---
title: "Behind the Sudden Rise of Vita Coco Coconut Water"
description: "“Water grown on trees.” Overnight, this phrase occupied a large amount of advertising resources on highways, subways, and building elevators. The product promoted by these ads is coconut water from the American brand Vita Coco. The high exposure of the ads brought coconut water into the view of Chinese consumers for the first time. Looking back at the route of Vita Coco's entry into China, Hua Bin Group is the behind-the-scenes operator—when the Thai Red Bull brand authorization was about to expire and renewal was uncertain, Hua Bin Group introduced Vita Coco coconut water and placed high hopes on it. Is its sales as booming as the ads? Can it become the second Red Bull?"
author: "方彬楠 王子扬"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-08-19"
language: "en"
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# Behind the Sudden Rise of Vita Coco Coconut Water

> “Water grown on trees.” Overnight, this phrase occupied a large amount of advertising resources on highways, subways, and building elevators. The product promoted by these ads is coconut water from the American brand Vita Coco. The high exposure of the ads brought coconut water into the view of Chinese consumers for the first time. Looking back at the route of Vita Coco's entry into China, Hua Bin Group is the behind-the-scenes operator—when the Thai Red Bull brand authorization was about to expire and renewal was uncertain, Hua Bin Group introduced Vita Coco coconut water and placed high hopes on it. Is its sales as booming as the ads? Can it become the second Red Bull?

“Water grown on trees.” Overnight, this phrase occupied a large amount of advertising resources on highways, subways, and building elevators. The product promoted by these ads is coconut water from the American brand Vita Coco. The high exposure of the ads brought coconut water into the view of Chinese consumers for the first time. Looking back at the route of Vita Coco's entry into China, Hua Bin Group is the behind-the-scenes operator—when the Thai Red Bull brand authorization was about to expire and renewal was uncertain, Hua Bin Group introduced Vita Coco coconut water and placed high hopes on it. Is its sales as booming as the ads? Can it become the second Red Bull? Yesterday, a Beijing Business Today reporter conducted an investigation.
**◆ ◆ ◆**
Advertising Marketing Successfully Attracts Attention
What is the difference between coconut water and coconut juice? Coconut water is the liquid endosperm inside the coconut's nut cavity, belonging to fruit juice, with a flavor tending toward natural coconut water; while coconut juice is made by squeezing coconut meat, belonging to plant protein beverages, and is basically a processed beverage.
For this reason, the advertising slogan “water grown on trees” is very apt. Recently, whether driving, taking the subway, or riding an elevator, people can always see Vita Coco ads. For example, on the Jingzang Expressway, there is a striking Vita Coco coconut water billboard every few kilometers, and also at gas stations; in the subway Xidan station passage, a large wall is covered with a huge ad... This simple and crude FMCG-style advertising marketing successfully attracted consumers' attention. Thanks to the overwhelming advertising, Vita Coco coconut water quickly became a hot topic among consumers; on social platforms, there is no lack of promotion by users with many followers.
A Beijing Business Today reporter noticed that Vita Coco's investment in marketing is not small. For example, at subway stations like Xidan, which have large passenger flow, they are classified as S-level, and the corresponding advertising costs are higher than other stations. After checking the rate cards of relevant advertising agencies, the reporter found that at Dongdan Station on Line 1, also S-level like Xidan, the price for wrapping 16 pillars is 1.1 million yuan for 4 weeks, with platform prices slightly higher than passage prices. It can be seen that Vita Coco's advertising at Xidan costs at least several hundred thousand yuan.
In addition to highways and subway stations, Vita Coco also invests in elevator ads, which are not cheap. An industry insider revealed that Vita Coco's elevator ad investment is nationwide; according to the published price of 928 yuan per block per week, it has already exceeded 100 million yuan. Taking Beijing as an example, although there are discounts in actual investment, it costs at least 200-300 yuan per block per week. If calculated at the minimum, the monthly advertising cost is 120,000 yuan. Zhu Danpeng, a researcher at the China Brand Research Institute's food and beverage industry, believes that Vita Coco coconut water is still in the brand cultivation period and needs corresponding investment to build its visibility.
