Cover Story: In a Nutshell

Four years ago, an attendee at some of the more specialty beverage trade shows, such as the New York Fancy Food Show or Natural Products Expo East, would probably have stopped at a booth for a beverage brand called Zico or O.N.E. or Vita Coco out of pure curiosity. Sprinkled among the upscale tea and juice products, these brands, packaged in attractively designed Tetra Pak containers, would have attracted attention just for the sheer newness of the product, namely, coconut water. Well-known in Asian and Latin American countries where it’s been consumed for centuries, coconut water was relatively unknown to consumers in the United States. This year, the coconut water market in the US is estimated to ring in around $35 million in sales, according to Beverage Marketing Corporation (BMC), no small feat for a category that consists of three main brands. And, if Brazil is any indication of where the future of the category lies—sales of coconut water in Brazil are worth more than $300 million a year and have exceeded that of orange juice—then coconut water could very well be the hottest emerging beverage category, one of the many reasons Beverage World decided to lead its 2009 H.I.T. List by focusing on this fast-growing market.

“I have absolute certainty coconut water will be a billion-dollar category within 10 years,” Mark Rampolla, founder and chief executive officer of Zico, says. “The way it’s growing, the way consumers are adopting it, with some good competitors building it, it’s going to grow scale quickly.”

Goin’ Coconuts
Coconut water, or agua de coco as it’s called in Latin America, has been available in the US for quite some time, although largely sold in ethnic grocery stores and packaged in a can with preservatives. Pure, natural coconut water didn’t launch in the states until five years ago. The entrepreneurs behind the three main competitors in the US coconut water market all saw firsthand the appeal of coconut water in South America and envisioned how the naturally nutritious drink would fit into the US market.

New Yorkers Michael Kirban and Ira Liran learned about the popularity of coconut water while talking to Brazilian expats in a bar. After checking it out, the pair launched Vita Coco in 2004, hoping to capitalize on the growing trend of functional beverages. New Jersey native Mark Rampolla fell in love with coconut water while serving as a Peace Corps volunteer in Central America and launched Zico with the vision of introducing American consumers to what he felt was nature’s sports drink. In 2006, Brazilian-born Rodrigo Veloso introduced O.N.E. (One Natural Experience) Coconut Water in Southern California after watching the success of coconut water in Brazil.

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