PepsiCo tries to increase consumption of coconut water
Valor Econômico
Brazil is one of the few countries in the world where it is a habit to drink coconut water. "Overseas, coconut water is still considered a very exotic drink", says Jorge Tarasuk, VP of Operations for Latin America of the Foods Division of PepsiCo. In August 2009, the American company was the first company worldwide to invest on the beverage, with the purchase of Brazilian Amacoco, owner of the brand Kero Coco, the market leader. Today, one year and five months after the acquisition, PepsiCo reveals its strategy to increase the consumption of the industrialized beverage, still very low compared to its greatest rival: the market of fresh coconut, sold in carts and stands. "There are still very few numbers on the market of coconut water, but it is estimated the fresh coconut, sold on the streets, is responsible for 80% of the volume consumed in the country", says Newton Yorinori, Agricultural Director of the Latin American Food Division of PepsiCo.
Still, the sales of coconut water packaged in Tetra Pak cartons have grown at long strides. "The market grew 18% in volume in 2010 and the performance of PepsiCo was in line with that number", says Tarasuk. The problem is that the amount of regular consumers of the product, despite having grown, is still small. In 2009, according to the Super Hiper specialized magazine, with data from Kantar Worldpanel, 7.8% of the consumers drank industrialized coconut water regularly. Last year, that number grew to 9.8%. Nevertheless, it's still very little compared to the 37% of the soy-based beverages - and that is almost nothing compared to the percentage of soft drinks: 98.3%.
That is exactly the challenge of PepsiCo: increase the number of consumers of the beverage. One of the barriers is the price. In the supermarkets of São Paulo, for instance, one liter of coconut water ranges from R$ 5.50 (US$ 3.20) to R$ 6 (US$ 3.50). On the street, the green coconut is sold for R$ 3 (US$ 1.80), on average. "And that is the same product, even fresher. We do not use any kind of preservative, and between the cutting of the coconut in the farm and its bottling in the plant we do not take more than 18 hours. After such time, the coconut starts to degrade. As regards the coconut sold on the streets, it takes days between being harvested and sold", says Tarasuk.