BY EMILY PERRONS
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Vita Coco was established in 2004,brand leader in the coconut water industry,owning 70% of the market.
Currently a million pound businessand expanding.
Vita Coco is already well established as a brand to be ableto diversify exploiting its values into another
markets such as activewear. By undertakinga business analysis,Vita Coco can be found to be a brand that has
‘nine-lives’.After a number of lawsuits tryingto crush itas a product and a market, and big competitive
players such as Coca Cola and Pepsi tryingto out play them, they have come out triumphant. Not only do they
hold a market of their own (coconut water), they have also penetrated markets such as the bottled water,
sports drink and fruitjuicemarket. This solid growth has created a customer basefor Vita Coco in the millions.
In the creativeanalysis itcan be found that alongsidetheir ‘stupidly simple’and effective marketing
campaigns,and useof celebrities,Vita Coco have managed to portray themselves as a fun, innovative, exciti ng,
natural and an honest brand.
Vita Coco as a brand exemplifies innovation,itwas the firstinto the coconut water industry,and therefore why
not be the firstto create activewear from the product they already usein a separate market. Usingthe
coconuts outer coatand coir for fibrefor the textiles gives the brand extension a USP that no other company
has,again makingthe company the firstto innovatea modern, sustainableway of living.
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Thisreportprovidesanin-depthbusinessandcreative analysisof VitaCoco(VC),supportedbya
range of data. It concentratesonthe brand’smarketshare, customers,competitors,marketing
communicationsapproach,andfinancial position. Atthe same time,itintroducesanew brand
extension of active wearforthe future of VC.
2.0 VITA COCO
‘VitaCocois the fastestgrowingbrandinthe Soft Drinks market.’(The Grocer,2015). It was
establishedin2004, by Mike Kirbanand Ira Liran. They initiallyconcentrated onestablishingthe
brand in Americahoweverhave now denominatedmarketswithinthe UKandothercountries(Vita
Coco,2015). Coconutwaterisa newconceptto Britishculture,howeverhasproventobe a very
popularaddition tothe beverage market.
An effective wayof analysingVC isusinga ‘Brandsphere’ whichismade upof three levelsall thatare
inter-connected,howeverdifferentiatedinthe amount of control a brand hason them(Palmer,
Figure 1: Brandsphere
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2.1 MACRO ENVIRONMENT – PESTLE
The macro environment‘showsthe elementsof the external environmentinrelationto the
organisationanditsimmediate surroundings.’(Brassington&Pettitt,2013). VCmust ‘scantheir
macro-environmentcontinuallytoidentifyfutureopportunities andthreats’and tounderstandhow
it couldaffectthe brandand helpachieve success(De Chernatony, McDonald&Wallace,2011).
VC’sideaoriginatedfromBrazil,here ‘the drinkispartof local beverage consumptionculture’
(Euromonitor,2011) and contains ‘lessthan1% natural fruitsugar’(VitaCoco,2015). The UK’slocal
beverage consumptionculture ismainly carbonateddrinks(Mintel,2015), withthe average drink
containing‘more than36 grams’of sugar (Reilly.K,2015).
A recentstudyshowed 44% of people believedthatbusylifestyles make itdifficulttobe healthy.
Havingcoconut wateras part of ourbeverage marketnow helpsbusyconsumers make aneasy
choice of a lowsugar,energy filled,healthychoice (Mintel,2015). The ‘shiftinbehaviours’ and
habitstakinga healthierturn (Schatz&Beck, 2015), resultedin 46% of adultsmonitoring/limiting
the amountof sugar intheirdiet(Mintel, 2015). Meaninga healthydrink suchasVC beingreadily
available for‘onthe go’helpsconsumers fulfil theirwantsandneeds,andprovesthere isahuge gap
In 2012 VCwas takento court byplaintiffs, due tomisleadingadvertising.VCclaimedthattheir
independentstudies showedthatthe drinksdidn't packnearas manyelectrolytes (Woodruff,2012).
In doingso,the brand lacksthe trust of consumers thatothermore established brandsenjoy.
