---
title: "The Mocked Yet 4 Billion Yuan Annual Sales of Coconuts? 90% of Chinese Brands Should Learn from It!"
description: "Following Coconuts' final statement that its slogan 'Drinking it since childhood' does not violate advertising laws, the controversy has subsided. Despite mockery of its tacky design and double entendre, the brand's 4 billion yuan annual sales and strategic decisions offer valuable lessons for Chinese brands."
author: "杨双喜 导师/王超"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2019-03-02"
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# The Mocked Yet 4 Billion Yuan Annual Sales of Coconuts? 90% of Chinese Brands Should Learn from It!

> Following Coconuts' final statement that its slogan 'Drinking it since childhood' does not violate advertising laws, the controversy has subsided. Despite mockery of its tacky design and double entendre, the brand's 4 billion yuan annual sales and strategic decisions offer valuable lessons for Chinese brands.

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With Coconuts' final statement landing—"Drinking it since childhood" does not violate advertising laws—the Coconuts hotspot has temporarily come to an end. The various debates online almost all revolve around the pun nature of this slogan, Coconuts' rustic product design, and affirmation of its taste...
Whether we mock Coconuts, find it rustic, or tease its decline... from a marketing perspective, we should not overlook the story behind this national brand with annual sales of 4 billion yuan...
**01**
## **Coconuts' Achievements Deserve Recognition**
For a successful flower, people only marvel at its brilliance when it blooms, not allowing it to touch any mud, otherwise they attack it collectively, but they ignore the history of how this seedling broke through thorns to become a flower. Today, we do not talk about Coconuts' rusticity or its flirtatiousness, but rather see through the surface to the essence: identify the key decisions Coconuts made correctly to become a dominant player during the 30 years when domestic brands were largely dying out. Using bronze as a mirror, one can straighten one's attire; using history as a guide, one can know rise and fall.
In China, successful brands always have a trouble: there are always people who, with various purposes, openly or covertly put obstacles in the brand's way. They always strive for the brand to conform to all their preferences: quality, cheapness, voice, and contemporary taste.
If you are not an entrepreneur and have no commercial pursuits, then just laugh it off. If you expect to grasp the strategic path for rapid brand growth, it is recommended that you do not rush to sneer at Coconuts. After all, Coconuts not only survived the 30-year beverage revolution without becoming a caged discard of international giants, but also grew into a towering tree in the coconut juice category.
Indeed, Coconuts' packaging somewhat defies contemporary aesthetics, and its communication strategy is both unconventional and full of innuendo. But can Coconuts, after 30 years of trials and tribulations, achieve over 4 billion yuan today solely through these flashy operations?
The answer is: impossible. Especially in the fiercely competitive beverage industry.
**02**
**Fruit-based beverage brands that never grow up**
Before discussing Coconuts, let's first talk about the history of the demise of Chinese beverage brands.
Compared to international century-old brands led by the United States, Chinese beverage brands have only stumbled along for less than 30 years. Essentially, China's food and beverage industry, whether in product quality, production management, business models, or brand marketing, still lags significantly behind developed countries such as Europe, the United States, and Japan.
In China, before the opening of ports, beverages were never mass-market products. Even soda made with flavorings was a rarity that only the "tycoons" of that era could afford. Today, many mainstream beverage brands' production processes, industry standards, and marketing methods are products that developed countries have eliminated several generations ago.
Abroad, it is a completely different scene. For example, in Australia, 100% pure juice with no additives (Chinese mainstream juice brands typically have juice content between 30%, 20%, 10%, and 5%) is cheap and healthy, and parents encourage children to drink it like water. In China, it is the opposite: urging children to drink less beverages and more boiled water is a "achievement" that the Chinese food and beverage industry should collectively reflect on.
Why? Because everyone thinks that even milk cannot be safely bought for children, let alone beverages. When it comes to letting children drink more beverages, heads shake like rattles, indicating that the first perception of beverages is unhealthy, associated with various additives and certain horrifying negative rumors.
