Tuesday, July 29, 2014

Battling for Share in the Market for Coconut Water

A recent article in the New York Times illustrates why competitors are such a vital stakeholder group for any company, stimulating aggressive marketing battles that can push the firms to do their very best, day after day.

The article concerns the outlet-by-outlet battle for shelf space--and, ultimately, market share--by two fierce competitors in the coconut water category, Zico and Vita Coco. 

Zico positions itself as pure, premium coconut water.

Vita Coco positions itself as fresh and natural.

The two startups began fighting for shelf space in New York City around the same time in 2004. Soon other firms joined what was a niche industry and now has become a fast-growing major market poised for global expansion.

It didn't take long for big corporations to get involved. Pepsi bought a chunk of O.N.E., which competes with Zico and Vita Coco. Coke acquired Zico. Chinese-based Reignwood Group just purchased a stake in Vita Coco, which is the current market leader and is distributed by Dr Pepper Snapple Group.

Once Zico became part of Coca-Cola's beverage empire, Vita Coco's cofounder Michael Kirban says he felt less pressure in the day-to-day fight for shelf space and market share. He told the New York Times that he wishes Zico was still a serious threat. Why? Because having a scrappy rival forced Vita Coco to be at the top of its game and remain aggressive and creative. As the market leader, will Vita Coco feel sufficient pressure to keep fighting, shelf by shelf, outlet by outlet? China is the company's next major target market, so the fight is on.

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