The plant-based water, or “superwater” category has essentially gone from a non-existent market to a $1 billion industry in just seven years, and it’s showing no signs of slowing down.
Research from New Nutrition Business suggests that the industry could be worth up to US$2 billion by 2025, and as the market continues to broaden its offering with the rising popularity of birch, aloe vera and maple water to complement the industry leading coconut varieties, this prediction is on course to become a reality.
Food Magazine recently caught up with Scott Mendelsohn, co-director of Australian coconut water brand Raw C to chat about the plant-based water category, the company’s launch into the market, and how Raw C has been able to differentiate themselves from what has quickly become a saturated market.
According to Mendelsohn, one of the primary reasons that plant-based waters have become so popular in the past five or so years is due to advances in technology, specifically relating to the extraction process of the water from the plant source. Mendelsohn says that innovation within the packaging sector specifically has enabled the coconut water industry to deliver a fresh and consistent product.
“We package our coconut water in the Tetra Pak which is fantastic for keeping the product fresh and free from spoilage,” says Mendelsohn. “Coconuts are just like oranges or any other juices, once they have been exposed to oxygen they start to go off so I guess the challenge up until a few years ago was essentially how do you crack open a coconut and package it without the product going off.
“All packaged coconut waters in Australia – like milk – are pasteurised before they’re packaged and that gets rid of all the germs, nasties and any bacteria. But ultimately, the popularity of coconut water is down to two things; the fact that coconut water can be packed, and that it provides a healthy alternative to sugary drinks.
“People have realised the benefits because coconut water is very low in sugar and has no cholesterol. There are also lot of people out there that don’t like drinking plain water, and because coconut water is slightly sweet, it provides a great, healthy alternative."
Standing out from the crowd
Raw C first launched onto the market in late 2012 and according to Mendelsohn one of the brand’s keys to success was its ability to stand out from the crowd. Mendelsohn says that Raw C searched the globe to find the perfect coconuts for its products, but ended up settling on a blend of three different types from Thailand.
“We searched high and low everywhere to find the perfect coconuts. We looked at Fiji, we looked at The Philippines and we settled on Thailand because we think that they actually taste the nicest as they are not overly sweet. We found that a lot of the coconuts that came out of The Philippines – which I believe is the biggest producer now of coconuts – were actually quite bitter. The other secret to our business is that we don’t just use one coconut variety we actually use a blend of three coconuts.
“Because we were quite late onto the market, we wanted to have a product that was different to everybody else’s. A lot of coconut waters tend to buy generic coconuts, bottle them and ship them, so there isn’t a lot of difference between the majority of coconut water brands. We wanted to make sure that we stood out from the crowd in terms of what our flavour profile was, but also by keeping the natural sugars low as some coconuts do have higher natural sugar concentrations than others."
According to Mendelsohn, the brand’s decision to omit added sugar from their product has contributed greatly the company's success, especially in Australia.
“US brand Vita Coco is the biggest coconut water brand in the world, and the difference being with a lot of the US brands is that they actually do add sugar. And the reason being that they source their coconuts from all over the place… they bottle in South America, they bottle in Asia, and to get a consistent taste they need to add back the coconut sugar.”
“The interesting thing is that (Vita Coco) tried to crack into the Australian market and have really struggled. It has a very small footprint here and that I think comes down to the fact that they do add sugar. You will find that most people that do drink coconut water are looking to drink it for the health benefits, and that’s also another reason why some of the flavoured coconut waters don’t do that well because once you start adding pomegranate, or lemon or anything like that, you are adding to the sugar – whether its natural or not."
Cracking into a saturated market
In relation to the coconut water market itself, Mendelsohn says that the reason the market has become so heavily saturated in such a short period of time is because the industry has exceptionally low barriers to entry.
“You know, you can basically get online and look for overseas suppliers and they will sell you any type of coconut water. There are so many brands on the market and there will be more brands coming onto the market every month, and I think with that consumers are starting to see the difference in quality," he said.
“We are really trying to focus on the fact that our product is premium quality… A lot of the brands that come in cans are lined with BPA, where as we use the tetra pack with a screw top lid. We also package our product in a HACCP approved factory so we follow all of the food and safety regulations – a lot of the bottling facilities up in Asia don’t meet the HACCP certification. I don’t know where the other brands of coconut waters package their product, but we were very, very careful. We visited a lot of factories to make sure that our facilities meet all the standards.”
At present Raw C produces two products; a one litre coconut water, and a 330ml coconut water. Mendelsohn says that the company is currently toying around with a few new product concepts, but has no immediate plans to release anything soon. He also mentioned that the company has been approached by a few food and beverage manufacturers locally to create new products using Raw C, however they decided respectfully decline for the time being.
“We are just concentrating on building our business. We’ve got quite aggressive plans for overseas. We just launched in Japan two months ago and its going really well, numbers are very, very positive. We have also just sent our first shipment off to South Africa and we have just sent our first shipment to Kuwait as well.”