A more currentaffairthat will effectVC’smacroenvironmentis expertswantingtointroduce atax
on sugarydrinksinthe UK to improve children’shealth (Petitions,2015). If the petitionisagreed,VC
wouldn’tstandalone inbeingalowsugar,low calorie drinkandothercompetitorscouldpossibly
become threats. However, asthe petitionisstill undergoing the bottledwatermarkethasthrived
due to the publicationof reportsstatingsugarisbad, while othermarketshave lostout (Mintel,
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2.2 MICRO ENVIRONMENT
2.2.1 MARKET SHARE
‘VitaCocois the fastestgrowingbrandinthe Soft Drinks market,growing81% YoY in2014’ and
coconut waterbeingthe fastestgrowingsector. It’scurrentlyholding ‘over70% of the marketshare’
(The Grocer, 2015) and ‘occupies94% of the UK coconutwatercategory today’(Brook,2015). Thus,
reflectingthe extenttowhichthe brandismeetingconsumers’needsbetterthanotherbrands(De
ChernatonyandMcDonald,2003). AfterVClaunched in2004 it hasbecome ‘one of the most
dominantmarketplayers,withproductsin17,000 storesnationally.’ (Goldschein&Groth,2011).
VChas establishedabrandnewcategory,and beingthe firstintothe marketitis evidentthatit is
one of the mostdominantmarketplayers(BusinessInsider,2012). Beingthe pioneerof anew
categorydifferentiatesitfromotherplayers suchas ‘top global beverage giantsPepsiCoandCoca-
Cola’. PepsiColaunched100%Coconut Waterthroughits premiumNakedJuice brandin2010
(Euromonitor,2011), andCoca-ColaacquiredZICOBeveragesin2013. (Segal,2014). VC’s
competitorshave abigstrategicbenefitof beingthe ‘beverage giants’inothermarkets,therefore
havinga lotmore disposablecashtospendonadvertisingetc.
Figure 3: PricingQualityMatrix
VCcosts £3.49 (perlitre) fromaleadingsupermarket (Tesco.com, 2015),comparedto a normal
bottle of water,costing40p per litre (Natural Hydration Council,2015).VC alsosellsforroughly
double the price of mass-marketsportsdrinks.Beingatsuch a highprice,comeswiththe needtobe
such a highquality accordingtothe pricingqualitymatrix.VChasuseditsallegedhealthbenefitsto
justifyitsrelativelyhighprice (Roolant,2015),since qualities surroundingingredientsare deemedby
consumers asmost importantwhendefiningasoftdrink aspremium. Forexample theirgoodness
and naturalness (Mintel, 2015).However, inorderto bringcoconutwaterbeveragesclose tothe
price of existingproductsinthe sportsdrink,bottledwater,juicemarket,theymustsolvethe issues
of availability,qualityandperishabilityof coconuts.
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‘Throughout2015 there has beena noticeable shiftinconsumerattitudes,withcustomersbecoming
evermore healthconscious.’(The Grocer,2015). Thisis a huge targetaudience forVC,as coconut
waterhas manyUSPs (Unique sellingpoints),primarily beingitslow calorie contentwhencompared
to other100% juice products,makingita veryattractive optionforhealthconsciouspeople
A huge customerbase thatVC coversisthe bottledwatermarketandsportsdrinks markets
combined.46% of bottled waterbuyerare interested inenergy-boostingingredients, 44% innatural
sugar-free sweeteners and43% in electrolytes (Mintel, 2015). Therefore havinganoptionlikeVC
appeals toa huge percentage of consumers interests.
‘Coconutwater, onthe contrastto many othersportdrinks,ispackedfull of electrolytes,hasa
natural colourand providesnatural energy.Hence,ithasthe potential topull inawhole new
Finally, ‘inmanysocietiesthereare anincreasingnumberof consumerswhohave exceptionallyfull
lifestyles,leavinglittletime forbranddecision.’ (De Chernatony,2010).VC targetsthese consumers
by beingan‘onthe go’drink,and bybeingthe firstbrandto sell coconutwater.
Consumersbuycoconutwaterfor a numberof reasons,firstlybeingitsfunctionality(Elliott&Percy,
2007). VC isa functional productas it’sboughtforquenchingthirst,howevermore importantlyfor
Figure 4: Functional/EmotionalModel.
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2.3 INTERNAL ENVIRONMENT
Figure 5: SWOT analysis.
2.3.1 FINANCIAL POSITION
VCis ‘a £100 millionbusiness’ (Kastner&Partners,2015). The value of the coconutwatercategory
reached£47.9m in 2015, (The Grocer, 2015) withVC claiminga70% share at £30.8m, up from
£22.2m the previousyear(Devlin,2015).Comparedtoone of its biggestcompetitorsZico,that‘has
lessthan20 percent’marketshare,VCcan be seentobe in a profitingfinancial position (Segal,
2014). The marketshare and cost of the brand tellsusthat VCare clearlyshowingthattheyare
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2.3.2 MARKETING COMMUNICATION
‘Marketing is what’s selling these drinks, since the taste isn’t something that will appeal to
everyone.’ (Burkitt, 2015)
VCuses‘celebritieslike RihannaandMadonna to promote itsproducts (BusinessInsider,2011).It
alsouses keyopinionformerssuchasdieticians,nutritionists,andhigh-profilesportspeople to
endorse VCandthe benefitsof coconutwater (Brook,2015).