We can see the origin of this perception from several cases of beverage brands being acquired and shelved, marginalized, bankrupted, or even dying out:
> **1\. Brands that played with fire in quality**
Sanlu was once a dominant dairy producer in China, developing a full chain from infant formula to dairy beverages. After the melamine incident, it was permanently banned.
> **2\. Brands that died from overconfidence, blind expansion, and brand extension**
Xurisheng, Robust, Tianwo, and Coconuts' rival Yefeng. Many brands launched so-called "innovative products" that ran counter to consumer needs, unable to grow or survive. In many enterprises that emphasize marketing over R&D, there is no concept of category; any product is just a tool for monetization. They wave a big banner to recruit distributors and distribute goods, completely ignoring why consumers buy or not. After three months without sales, they switch to the next product, and so on.
> **3\. Brands naturally eliminated by health needs**
Daheng Fruit Tea, Beijing Ice Soda, Bawang Temple, Zheng Guanghe, Zhenzhen, and various flavored beverages.
> **4\. "Creative beverages" that violate cognition and deviate from consumer needs**
Such as Zheyang Zi, Coffee Cola, Beer Tea Shuang, K Ke, Fifth Season, and various bizarre drinks.
> **5\. Imitation brands acquired and shelved or squeezed out by foreign capital**
Fenghuang Cola, Future Cola, Tianfu Cola, Asia Soda, Beijing Ice Soda, Bawang Temple, Robust, etc.
**"Poor quality, products not keeping up with the times, low brand operation level, reckless expansion, violating cognition, being acquired, being shelved, and reckless development"** are lingering labels attached to Chinese beverage brands that have died or are about to be eliminated.
Delving into the reasons behind this, how can the word "backwardness" fully summarize it? One step behind leads to being behind at every step. Domestic beverage brands superficially lag behind foreign brands in technology, safety standards, production processes, management, and capital capabilities, but essentially it is the result of collective incompetence in brand marketing and operational capabilities.
In short, many domestic beverage enterprises generally lack the ability to continuously innovate and reconstruct value as consumer upgrade needs and cognitive levels improve.
Each category has a large number of brands with different standards, creating chaos. Passing off inferior goods as superior and bad money driving out good is rampant. Frequent food quality and safety accidents have led consumers to generally lack basic trust in domestic beverage brands. The one-sided pursuit of entertainment-oriented beverage marketing has hindered people from establishing correct perceptions of nutrition, convenience, and functionality. The entire beverage industry has long been trapped in a vicious cycle of weak demand, weak value perception, low consumption stickiness, and low-frequency consumption. Old brands have high elimination rates, and new brands have low survival rates. The mismatch between brand capability and customer demand is common.
After reading this, we believe you have already developed some respect for Coconuts' enduring presence.
**03**
**Coconuts' difficulty is like planting cherries in the desert**
First, let me tell you that brand marketing for the coconut juice category is extremely difficult.
Why? **Because the essence of a category is the representation of customer needs. Whether a category can grow depends on how many people need its value.**
For example, when choosing shampoo, the need for smooth hair drives consumers to choose shampoos that solve the problem of smooth hair. The need for fuel-efficient cars drives consumers to choose Japanese cars. The need for bleeding gums drives potential consumers to choose toothpaste that prevents gum bleeding.
So, the degree to which a category is needed, the specificity of its value, the breadth of demand, the stability of demand, and the frequency of being needed directly determine whether a beverage category is easy to do, how large it can scale, and how substitutable it is.
This is an analysis at the demand level. There is also the degree of popularization of category value cognition: many categories have inherent value cognition. For cars, energy efficiency, reliability, off-road capability, and comfort are highly valuable cognitions. For tangerine peel, there are cognitions of aiding digestion, dispelling dampness and phlegm, and promoting diuresis and bowel movement.