**◆ ◆ ◆**
Sales Not as Expected
It is normal for a new product to be promoted so vigorously. In fact, behind the overwhelming promotion, there is another deeper meaning. This starts with Vita Coco's entry into China. In 2014, Hua Bin Group invested 25% to jointly establish a Chinese company with Vita Coco, a coconut water brand holding 60% of the U.S. market share, officially entering the Chinese market. The reason is not simply to expand the product line. For years, Hua Bin Group has insisted on only doing the Red Bull brand in beverages; under meticulous cultivation, Red Bull has become a leader in similar drinks. This year, the Thai Red Bull brand authorization to Hua Bin Group is about to expire, and whether it will be renewed is still unclear. This move is also seen by the industry as a helpless move by Hua Bin Group.
So how is the sales of this strategically important product for Hua Bin Group? Some media reported that in 2015, Vita Coco coconut water sales reached 100 million yuan. Zhu Danpeng analyzed that according to the industry's “3+3+4” sales convention, of the reported 100 million yuan sales, 30 million yuan is sold, 30 million yuan is in distributor inventory, and the remaining 40 million yuan is still in terminal inventory. To verify, the Beijing Business Today reporter made multiple calls but could not reach the relevant person in charge of Vita Coco.
Yesterday, during 16:00-19:00, the regular shopping peak on weekdays, the reporter visited large and medium-sized supermarkets such as Yonghui Superstores, Jingkelong, Shouhang Supermarket, Carrefour, as well as many convenience stores and small supermarkets: Vita Coco coconut water was on shelves in most large and medium-sized supermarkets, but within the 3 hours of the investigation, few buyers were seen; it was hard to find in convenience stores and small supermarkets.
After comparing three online sales platforms—Tmall, JD.com, and Yihaodian—the reporter found that on Tmall, a 330ml×12 pack of Vita Coco coconut water costs 120 yuan, with monthly sales of 2,008 units; based on this data, monthly sales could reach 240,000 yuan. On JD.com, there is no sales data, only 180,000 reviews; if each review is counted as a purchase, then at least 180,000 units were sold after listing; calculated over a year, that is 15,000 boxes per month, with monthly sales of 2.4 million yuan. On Yihaodian, 328 units of this product have been sold, at 128 yuan per box, totaling 41,984 yuan.
Clearly, Vita Coco coconut water's sales are not as booming as its ads. Such sales volume seems insufficient to fill the funding gap from the initial advertising investment.
**◆ ◆ ◆**
Hard to Become the Next “Red Bull”
Although Vita Coco is experiencing sales pains, it is undeniable that Hua Bin Group's promotion of Vita Coco coconut water, based on years of experience operating Red Bull, has indeed had some effect. Zhu Danpeng believes that at this time, Vita Coco needs to promote its brand so that more people understand and accept it; considering sales at this point is premature. For a new category to gain a foothold in the market, it must go through a transition period, during which large-scale market promotion is needed to achieve results. But the future direction depends on its product strength.
Only products recognized by consumers are competitive. What is the level of consumer acceptance of Vita Coco coconut water? The reporter randomly interviewed several consumers. Consumer Mr. Zhang said, “Isn't coconut water just coconut juice? I haven't bought it; spending ten yuan on a bottle of water is not worth it.” Another consumer, Mr. Zhong, who had seen Vita Coco ads, said, “I saw the ads on the subway before, and later bought a bottle at the supermarket to try; the taste was hard to accept.” When asked whether they would consider the product in future shopping, the consumers all answered “no.” Although the sample of consumers surveyed by the reporter is not large, it still reflects some problems to a certain extent.
In addition to the consumer side, industry competition has further intensified. After Hua Bin introduced Vita Coco, many domestic and foreign companies have joined the competition for coconut water market share. In May this year, Coca-Cola launched ZICO coconut water on its Tmall flagship store with high profile; Hainan Yeguo also launched its own coconut water product; domestic beverage giant Tianwo followed with Puer Coco. Many brands have entered the Chinese market, and domestic brands have also imitated producing coconut water, putting Vita Coco under multiple pressures. Industry analysts say that Hua Bin Group's successful operation of Red Bull previously relied mainly on the macro environment and wild growth; at that time, market competition was not intense, so it did not experience market baptism.
“Vita Coco coconut water is also hard to become the second Red Bull.” In Zhu Danpeng's view, as a new product, coconut water's future is still positive. Since Red Bull's authorization will soon expire, Hua Bin Group's vigorous promotion of Vita Coco may be an attempt to make Vita Coco the second Red Bull. Although Hua Bin Group has gained the first-mover advantage in marketing, under the coconut water sales boom, Vita Coco faces much more competition than Red Bull did back then.
As of press time, the reporter still could not reach the relevant person in charge of Vita Coco.
Source: Beijing Business Today
-END-
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