The tropical brandingof its packaginginthe ‘VivaVita’campaign,helpstoboostitsupbeatimage of
excitementandcool (Mintel,2013). The packagingisalsoveryimportantinportrayingitas a
premiumbrand (Mintel, 2015).
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They have alsoran variouscampaigns,the mostrecent,‘Stupidly simple’.Thisfeaturesdigital,social,
out-of-homeadvertisingelementsandis the brand’sfirstventure intobroadcastTV,which
3.0 CREATIVE ANALYSIS.
The identityof the brandis the one that the companyattemptsto communicate. A useful
conceptualisationof brandidentitywasprovidedbyKapferer(2008). (Appendix A).
Figure 6: IdentityPrism.
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3.1 BRAND ESSENCE
Figure 7: Brand Essence
(Adapted fromChernatony, (2006):232)
‘A brand essence is a promise of specificvaluesand benefits,one that has meaningand relevance
to users. To consumers,these promisesdifferfrom those of the competition.It is the consumer’s
gut feelingaboutyour company, service or product.’ (C, 2015)
VChas an excitingimage,due toitsnewerstatus,and isalsoreadilyassociatedwithinnovation.
(Mintel,2013). The core essence runsthroughouttheircommunicationsand positionsthemselvesas
a lifestyleandsportsdrink,theyare seenasa fun-lovingbrandwithpersuasive credentialsfor
natural hydration (Brook,2015). VC’swebsite emphasisesthe factthatthere productis ‘stupidly
‘simple’.A keycommentfromVCwhichtrulyembraceswhattheyare aboutis ‘whereverwe find
complexity(in foodculture orthe worldat large),we fightitwithamachete of simplicity.We point
out the absurdityof the complex andansweritwiththe beautyof the simple.Stupidlysimple
simplicity.’‘‘Neverfromconcentrate’isacritical brandpromise,aswe live the ethosof ‘straight
fromthe tree,nota lab’’(Brook,2015).
Anotherwayto lookat the brand essence of VCisusingthe brandpyramid.Thisenablesthe core
Figure 8: Brand Pyramid
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(Adapted fromDeChernatony (2006):226)
3.2 BRAND PERSONALITY
Figure 9: Brand Personality
All brandshave a personalityandbycommunicatingittoitsconsumersitgraduallybuildsup
character. The way inwhichVC speaksof its products showswhatkindof personit wouldbe if it
were human (Kapferer,2008). Thiscan be definedas‘the humancharacteristicsortraitsthat can be
attributedtoa brand.’ (KellerandRichey,2006).VC’sbrand personalityaccordingtoAaker’sModel
issincerity.Thisisbecause of itsnaturalness (Coconutwater(99%),Natural fruitsugar(1%),Vitamin
C) andhonestyaboutitsingredients. (VitaCoco, 2015).
VCalso communicates itsfun/cheerful/ethical personality throughitspackaging,byusing TetraPak.
Thisis a ‘BPA- free,eco- andsocially-responsible formof package made fromwoodfibre,a
sustainable resource.’ (VitaCoco,2015).
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The above images alsoshowhowVC’spersonalityisperceivedas ‘sincerity’due tobeing ethical,
exciting,cool andfeminine. Inthe UK, cool brandsstand outbetterthan those thatcommunicate
theirstatus. Thisis partlydue to UK consumerswantingabitof escapismduringtougheconomic
3.3 BRAND VALUES.
Figure 12: BrandValues.
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‘The brand valuesare whatthe customerssee andfeel duringtheircontactwiththe company’
4.0 BRAND EXTENSION.
A brandextensionis“the use of the name of a (parent) brandon a differentproduct category”
(Aaker& Keller,1990).However‘Withthe highcostsof developingnew brands,manyorganisations
are attractedby the opportunitiesfromline extensions.’ (De ChernatonyandMcDonald,2003).
Ansoff’sMatrix helpsshow the difference betweenthe two.
Figure 13: Ansoff’sMatrix Model.
Usinga brandextensionVC canpenetrate anew marketeasilybycarryingthroughitsalready
establishedreputationandsuccess, andbecause of thisthere will be minimal start-upcosts.