**If demand is the mother of a category, cognition is the father.** In the plant protein beverage category, there is an unbroken curse: "Northern Lulu cannot cross the Yangtze, Southern Coconuts cannot cross the Yellow River." Among plant protein beverages, only Six Walnuts has become a super unicorn that is popular nationwide. The difficulty of coconut juice lies in consumers not remembering when to drink it, and there is no value anchor in cognition to leverage. The only thing to do is continuously consolidate the good taste, increase consumption scenarios in the base, and of course, continuously try the "white, tender, plump, drinking since childhood" functional appeals that are full of innuendo.
Weak demand that is optional means it is difficult to expand sales regions and consumer groups. Customers do not know when they need it, making it hard to generate high-frequency purchase behavior. Low-value cognition and consumption habits firmly bind the northward expansion of coconut juice.
Since its birth, coconut juice has been like an orphan without parental support, alone going to the Gobi Desert to plant cherries. Now the soul-searching question arises! With such difficulty, how did Coconuts achieve today's results?
**04**
## **Coconuts' Textbook-Level Strategic Decisions**
> ### **1\. Abandon the "crutch" of specialty products and step out of the comfort zone**
First, let's clarify why specialty products are the comfort zone for agricultural and sideline food brands. Take tartary buckwheat tea as an example.
Tartary buckwheat tea truly formed scale only in the last decade. It is popular in Sichuan, Chongqing, Guizhou, Yunnan, and western Hubei. Many brands have spent great effort promoting tartary buckwheat tea. But the vast majority of enterprises rely on specialty as the primary driver. This product, with its fragrant taste and function of removing oil and greasiness, from a demand perspective, has the potential to become a national brand through fast-moving consumer goods practices.
But the first market most enterprises think of is selling outward through "specialty-ization," combined with regional tourism consumption and gift markets, which is indeed the first foothold for market sales. However, the concept of "specialty" may also be a "fatal" limitation restricting the growth of tartary buckwheat tea, and to this day, no national big brand has emerged.
Not only tartary buckwheat tea, but also many specialty breeding industries and deeply processed agricultural products rely heavily on the specialty marketing model. How to find unique value beyond specialty, how to find cognition and consumption scenarios and sales channels that leverage demand? After multiple attempts and setbacks, everyone invariably returns to the warm embrace of specialty. **Many brands have turned from a starting point of specialty into habitual dependence, unable to extricate themselves.**
As Hainan's number one specialty agricultural product, coconut has not escaped this fate. Whether it is coconut juice or a large number of sideline agricultural products, they still treat specialty as the primary blood-making market. But since its birth, Coconuts has strived to shake off the "specialty" label and bravely go out. Without this key decision, the overall scale of coconut juice would still be hovering below 1 billion yuan, and you would have to wait for traveling friends to bring you coconut juice.
This decisiveness is worth learning from for many enterprises. **A company that seeks stability finds it difficult to set its sights nationwide from the start. We often say that strategic height determines a company's fate. In an era when flavorings could make fake coconut juice, only Coconuts was the first to make "pure, zero-additive" a strategic foothold.**
> ### **2\. Emphasize R&D, downplay imitation, and build a technological barrier**
Change the dependence on imitation products, develop world-first products, and build a barrier against foreign beverages.
In the late 1980s and early 1990s, foreign carbonated beverages were all the rage in China, and Coconuts once followed suit. But due to the competitive strategy of "short-term losses to capture the market, long-term monopoly for big profits" implemented by giants like Coca-Cola and Pepsi, Coconuts suffered successive defeats. Of the eight major carbonated enterprises in China, seven were successively brought down or swallowed by foreign beverages. This is the famous "Water Flooding the Seven Armies" in beverage history.
During the brand's founding period, Coconuts made multiple attempts at product diversification. Now the Coconuts Group has 16 branch companies, from natural mango juice to recently launched soy milk, calcium milk, herbal tea, and fruit juice drinks. Over more than a decade, it has launched over 100 beverage varieties.
