June 26, 2009 Tropics in a Bottle

Volume 5 | Issue 2

The non-fat, highly nutritious liquid extracted from the core of the coconut is gaining recognition with consumers around the globe. Fabio N

Sipping cool coconut water out of the shell is an alluring image of life in the tropics. Amacoco’s team of 500 employees makes this pure, healthful beverage easily available to the many people who can’t get to a palm grove or beachside kiosk. From cultivating and harvesting coconuts to extracting and packaging filtered, sterilized coconut water in Tetra-Pak containers, Amacoco (which means “loves coconuts”) takes care of the whole process of bringing this clear, nutritious liquid to consumers. In addition to clients throughout Brazil, growing international demand is opening an ever widening market of foreign customers for Amacoco’s product. Amacoco, Água de Coco da Amazônia, was founded in 1995 when Grupo Regon of Minas Gerais joined with Grupo Sococo from Maceió, which each have 50 percent ownership.

Amacoco, with its first bottling plant in Belém, was a pioneer in packaging coconut water in Brazil and in the use of Tetra-Pak. It opened a second plant in Petrolina in 2002, and a third location in 2008 in São Mateu, in the state of Espirto Santo. Nino reports that Amacoco has been developing the market for packaged coconut water in Brazil with good results. He adds that coconut water is popular with Brazilian consumers, because it is of course a familiar product, but it is increasingly appreciated for its health benefits. Across the globe the appeal of coconut water’s nutritional value as well as its flavor appeal to consumers in areas where the product has not traditionally been found on shelves.

FROM SEED TO MARKET

Its plantation in Belém, in the northern state of Pará, with 800,000 hybrid coconut palm trees is the largest in the county. Irrigated by the Amazon River basin, the plantation yields 300,000 coconuts per day. A new coconut plantation in Petrolina, in the state of Pernambuco, has been revamped and will be ready for harvest in three years. Fabio Nino, Amacoco’s executive sales manager, says that in addition to producing its own coconuts, the company also works with a local farmer to whom Amacoco provides training in planting, harvest and agriculture techniques in general. He notes, “We have contracts with our producers so they are guaranteed a fair price and the security they need to invest.” These rural partnerships ensure high quality raw material and the 20 percent growth Amacoco saw in 2008 inspired the current expansion in capacity for production of coconuts in order to have enough raw material to support the increased demand.

Kero Coco and Tropi Coco are the two brands created by Amacoco in order to gain product exposure on store shelves. Currently both brands of coconut water are available in 200-milliliter, 330-milliliter and one-liter Tetra-Pak containers. Nino explains that while the product itself is the same for both Kero Coco and Tropi Coco, the brands’ marketing strategies and pricing differ and each brand has its own lines of distributors. “The two brands are actually competitors but the added presence of Amacoco products puts us in a better position for when competitors enter the market. Currently, there are only two competitors in this sector.” In addition to selling its coconut water under the brands Kero Coco and Tropi Coco, Nino reports, Amacoco also bottles its product for thirdparty brands. Currently Amacoco has six such clients.

SMALL FRIES AND A COCONUT WATER

Much of Amacoco’s merchandise is sold to major chain stores and distributors who then deliver it to points of sale such as schools, restaurants, theaters, etc. Amacoco’s coconut water is even available at McDonald’s restaurants in Brazil. Approximately 60 percent of Amacoco’s sales is made through distributors throughout Brazil, especially in the South, Southeast and Midwest, regions where fresh coconut is less available. Direct sales to major supermarket chains such as Carrefour, Walmart and Makro account for 25 percent of Amacoco’s sales. Nino explains that direct sales to such clients make sense in terms of logistics because they have centralized distribution centers, which facilitates efficient transport and storage. Around 5 percent of Amacoco’s coconut water is sold through other channels.

Amacoco has been marketing its product to clients abroad since 2000, but Nino says that exports have really taken off since 2006 as “other countries have gotten to know our product and have adopted the habit of drinking coconut water.” Currently, exports represent nearly 8 percent of volume with 90 percent of foreign clients in the United States and Japan. Nino says that sales to ortugal, Spain, Puerto Rico and Germany still represent a relatively small percentage of the company’s income but he predicts that the trend is for business with those countries to expand.

Nino is also proud that environmental friendliness is inherent in Amacoco’s business. He notes that the simple fact of cultivating trees – coconut palms, in this case – rather than cutting them down is beneficial for the environment. “We take care of the soil and maintain a healthy plantation throughout all our practices in planting, fertilizing and harvesting,” says Nino.

Subscribe to Industry Today