It wasn’t an easy summer for O.N.E.
Expectations that the brand would be entering the Pepsi distribution system on a national level – and that the product itself would be converting to organic certified across the breadth of the line – were put on hold as the company fought to secure adequate supply. Sales numbers dwindled as the brand fought to fill its supply pipeline, while other products foundered as consumers failed to connect.
“Our product shortage made our numbers really look not very good,” said CEO and founder Rodrigo Veloso. “Early next year I would love to look at numbers… but at the current stage where we are, it’s not really fair because we lost a lot of circulation due to our supply shortage.”
But it’s Fall now, and once again, Veloso is full of optimism. That’s because after nearly a dozen trips to Asia, Veloso recently closed on a deal to add two Filipino coconut processing plants to O.N.E.’s supply lines, giving the company – and majority owner PepsiCo – the capacity to process about 2 million young coconuts a day. That’s the equivalent of 2 million 330 ml tetra-pack containers of coconut water, he added.
In cooperation with the new factories, the brand has also begun a program to increase its philanthropic profile.The company has begun to work with a program called the O.N.E. World Fund, which is intended to help workers in source regions for the coconuts, as well as consumers in the U.S. through another program called Healthy Child Healthy World.
As for the brand’s commitment to organic, 40 percent of the factories’ capacity is already certified, and the hopes are to move the company’s core pure coconut water to organic in the near future.
“We are attempting to come up with a time when we can make an easy swap,” Veloso said.”Instead of confusing distributors, retailers, and consumers with a gradual change, we want to be able to pull the trigger and change the whole line.”
Helping to make the change is the blitz by the Philippines as a nation to make itself one of the leading sources of coconut water supply in the world. The country has received investment from both PepsiCo and Vita Coco in recent months, not just for manufacturing capacity but also to add coconut farming as well.
O.N.E. hasn’t just been struggling with supply lines, however. On the consumer end, Veloso admits, one of the brand’s line extensions, O.N.E. Active, didn’t have the hoped-for impact on sales. The company is on the verge of announcing major changes to the line, including a new, black-on-green color scheme that makes it look much more like a sports drink.
“Some people thought it was just a flavored coconut water, so we wanted to make sure that it was distinct within the product line,” Veloso said.
The re-launched Active line won’t have added products like stevia, Gingko Biloba or Ginseng, but instead will feature enhanced sodium content for rehydration, as well as a payload of antioxidants and vitamins.
The brand is about to try once again to flood the Pepsi system with product, and the deals in the Philippines have an added bonus – they may help to abet the supply of coconut water for other brands in the Pepsi system, Veloso said.
Still, the entry into the system will take place nearly five months after the company first released the news – and after a summer in which competition around coconut water went white-hot. Veloso said that he wasn’t worried that his brand might have lost ground.
“I’m not concerned at all,” Veloso said. “I feel like we’ve never been in a better position – we’ve solved supply issue, our product is ready to flow. Once the product is flowing through the distribution system of both Pepsi and the natural channels at full force we will regain leadership in the coconut water category.”