Crisis innovation: Coca-Cola Brazil enters coconut water and reformulates juice line
Brazil is just starting to emerge from a four-year economic recession – the worst in the country's history.
Last month, Coca-Cola Brazil launched Agua de Coco coconut water-juice blends in three 200ml carton variants – coconut, mango and passionfruit. It also expanded its Frut juice line to include a total of five flavors – grape, orange, peach, mango and guava – all with reduced sugar content in smaller 1L bottles. A cashew variant is set to launch in January next year as a regional specialty in the Northeast.
Coconut water was always a 'goal in view'
Speaking to FoodNavigator-LATAM about the recent run of new product development, Pedro Abondanza, senior group marketing manager for nutrition brands at The Coca-Cola Company, said the company had always considered coconut water as a “goal in view” and acknowledged it was a“big opportunity” in Brazil.
“Over the last decade, we focused on developing water, tea and juice markets. This has given us the expertise to work and seek innovations for new categories,” Abondanza said.
Agua de Coco was launched after about nine months of planning, he said, six of which were taken up finding a suitable coconut water supplier.
“People are becoming more and more attentive and concerned about the origin, quality and benefits of the products they consume. ...We spent six months in this process since we are very careful about production models that put sustainability first.”
Coca-Cola Brazil sourced its coconut water from Timbaúba Farm, he said, a traditional fruit producer in Northeastern Brazil because it aligned with principles of conduct required by Coca-Cola Brazil, including responsible practices and policies that complied with environmental and labor laws.
“The product has just been released and we now have a market consolidation and distribution expansion plan which is very competitive. In the medium-term, our ambition is to hold 10% of the market, which represents around 12 million liters annually.”
Abondanza said Coca-Cola would track product acceptance among Brazilian consumers and listen to feedback before resizing its “ambition in this category”.
“We are investing in the coconut water market when it is a growing category in Brazil. This category has been gaining frequency, that is – it is increasingly present in the day-to-day life of Brazilian people,” he said.
Globally, the packaged coconut water is set to surpass $8.3bn by 2023, according to market research firm Aritzon, growing at a CAGR of 25%.
A price-sensitive juice boom
Abondanza said Brazilians were also continuing to show interest in regular juices, particularly price-sensitive brands in the backdrop of an economic crisis.
“We know the juice category is very competitive, but it still offers a good opportunity to grow,” he said.
With the socioeconomic context of crisis and new competition in the ready-to-drink juice category, he said Brazilian consumers were looking specifically for products closer to freshly squeezed variants but remained convenient and aligned with their lower purchasing power.
After around one year of market research, he said Coca-Cola Brazil decided to downsize Del Valle Frut bottles from 1.5L to 1L, offer more flavor options and reformulate the juices to be more full-bodied with reduced sugar content to cater to these needs.
“In the last few years, we have started a process of gradual reduction in the level of sugar added in Del Valle Frut, and currently the new formulations already follow a maximum sugar amount of 4.9g per 100ml. Depending on the flavor, this causes Frut to present formulations with up to 60% less added sugar than the average national market.”
With these changes, Abondanza said Coca-Cola Brazil hoped to continue growing the Del Valle Frut brand at a rate of around 5% each year.
