On the Water Front Powered by

On the Water Front

How did coconut water become the trendy new miracle beverage? In a nutshell—shrewd marketing.

BY ALYSSA GIACOBBE // ILLUSTRATION BY PAUL BLOW

ONE WINTER EVENING in 2003, twentysomething New Yorkers Michael Kirban and Ira Liran were cutting loose in a Manhattan bar, enjoying a few cocktails, eyeing the ladies. The childhood pals—Kirban had started a software company; Liran, a marketer, was between jobs—sidled up to a pair of pretty Brazilian expats. They wanted to know what the women missed most about their homeland. The beaches? The wildlife? The waxes? “Agua de coco,” the women replied; the water inside young coconuts, which Brazilians drink “practically from birth” and revere as the most delicious and nutritious drink in the world.

At the time, the United States was in the throes of a specialty-beverage boom, with customers clamoring for “functional” drinks with ambitious names—SmartWater, Rockstar, Guru— and lofty promises of healthier, brainier, sexier lives. Looking into coconut water, Kirban and Liran learned it would fi t in to the category quite nicely: An 11-ounce serving (roughly one coconut’s worth of water, which is not to be confused with coconut milk, which is derived from the meat of the fruit) has more potassium than two bananas and 15 times more electrolytes than the average sports drink. With no fat or added sugar, it averages a mere 60 calories. It was also more rehydrating than anything on the market and, they discovered through diligent testing, a pretty decent hangover fi x.

Coconut water was, as the women noted, wildly popular south of the equator, but in the United States it remained largely unavailable. Latin food distributor Goya sold it to bodegas and ethnic groceries, but the company added a preservative and packaged it in a can, which didn’t do much for the taste—already somewhat metallic—or the aesthetic appeal. Kirban and Liran envisioned coconut water in its natural

industry

“Coconut water is our fastest-growing beverage segment,” says a rep for Whole Foods. “We’ve seen sales increases in the triple digits.”

state and, anticipating the bottled-water backlash, packaged in eco-friendly containers.

Six years later, Kirban and Liran’s brand of coconut water, Vita Coco, is sold in more than 10,000 stores across the United States. The competition, unsurprisingly, has increased, and Vita Coco now shares what has become a multimillion-dollar market with two top rivals: Zico, founded in 2004 by New Jersey native Mark Rampolla, and O.N.E., founded in 2005 by Brazilianborn Rodrigo Veloso. The diff erences between the waters are slight—after all, each company deals in the same product, extracted directly from coconuts—but they’ve carefully targeted diff erent segments of the market: Zico the yogis, runners and triathletes; O.N.E. the healthy eaters, moms, and the occasional celebrity (Gisele Bündchen is a fan, they’re happy to note); and Vita Coco the younger, workhard, play-hard types, who might enjoy what its website calls a “hydration vacation” where “bikinis are optional.” O.N.E. makes a big deal about giving back and recently launched O.N.E. Water, a spring water packaged in a paper carton. The profi ts, says Veloso, will go to charity.

“Education campaigns have been crucial,” adds Veloso, whose company regularly stages demos and samplings at locations throughout the country. For instance, Manhattan’s Crush Wine & Spirits shop recently held a blind tasting for those occasions when you “need something even more crisp than muscadet.” Vita Coco, meanwhile, has deployed splashy vans decorated with beach scenes and no fewer than 2,000 real green coconuts. They prowl the streets of New York, Boston, Miami and Los Angeles, blaring reggae music and braking for dehydrated passersby.

All those eff orts are clearly paying off , with increasing numbers of consumers happy to spend up to $3 per 11.2-ounce carton of the stuff . Vita Coco reports that sales have increased at least 200 percent annually, with 2008 revenues hitting $6 million and 2009 revenues predicted to reach $20 million. Every year since launching, Zico has doubled sales, and O.N.E. has tripled them. “Coconut water is one of our fastest-growing beverage segments, especially over the past year,” says Perry Abbenante, global grocery buyer for Whole Foods, which stocks all the brands nationwide. “All three are promoting heavily at retail, and we’ve seen sales increases in the triple digits. Customers are responding very positively.”

While each company attributes its success to an increased interest in healthy living, coconut water brands have something else going for them: the American obsession with the latest and greatest. “The beverage industry lives off of new things happening,” says Harry Balzer, chief industry analyst at market research company NPD and author of Eating Patterns in America. This particular trend, as he sees it, is less about the popularity of coconut water than the enduring appeal of plain old water. “Bottled water—and the fact that we’d be willing to pay for it—was the biggest change the beverage industry has ever seen,” he says. “And along the way there grew a segment that will always be looking for the new version of that.”

As the awareness of coconut water grows, the three brands are rapidly moving beyond natural-foods and specialty markets into more conventional supermarkets and other arenas. Last month, Vita Coco launched an exclusive partnership with airport candy and drink chain The Grove, which has stands in 50 airports across the U.S. It’s now sold in corner convenience stores in most major cities, thanks in part, says Kirban, to fl avored versions like mango-peach and pomegranate-açai that appeal to those of us with more “mainstream” tastes. Zico is aligning itself with Bikram yoga, a practice that takes place in 105-degree heat. Rampolla says that he’s worked hard to cultivate a “feeling of relaxation and replenishment on a psychological level.”

For all the new adherents out there singing the praises of coconut waters, the poster child for the elixir’s powers may be Vita Coco’s Liran. The Brazilian hottie he met in the bar? He married her.

TESTING THE WATERS

Which coconut water is for you?

ZICO Yoga fanatics obsess over Zico, but don’t let that scare you. It’s fresh-tasting and has two fl avors—mango and passion fruit.

O.N.E.

A consistent taste test winner, O.N.E. comes in a fashionable metallic blue box, and, bonus, it’s Gisele Bündchen’s favorite. The industry leader, Vita Coco is also the easiest to fnd at a convenience store near you.

VITA COCO

ALYSSA GIACOBBE writes for In Style, Nylon, Men’s Health and Boston Magazine. She takes her coconut water on the rocks, with salt.