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An Increasing Appeal of Coconut Water in the Brazilian Market

13 September 2013

The Brazilian soft drinks market continued to witness growth in 2012, driven by the extensive summer heat and the good performance of the various categories present in the market. One of these growing segments was coconut water, which although small in packaged volumes, is popular in Brazil due to its flavour and health appeal. During 2012 coconut water alone registered a growth of 13%, driven by high consumer demand and changing consumer needs as a result of the country’s growing middle-class. Consumers are becoming more health conscious as their social and economic well-being improves, leading many to switch from sugary beverages to more natural and healthy alternatives.

An Increasing Appeal of Coconut Water in the Brazilian Market

According to the Canadean analyst, “the Brazilian Soft Drinks market is unique in the fact that the presence of many tropical fruits and plants have long influenced brands and supported the development of local forms of drink”.

Coconut water is one of these beverages and has been around for centuries, widely available in coastal regions where it is usually purchased as a fruit for immediate consumption. Consumers in recent years, however, have become wary about potential hygiene issues and concerns about the storage and origin of this fruit. These factors, together with the lack of coconut trees in the inland regions, have driven some producers to develop packaged coconut water.

Packaged coconut water volumes remain low due its high price per litre when compared to other beverage alternatives. Nevertheless, the segment is led by Kero Coco (PepsiCo) and Ducoco (Ducoco), which both registered double-digit growth in 2012. This performance was aided by coconut water being low in calories and rich in electrolytes, making it a natural hydrator after exercise. Coconut water is in tune with the current health and wellness trend in Brazil, where consumer interest in natural ingredients and products is on the rise. Producers have invested, and are planning to invest, considerable amounts of capital in this segment; one reason why the outlook of coconut water remains positive.

This information is based on findings from the Canadean Report: Brazil Soft Drinks Market Insight published in June 2013.

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