4.1 VITA COCO’S EXTENSION.
Bringingtogetherthe analysisof VC,Ibelieve thatVCare sufficientlyestablished intheiroriginal
marketto branch out intoa newmarketwitha new product. UsingElliottandPercy’spervious
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model,we cansee that ‘A Brand name whichisstronglyassociatedwithfunctionalbenefitscanbe
more easilyextendedintoproductareasboughtmainlyfortheirfunctional benefits’ (De Chernatony
and McDonald,2003). Therefore creatingabrand extensionof active wearwould onlyseem
foreseeable,asitisanotherfunctional market. The active wearwill be made fromthe coconuts
harvested forVitaCoco’scoconutwater,as the outercoat andcore of the coconutcan be usedfor
fibre inmaterials used.Thiswillbecome itsunique sellingpoint(USP).
The current active wearmarketisheavilycompetitive,withgiantbrandssuchasNike (18% share),
and Adidas(15% share) (Hall,2011). Howevergrowthinthe sportswearmarketinthe UK isbeing
drivenbya trendfor sportyclothingbeingwornbothforsportsand as leisurewear.Therefore
openingthe marketup,notonlyto sportsplayersbutalsoto customerswearingitforfashion.
The target audience will still remainsimilar toVC’soriginal market,suchashealthy,active,sporty
consumers.Howeverdirectedmore towardswomen aged16-34, as they tendto purchase more
4.2 STRATEGIC BENEFITS.
Benefitsof usingactive wearasa brandextensionare the consumerswill already be aware of VC,
and itscurrentvalues will stretchacrossto the new market. Theywill have apositive brand
associationandhave the correct perceptionof VC’squality.VC’sname on the gymwearwill
encourage trial purchase givingreassurance tothe risk-averse consumer.
AnotherstrategicbenefitisitsUSP,beingpartlymade fromthe coconutsusedfortheircoconut
water,makesitunlike anyotheractive wearbrandinthe market.Italso helpsthe brands
Figure 14: WebPage.
Finally, the brandextensionwilllinkbacktothe original productof VC.Both productsbeingcentred
on healthandfitnesswilllinktoeachotherandhelpsell one another.
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The soft drinksisa verycompetitive market,andsuch brandextensionwill deliverstrengthinface of
competition.Eventhoughgymgearisa hugelycompetitivemarket,evenbeingasmall playerinthis
marketwill bringaboutincreasedrevenue forthe brand.
The projectedfall inthe numberof youngpeople whoplaysportcouldpose achallenge tothe
sportswearmarketasyoungadultsparticipate the mostinsport. (Mintel,2015)
Figure 15: EvaluationModel.
Kapferershowsthatbytakingintoaccount the parentbrand, customers’ needsandcompetition,VC
can make an effective brandextensionaslongasall three pointsare suitable.(AppendixB)
Due to the overwhelmingevidence thatsupportsVC,anditsestablishedplace inthe market,itis
place in a competitivemarket.It
shouldtherefore considerexpansionintoanalternative marketthatcontinuestopromote
simplicity,healthandnaturalness.Ibelievethismove inthe marketshouldbe made promptly,asbig
marketplayerssuchas Coca-ColaandPepsi,withhuge cashflow, couldsupersede theirbrand. As
timingiskeyinmarketing,Ibelieve thatpushingthisextensionthroughwiththe current
governmentmovementonhealthwill be onlybeneficial forboththe coconutwaterand active wear.
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VitaCoco’s Physique isthe basisof the brand.It isthe products featuresandattributes. Forexample
its99% coconut waterand1% natural fruitsugar. Its personalitydefineswhatthe brand wouldbe
like if itwere a person,includingits characteristicandattitudes.Whichis mentioned withinthe
creative analysis.VitaCocos culture takesaholisticview of the organization, where itcame fromand
whatit standsfor, mentionedinthe social/cultural partof the businessanalysis. The strengthof the
relationshipbetween Vitacocoandthe customeristhe customer’s beliefsandassociations about
Vitacoco. Reflection iswhatvitacocorepresentsinthe customersmind. Finally self-imagelooksat
how the customerseesthemselves whencomparedto Vitacoco,doesitfitit withtheir life/self.
To make the extensionsuccessfulthe brandvaluesmust stretchandfitintothe new market of active
wear.Vitacoco must alsounderstandwhy customers buygymwearandhow itfitsinto that.
Analysingthe brandextensionscompetitionisahuge keyto successas althoughtheyare currently
the biggestinthe softdrinksmarkettheymay findthattheyare againstbiggercompetitorsinthe
active wearmarket,howeverVitacocohave an advantage of a USP, of beingmade outof coconut.
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