Coca-Cola aiming to crack Thai coconut water market
Thailand is the world’s largest exporter of coconuts, but Coca-Cola, the world’s largest soft drink company, said last week it will crack the market for coconut water in Thailand next year by introducing Zico, one of its top-selling beverages in the United States, and use Thai-grown coconuts as its main ingredient.
“The demand for naturally sourced health products among Thai consumers has increased exponentially, and the market value for coconut water worldwide is forecast to [more than double] by 2020,” said Karaked Puribhat, integrated marketing communications manager of Coca-Cola Thailand.
Globally, the coconut water market was valued at $2.2 billion in 2016. Various market research companies have predicted high growth rates, however, over the next few years, with some forecasting annual growth of between 21 percent and 26 percent. According to Beige Market Intelligence, the global packaged coconut water market will surpass $5 billion by 2021, and Arizton, another market research firm, expects it to reach $8.3 billion by 2023.
Coconut water is considered a healthy alternative to soft drinks and sports drinks, which may contain caffeine and sugars, and so are growing in popularity, especially among younger and health-conscious consumers.
As a tropical agricultural powerhouse, Thailand has an abundance of coconuts. A Thai firm named Theppadungporn Coconut Company, or TCC, is the world’s largest exporter of coconut milk and cream, and its Chaokoh brand can be found in supermarkets and in use by Thai restaurants worldwide. TCC has also begun manufacturing coconut water, but at the moment trails global beverage giants such as Coca-Cola, Pepsico and Vita-Coco in the global marketplace.
Vita-Coco is the global market leader and is partially owned by Anheuser-Busch and InBev NV. Pepsi has said, however, that it intends to acquire Vita-Coco.
Zico was founded independently in New York in 2004, and was bought by Coca-Cola in 2013. The Georgia-based food and beverage conglomerate has since then introduced the brand in 10 countries, including in Singapore and Hong Kong in Asia.
In Thailand, with its wealth of coconuts, Zico will have to compete not just with processed coconut water brands, but also with countless street vendors and small shops that sell coconut water straight out of the coconut.
But Karaked believes that many consumers will prefer Zico. “Unlike street-side sellers, Zico offers consistency in taste, hygiene and convenience,” she said.
The fact that Coca-Cola will source all the coconuts used to make Zico from Thailand should also help with brand acceptance in the Kingdom.
Photo Credit: Mike Mozart