After seeing the drawbacks of the follow-the-leader strategy, **after painful reflection: "Not developing our own products, not creating our own brand, and relying on imitation is untenable. Only by leveraging our strengths and avoiding weaknesses, based on Hainan's resource advantages, and developing a national brand with independent intellectual property rights can we enhance competitiveness and compete with foreign beverages."**
They implemented a heavy reward policy for scientific and technical personnel and successfully developed over 100 beverage products, including Coconuts brand natural coconut juice. Among them, the leading product, natural coconut juice, was developed through 383 relentless experiments. It was confirmed by the China Science and Technology Information Institute through international online retrieval of multiple documents from around the world to be "world-first, China's unique." In 1995, it was awarded the "China Patent Invention Creation Gold Award" and invention patent by the Philippines, Malaysia, the World Intellectual Property Organization, and the China Patent Office, and was designated by the State Science and Technology Commission and the State Secrets Bureau as the only national-level confidential product in the beverage industry.
A certain foreign beverage also set up a factory in China to produce coconut juice to compete with them, but ultimately failed due to poor product quality and was eliminated by Coconuts.
To judge whether a brand can succeed, look at whether the enterprise has the idea of making quick money. The first step to steady progress is to establish your own competitive barrier. With its "natural, pure" technological advantages, the Coconuts brand fiercely competed with domestic and foreign opponents, broke through the encirclement of world-renowned brands, and exported products to 35 countries and regions, becoming one of the few Chinese iron troops capable of resisting foreign beverages.
> ### **3\. Seize the first consumption essence of coconut juice and occupy the first value**
But technology alone is not enough; technology can only serve demand, otherwise even the best technology can only lie in the laboratory without being monetized. The strategic point of this is often overlooked by many entrepreneurs. When we talk about "consumption essence" and "first value," why should technology serve these two indicators?
As mentioned earlier, **the essence of a category is the representation of demand. Each category has its own essential characteristics, which to some extent represent the value focus that consumers care about.** For example, the essence of walnut milk is a functional beverage beneficial to the brain. Its first value comes from people's cognition of walnuts as "brain-boosting." If we treat walnut milk as a flavored beverage, we erase its greatest market value. Therefore, conducting technical research around the needs of "walnut nutrition" and "convenient brain-boosting" is the first value that best fits the consumption essence.
For coconut juice, which has weak demand and weak value cognition, **the only first consumption essence that can be grasped is "good taste" and "health," and health and good taste stem from the value attribute of "authentic coconut juice" that is "zero-additive and pure natural."**
Zero-additive, pure natural authentic coconut juice is the position that Coconuts has the strength and must defend. Among the many followers that came later, some said "raw pressed," some said "first extraction," but none could shake Coconuts' position. Why? Because people do not have many divisions of needs (cognition) for coconut juice. No matter how they attack Coconuts in areas where consumers do not need, it is ineffective.
So, in the recent storm of controversy, customer comments hit the nail on the head:
Let's clarify the logic: customers' first need for Coconuts + natural zero-additive technology = good taste. Thirty years of persistence can accumulate value in the market, but even the best value needs an excellent brand name to carry it.
> ### **4\. The brand name has a monopoly constitution**
Regardless of how the Coconuts brand was decided, we must say that the two characters "椰树" (Coconut Tree) in the brand name are inherently monopolistic.
"Authentic" and "zero-additive, pure" have two associations: one is origin, the other is raw material source. For a startup brand, if the name does not match the product's first value and cannot capture the customer's first need for the category, it is difficult to generate purchase behavior.
Suppose "Six Walnuts" for walnut milk did not use that name, but used "Dafa" as the brand name. Even if they spent a lot of money advertising on major media, consumers would find it hard to recognize it as an authentic brand with real ingredients and brain-nourishing nutrition. The visual imagery and natural associations of Coconuts, to some extent, fit this rule.
**A brand name can only serve one dominant strong category. Similarly, packaging strategy is also one of the difficulties that tests operators' strategic decision-making ability.**
> ### **5\. Incubate packaging materials into visual assets**
One of the controversies of Coconuts packaging is the rustic packaging material: among beverage packaging that relies on fashionable appearance, Coconuts' big, black, thick can drives many perfectionists crazy. But why hasn't Coconuts upgraded?
The answer is simple: after 30 years of persistence, the iron can's mission has long evolved from a packaging container into a recognition symbol of "authentic coconut juice" in consumers' minds.
