With cocunuts readily available fresh from street-side vendors, restaurants and hawker centres, it seems counter-intuitive that Southeast Asians would opt to buy pasteurised coconut water in a Tetra Pak.
But Vita Coco, which launched in Singapore, the Philippines and Brunei last year, believes that convenience, combined with education about the benefits of coconut water, will win consumers over. “You can’t put a coconut in your car’s cup holder, and you can’t fit a machete in your handbag,” observes Prinz Pinakatt, VP of marketing and sales for South Asia and Pacific.
Jokes aside, Vita Coco has a tried-and-tested method for launching a new product category and creating demand in new markets, in which convenience and hygiene play a major role. “First step is to convey the benefits, to get the message out via public relations that coconut water is healthy and hydrating,” says Pinakatt.
Even in markets where coconut water has long been regarded as good for what-ails-you, education is still needed. “They know that coconut water is ‘cooling’ and healthy, but can’t say why,” he comments. “Now we can confirm for them that the electrolyte content is both nutritious and hydrating. We also communicate it as part of an overall healthy lifestyle. This is a key pillar of success for us.”
On the whole, however, Vita Coco isn’t setting itself out to compete with fresh coconuts and is open to building the category as a whole, says Pinakatt. “There are occasions when drinking from fresh vendor coconuts makes sense — but it’s not always accessible, such as when you’re on your way to the gym or on the way to work.”
When it comes to education and building awareness, the brand prefers on-the-ground and social activations to communicate this brand message. “Point-of-sale is a major awareness generator. We create displays that bring to life the atmosphere most people associate with coconuts. Vita Coco was born on the beaches of Brazil and that’s what we recreate … combined with massive sampling.”
Keeping things fun, as shown in the tongue-in-cheek global campaign ‘Stupidly simple’, crafted for the brand by Droga5, is also really important. “Healthy living can come off as a bit ascetic. We want to be happy-healthy.”
While the global message is around hydration and healthy living, local activations of the campaign can advertise more functional aspects of the product, where relevant. In markets where coconut water is already embraced as a healthy drink, such as India or Thailand, local executions may focus on its functionality or hygiene.
“In Southern Asian countries, food and health safety is a big issue,” says Pinakatt. “I’m of Indian heritage, and from previous visits to India I know many people bring coconut water to hospitals. But hospitals there have started to ban coconuts from the venue because the husk or machete is not sterile. When repackaged in a safe Tetra Pak, however, coconut water will not have this issue.”
In his experience, Pinakatt has also found that, in general, Asians prefer to be able to justify purchases based on functionality. “If you ask someone in India why they bought a bag by Louis Vuitton, they will point to its craftsmanship and heritage as a luxury bag maker — even though they very likely bought it for the prestige.”
Getting the message right is so important to the brand that it prefers to hire and train its own promoters and educators. “We don’t want a promoter from an agency who sells sausages one day and coconut water the next. They won’t be able to convey our brand the way we want it to.”
Much of the brand’s social media and digital work is also handled in-house, and the brand doesn’t have a creative or media agency of record in APAC, choosing instead to work with local PR agencies. It is not to say that Vita Coco is against working with agencies altogether. The brand’s Asia-Pacific branch is looking for a regional partner. “I do not foresee us hiring agencies left and right,” explains Pinakatt. “I’d rather have a smart-hub type of agency that will help us run key initiatives. We’ll do the rest ourselves.”
Last year, the company also launched a multi-million-dollar marketing campaign that included digital, print and out-of-home. In 2016, the company plans to invest in sponsorships and social media and the digital amplification of branded content. In an earlier interview with Campaign Asia-Pacific, Pinakatt declined to share details on media spend. “Our partnerships will be designed to deliver brand experiences instead of mere awareness through association, turning influential consumers into ambassadors,” he says. “We will also significantly increase our investment in new platforms, formats and content types.”
PROFESSIONAL CV
- 2015 VP, marketing & sales, South Asia & Pacific, Vita Coco
- 2015 SVP, marketing, Americas, Vita Coco
- 2013 Global director, alliances & ventures, The Coca-Cola Company
- 2011 Global director, energy drinks, The Coca-Cola Company
- 2010 Global director, RTD coffee & tea, The Coca-Cola Company
PERSONAL CV
- Lives Singapore
- Born Bochum, Germany
- Family Wife, one daughter
- Interests Just a normal guy: Cars, football and a cold beer while standing in front of a grill
This category-building formula has so far proven successful for Vita Coco. Euromonitor estimated Vita Coco’s sales at US$420 million last year, ahead of rivals Coca-Cola’s ZICO and PepsiCo’s Kero Coco.
Last year, the Reignwood Group, which owns Red Bull China, picked up a 25-per cent stake in Vita Coco and announced major distribution plans for the beverage. According to Euromonitor, Red Bull China has vast retail connections, funds for advertisement and sponsorship, and the understanding of consumer’s growing demand for healthy beverages. Red Bull China has no formal business with Red Bull but has grown into a US$2.5-billion brand. “If Vita Coco is promoted similarly, it could surpass sales in the US,” Euromonitor said.
As of April 2015, Vita Coco was present in 15,000 stores in China with plans to expand distribution to 40,000 by the summer, The Wall Street Journal reported. It’s expected that about 30 per cent of revenue will be generated outside the US in 2015.
The next big markets Vita Coco plans to launch in are Australia, India and Indonesia, all of which come with varying strategies. “In Australia, the ready-to-drink (RTD) coconut water category has been quite established over the past four to five years, while in India, it’s non-existent from an RTD point of view. Indonesia is in its baby shoes and doing baby steps.”
Markets are selected carefully, explains Pinakatt, with the firm asking itself if consumers there, aged 18-25, are ready for a new, premium, FMCG category. “Malaysia, for example, was considered as coconut water is deeply embedded in the culture. But the economy isn’t very great right now, so we decided we should maybe wait a little longer.”
It was the challenge of expanding into Asia, combined with the prospect of creating a new product category from the ground up, that lured Pinakatt from Coca-Cola, where he’d worked since 1997, most recently as global director of alliances and ventures. “I was thinking of moving to Asia. I wanted to because it’s the growth engine of the world. I’ve worked in the US and Europe and I’ve recently missed the conviction that growth is possible and to be enthusiastic about it.” He also wanted to be part of a brand and product that he’s passionate about and proud of and wanted to work with a leadership team that inspired him. “My boss at Vita Coco, Michael Kirban [the founder and CEO], and everybody else, totally ticks those boxes.”
The vibrancy and can-do-spirit of the company culture also helped win him over. “Vita Coco has been in this business for 11 years now. We’ve fought hard. We’ve got some bloody noses, because entering a market with a category that doesn’t even exist has been tough. But we’re happy that other brands are following in our path and replicating our success because we believe that coconut water is a great beverage for a healthy and sustainable lifestyle.”
