Coca-Cola aims to sate market with Zico

Coca-Cola aims to sate market with Zico

Mrs Karaked and colleagues announce the launch of 'Zico' at Makro Sathorn.
Mrs Karaked and colleagues announce the launch of 'Zico' at Makro Sathorn.

Coca-Cola is looking to coconut water as it shifts to non-carbonated beverages to cash in on health-conscious consumers.

Coca-Cola has jumped into the burgeoning Thai coconut water market by introducing Zico. The beverage, a top seller in the US, will initially be available in all Makro stores, said Karaked Puribhat, integrated marketing communications manager of Coca-Cola Thailand.

The company touts the beverage as a low-calorie, no-sugar alternative to its carbonated drinks. The move is expected to help it penetrate the natural health drink market and reach out to younger consumers.

Zico will be sourced from young green coconuts in Thailand. It will be available in two bottle sizes: 250 millilitres (30 baht) and 1 litre (95 baht).

"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 Mrs Karaked.

Zico is available in 10 countries, including the US, Britain, France, Germany, Canada, Hong Kong and Singapore, she said.

"What differentiates our beverage from our competitors is that it is 100% natural premium-grade coconut water with no sugar added," said Mrs Karaked.

Coca-Cola expects this segment globally to grow from 700 billion baht today to 1.5 trillion in 2020. The company expects the same growth pattern for the category in Thailand.

Mark Rampolla, Zico's founder, began selling coconut water in 2004, first in New York, and then throughout the US.

In 2013, the brand was acquired by Coca-Cola, which has launched the product in 10 other countries.

Zico is manufactured and packaged in Thailand, in conjunction with two co-packers, one located in Ayutthaya, and one in Sampram district.

Asked why the company did not decide to introduce the product to Thailand earlier, a representative of Coca-Cola said it was an issue of market readiness, adding "the trend is very obvious right now".

Coca-Cola faces stiff competition from Vita Coco, which, at US$1 billion (32.7 billion baht) in sales, is the largest coconut water producer in the world.

PepsiCo announced its desire to acquire Vita Coco's parent company All Market Inc earlier this year.

Vita Coco also has the backing of global beverage giants like Anheuser-Busch InBev NV and Reignwood Group, which hold a 25% and 20% stake in the firm, respectively.

Elsewhere, Zico has been able to create a niche market with its no-sugar formula, but in Thailand it will also compete with thousands of street-side coconut sellers.

The 30-baht price tag is based on the price of fresh coconut water (which averages 20-30 baht), and not on the price of competing packaged products, said Mrs Karaked.

"Unlike street-side sellers, Zico offers consistency in taste, hygiene and convenience," she said.

"There may be many sellers, but they are not very easy to find."

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