita Coco, the #1-selling US coconut water. Vita Coco recently reached $100 million in sales, more than double over its start in 2004.

Also in 2010 PepsiCo took control of the #3 coconut water brand O.N.E. PepsiCo also introduced a coconut water Naked Juice brand, now #4 in category sales.

Coca-Cola, however, led the wave in 2009 by purchasing a minority interest in the #2 coconut water brand Zico. As Zico has grown ahead of projections, there is talk that the #1 soft drink maker may soon try to acquire a majority stake. Today, Coca-Cola is expanding distribution of Zico in Europe, according to a recent Just Drinks article.

Over the last decade, Americans’ increasing focus on health has led to a decline in soft drink consumption. Coca-Cola US soda sales by volume have dwindled 12% from 2001. A 24/7 Wall Street article cites a 14% slide in PepsiCo soda sales by volume in the last 10 years. Sales by volume of Dr Pepper Snapple’s 7-Up brand tumbled 53% in the same period.

But despite these sales declines, consumers still drink carbonated soft drinks more than any other beverage in the US, according to Beverage Marketing Corp. This suggests that although coconut water isn’t likely to overthrow soft drinks in the nonalcoholic beverage market, soft drink makers continue to see the value in investing in healthier alternatives.

Sylvia Lambert

Sylvia Lambert covers a slew of industries. She has been a writer and editor at Hoover's since 2009. Her former published work includes Herbs: Growing & Using the Plants of Romance, a 1999 Benjamin Franklin Award winner for agriculture and gardening, and Along the Garden Path.

Read more articles by Sylvia Lambert.

Comments

  1. If the soft drink industry ddnepeed on people like me for a profit they go bankrupt in a hurry. I drink maybe a half dozen diet Pepsis a year and that is because that is what sweetthing likes..I prefer the diet Dr Pepper if I am gonna buy it for my self.My primary drink other than coffee is my cold clear sweet well water. We keep a couple of bottles in the frige all the time and sometimes I will just get a glass out of the kitchen sink facet.When I go damn near anyplace I take my small cooler with some ice and a couple of quarts of well water with me. I am too tight to pay bottled water in the stores and mine is better anyway.

  2. Good information. It’s about time that bililon dollar food industries take on the challenge and responsibility of providing healthier options, especially for children who haven’t yet learned the difference between what is good for them versus what tastes good. Now, if only more parents would step up to the plate (pun intended)!

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