All Market Inc.’s new push will be into the high end.
The company behind Vita Coco has launched a new brand, called Coco Community, with Nam Hom coconuts supplied by Thai coconut processor Cocos Enterprises. The brand will be organic, Fair-for-Life certified, single-origin and the company’s first entry into what CEO Mike Kirban is calling “the artisanal coconut water” segment.
Debuting at Natural Products Expo West, Coco Community is sourcing its Nam Hom coconuts from the Ratchaburi Province in Thailand. Those coconuts are known for their sweet and nutty taste, according to the company.
While All Market-owned Vita Coco dominates the premium coconut water market, the segment that it defines as artisanal grew the fastest over the past year, powered largely by the momentum of high pressure processed Harmless Harvest, which pioneered the high-end tier and also uses Nam Hom coconuts.
The release of Coco Community is intended to give All Market a product that can compete for share in that market and the high prices it commands: a 500 mL bottle will carry a suggested retail price of $4.99, while a 250 mL bottle is expected to sell for $2.99. The products are expected to reach stores by May 1.
“The artisanal space has grown and it’s doing well as the category continues to segment,” Kirban said. Below the premium and artisanal space, he added, he sees the rest of the category segmenting into value-priced cans and private label products.
“As the ‘coconut water guys,’ we feel we have the ability to play in all of these segments,” Kirban added.
Cocos Enterprises, started by raw food enthusiasts Roman Devivo and Antje Spors, has supplied frozen, raw Nam Hom coconut water to other brands associated with that tier of the category in the past, including Harmless Harvest.
One key difference between the Coco Community and Harmless Harvest products will be heat: Coco Community uses flash pasteurization instead of HPP, a precautionary measure that Kirban says is the result of his company’s research into coconut processing.
“For now, there’s not a proven method of processing raw coconut water that’s both safe and scalable,” Kirban said. “We’re pretty well versed in coconut water, we know the processing of it, we haven’t found a way to do it.”
Kirban shared numbers about the coconut water market as well, indicating that import data indicated that overall category sales were $1.2 billion in 2015, including coconut water that was blended into other products as an ingredient. While the artisanal category only accounted for about 3 percent of that total, it had grown 58 percent in the past year.
The growth of the artisanal segment — and Vita Coco’s own stagnant performance in its prime retail channel, natural and specialty stores including Whole Foods — helped Kirban recognize the importance of developing a product for its consumers, he said. After a period where the company hadn’t focused on natural and specialty, he added, the ability to incubate products like its coconut oil in the channel had forced the company to re-engage with the channel.
“We hadn’t been incredibly focused in natural or specialty over the past few years,” he said, “In past eight months we have been, especially as we’re doing other stuff,” like coconut oil or Coco Community.
Kirban said he was enthusiastic about the founders of Cocos Enterprises, which works with a cooperative of farmers in Thailand to grow Nam Hom coconuts organically. Cocos last year developed a raw Nam Hom product of its own, called Symbiosis. That product, which claimed that it had a raw production process that nevertheless gave the brand a four-month shelf life at ambient temperature, is not yet available in the United States.
Coco Community does not use the same processing methods as Symbiosis, Kirban noted, and the new All Market product, even though it is pasteurized, will travel through a refrigerated distribution system, something that has not been necessary for Vita Coco.
“We’ve had to set up new refrigerated trucks, warehousing, I’ve had to learn a whole new route to market,” he said. “Creating a new brand has been really fun.”