**Whether a category is truly accepted by the market, the symbolic nature of packaging recognition is an important criterion.**
Before making a purchase decision, consumers judge category value entirely based on packaging and materials: Tetra Pak was initially endowed with the value of "aseptic packaging" by milk brands, and over time, people classified Tetra Pak as an exclusive symbol of milk; oak barrels were endowed with the symbol of "art, taste, and status" by wine manufacturers, and oak barrels evolved into the iconic packaging symbol for identifying top-grade wine.
Visual symbols have primary and secondary levels. As a beverage that needs to be stored at room temperature, before people truly experience the product's value, the highly sealed iron can allows consumers to judge the basic attributes of the category from the packaging: this is a beverage that has been sterilized at high temperature. At least from a hygiene perspective, it generates a certain sense of trust in the category. The short-term purpose is to reassure the public to drink it. In the long run, after 30 years of persistence, the black can has incubated into an important packaging recognition symbol for judging the coconut juice category. As the leading brand in the coconut juice category, Coconuts is naturally the biggest beneficiary.
> ### **6\. Turn packaging into a salesperson on the shelf**
The second major controversy of Coconuts is its rustic packaging, which is teased as being designed with Word. It has been criticized but never changed significantly. When the 2019 New Year bell rang, Coconuts made a "adjustment" to its packaging as scheduled. On the bottle, the large font "30 years of persistence in Hainan Island" among the dense product information was changed to "31 years of persistence in Hainan Island."
Public information shows that in 1957, Coconuts' leader Wang Guangxing's first job was as an art designer. A year later, Wang Guangxing joined Haikou Canned Food Factory and spent 12 years there until age 28. During that time, he personally designed and completed Coconuts' packaging design.
In fact, Coconuts' current practice of "listing product advantage information" is not new. In the eyes of every enterprise founder, the product is their own son. How can these advantages highlight brand value without advertising investment? Packaging becomes the first breakthrough!
What makes Coconuts different is that it expresses product advantages with straightforward text lists in black, white, and yellow, which is almost "anti-human aesthetics." When placed on the shelf, the rustic packaging immediately creates an extreme visual impact compared to competitors' packaging.
So, what is the origin of Coconuts' text listing?
**The essence of packaging is a dialogue between consumer demand and product value:**
**Beauty is not the first value of packaging; information dialogue is.** You must assume there is no advertising budget and few salespeople. Throw this packaging into the channel, and it must be able to convince buyers on its own. Therefore, packaging design is often a work of re-developing product value, using packaging design to define product value and empower the brand. Because packaging bears the responsibility of being discovered, picked up, and purchased.
**For brands without advertising, packaging is the first strategy.** Humans understand things like infants, relying on visual, auditory, olfactory, taste, and tactile senses, among which eyes and ears account for 80% of sensory experience. In a noisy store, you cannot set up a loudspeaker to tirelessly promote product value, so the visual that moves consumers bears all the sales responsibility.
For example, when I buy laundry detergent, I habitually start from my most urgent needs: is my clothing sweat-stained? Is it yellowed? Is it heavily soiled and needs strong stain removal? Does white clothing need whitening? At this point, the packaging information of the laundry detergent must provide sufficient product value information to persuade me to choose it.
Similarly, in the early stages when coconut juice was not well known, without resources for advertising and low brand awareness, packaging became the only "advertising medium" available, and it was a medium that did not require additional media purchase costs. So, compared to style and aesthetics, the text on packaging becomes more important; packaging must continuously amplify the reason to buy.
Let's sort out the self-promotion rhetoric of rustic Coconuts to see the clues:
First, the brand name "椰树" not only conveys the brand name but also clarifies that the product's raw materials are natural;
Second, "30 years of persistence in Hainan Island" reinforces the information of "authentic, classic, old brand," resolving consumers' trust doubts;
Third, "using fresh coconut meat" specifies "coconut tree" to "coconut meat," allowing consumers to associate with the sweet taste of coconut meat, awakening taste memory and inducing further orders;
Fourth, "freshly squeezed" is a process description that further awakens taste memory, meaning "the taste is the same as the coconut meat you remember," conveying a sense of freshness and quality;
Fifth, "no coconut paste, no flavoring, when raw pressed" is a concrete description of the process, while attacking and implying that competitors are "fake fresh, unhealthy" products.
