June 26, 2009 Coconut Commerce

Volume 5 | Issue 2

Sococo, a Brazilian company does one thing and does it right. Paulo Roberto Gomes, the company’s Executive Sales Manager, talked with Lee We

Sococo, which means “only coconut” in Portuguese, is a Brazilian company that produces a wide array of products, all coconut-based. Founded in 1966 in Maceió, in Alagoas state, Sococo got off to a prodigious start, opening with the largest and most modern factory of coconut-based products in the world. Since 1982, it has been under the umbrella of the Grupo Sococo, a group of sugar and ethanol businesses.

Sococo S.A. Agroindustrias da Amazonia has a complex of coconut plantations and factories near Belém, in the state of Pará in Northern Brazil, while the company is run from its headquarters in Maceió, in the state of Alagoas. Every step of the process, from field to factory, is part of Sococo’s business. All raw materials are initially processed at the plant in Mojú then moved to the plant in Ananindeua. There, the fiber from the coconut shells is removed and sent on to Amafibra, another of Grupo Sococo’s companies that uses the fiber to make soil. The coconut meat is then grated and dehydrated and delivered to Maceió to the Sococo S.A. Indústrias Alementicias plant where it is stored in bulk bags before being rehydrated and utilized in the final product. Demand for Sococo’s products is so great that the company must supplement the coconuts it grows with some purchased from other producers. It cultivates approximately 85 percent of the raw material – coconuts – needed for production while the remaining 15 percent is purchased from cultivators in Northeastern Brazil.

PUT THE SOY IN THE COCONUT

Sococo not only uses the whole coconut, the company has also recently branched out to include soy and fruit in its products. The two newest innovative juice products are Soysuco, a soy-based natural fruit juice that has been on the market since 2007 and Sococo Mais, coconut water with a hint of fruit juice, on shelves since 2001. Sococo Mais, now available in tangerine and soon to be made with passion fruit, is the only such product on the market while Soysuco is competing with a similar product put out by Unilever. Of course, the bright red Sococo brand can be found on packages of more traditional coconut-based goods like grated coconut, coconut milk, coconut water and coconut candy. Sococo’s products are processed and packaged with extreme care and attention to hygiene using latest-technology equipment and Tetra Pak packaging.

Sococo’s coconuts are not limited to Sococo’s own goods: a portion of the company’s coconut is sold to other companies for use as an ingredient in their final products like cookies, ice cream, granola bars and chocolate among others. Paulo Roberto Gomes, Sococo’s executive sales manager, reports that the company is developing more value-added products. He says, “We are looking for and researching ways to better use coconut meat in the food area.” In addition to ingredients such as soy and fruit, coconut oil, currently sold principally to the cosmetics industry, is being investigated for use in food products.

Homemakers who prepare all sorts of tropical treats are the target consumers for Sococo’s coconut milk; coconut water and the soy-based line are marketed to older, health-conscious adults, and the fruit-flavored coconut water blends are aimed at the teen market. In broader terms, 73 percent of Sococo’s earnings come from commercial sales: 35 percent from distributors and 30 percent from direct sales to supermarkets such as Carrefour and Pão de Açúcar. Eight percent of the company’s sales are to small-scale buyers. Sococo’s reach is indeed wide and Gomes points out: “We are on the shelves in every important supermarket chain and have sales representatives in every state in Brazil.” Nearly a third of Sococo’s income is generated through sales to industrial clients such as Nestle, Garoto, Parmalat, Unilever and Bauducco, who use Sococo’s coconut in their products.

MAKING INROADS TO THE OUTSIDE

Brazil is the focus of Sococo’s marketing but a small portion of sales are made outside its South American borders. The company’s coconut products find their way to customers in the United States, France, Belgium, Portugal, Japan and Spain. Gomes sees the fact that coconut in these countries is generally found in cosmetics but not on the table as a challenge. He says, “We are still developing our strategies for promoting coconut water for its appeal as a healthful beverage but are involved in the domestic market.” Amacoco, part of Grupo Sococo, is more focused on exports, mainly to the United States.

Naturally, a company like Sococo that depends on trees for its livelihood must have an environmental conscience. In addition to planting coconut palms, Sococo makes a concerted effort to preserve natural forest lands. Gomes boasts, “Of the 20,000 hectares on our plantation, 13,000 are untouched Amazon rainforest and we plan on leaving it that way.”

Such values also extend to human resources: Sococo has won awards for treatment of employees and has been cited as a model in terms of personnel relations. The company’s profit distribution program for its employees is evidence of this. “On both regional and national levels Sococo is respected for quality,” Gomes says, adding that the company is a sought-after employer because of the opportunities it provides for employees to move up the ladder.

SOLID ROOTS AND UPWARD GROWTH

The past five years were positive for Sococo, which grew an average of 20 percent annually. Management believes that the company is poised for more good results ahead. Gomes says that despite the current economic pinch, the expectation is at least 10 percent growth in 2009. In fact Gomes asserts that “all investments planned for 2009 are being maintained and we even expect to expand our workforce.” This year Sococo has already added 100 employees to its team of 4,000.

Sococo will be shaking things up on supermarket shelves in the coming months. Gomes confirms that “our administration is now seeking to invest in ready-to-eat and ready-to-drink products like Soysuco. We’re working on coming up with new flavors and packaging and hope to create a family of flavored coconut water products.” He adds that the company has made investments and even recently created a new division focused on ready-to-consume products and it expects to see hearty growth in this area as well as in sales of Soysuco. “We are leaders in the market, with over 50 percent participation in the market of coconut-based products in Brazil. We are still small in the soy sector but plan to improve our positioning in this market.” We can look for this “only coconut” company to be spreading its roots as well as branching out in the future.

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