At this point, **Coconuts can quickly awaken customers' taste memory through text alone, highlighting authenticity and excluding competitors. This is the lowest-cost strategic self-promotion tactic to date.** Who wouldn't want to use such a low-cost promotion strategy?
This simple and crude packaging of Coconuts has long occupied user minds, becoming the representative of authentic, honest, safe, and high-quality coconut juice. As for why Coconuts does not change to packaging that better fits contemporary aesthetics after establishing the brand, the reason is simple: the reason to buy Coconuts coconut juice is still strong. Aesthetics cannot affect a product's sales, but text can.
> ### **7\. Keep pace with the times to create topics and extend category vitality**
>
The third major controversy of Coconuts is its flirtatious functionality. Why did Coconuts transform from a serious uncle to a seductive vixen?
The "honest uncle" Coconuts, which has been around for 30 years, also has a restless heart. Just turning 30, Coconuts has passed the age of establishment and looks like a brand that needs to pay its own Huabei (credit) bills.
How to understand this? As mentioned above, Coconuts is a brand "planting cherries in the desert." Without staying in the specialty comfort zone, Coconuts not only has to find food for itself, **but also shoulder the heavy responsibility of long-term category development.** However, long-term means needing to be noticed, remembered, and purchased by consumers over a long period.
Beverages are a rapidly changing industry. Every year, hundreds of new categories and brands compete for three feet of shelf space in stores, not to mention the stable traditional strong categories and brands. As a category with low demand, low value cognition, and low purchase frequency, coconut juice naturally lives in fear every day. As the leading brand in coconut juice, Coconuts must have strong enough ability to extend the life cycle of coconut juice, otherwise it will follow the fate of iced black tea—being relegated to the cold palace.
That is why there is the motivation to withstand the pressure of being China's "most rustic, most eye-straining" brand, and why topics like whitening, beauty, breast enhancement, longevity, children growing taller, and even aphrodisiac effects are continuously "manufactured." Perhaps the leader of Coconuts has already understood the principle that extreme beauty becomes immortal, and extreme rusticity becomes cute. Perhaps they really educate consumers that drinking more coconut juice has these functions, but the ultimate goal is only three: **maintain category attention, expand influence; expand consumption motivation, increase sales opportunities; maintain brand authority!**
**05**
## **What should Chinese brands learn from Coconuts?**
Coconuts, which was not killed by international brands, has been continuously correcting people's almost distorted perceptions of nutrition, convenience, and functionality of beverages against the backdrop of consumers' general lack of trust in domestic beverages. It strives to lead domestic brands out of the vicious cycle of high elimination rates for old brands and low survival rates for new brands. Although the methods are eye-catching, it is still an enterprise worth learning from.
**1\. Health-first business philosophy.** If you value consumers' quality and health needs, even if you are rustic, you can be understood as a "pragmatic brand." The core of Coconuts' success lies in truly providing consumers with healthy products that benefit body and mind. Marketing is just superficial tricks. Smart people will not and should not be blinded by these "mockeries."
**2\. Bravely establish standards, do not earn dirty money.** All international beverage brands entering China have unanimously abandoned the strict standards of developed countries and adopted secondary standards slightly higher than Chinese competitors to make big profits. Coconuts, from the beginning, established quality standards higher than international standards. This move not only tests the core competitiveness of the enterprise but also tests the moral standards of an enterprise's social responsibility.
**3\. Do not blindly follow, do not be impetuous, and have a pragmatic spirit.** Actively step out of the specialty comfort zone, dare to try and break through; do not be shaken by the fog of trends, understand the importance of brand focus; understand how to grasp consumers' core needs, and do not give up the goal of building a long-selling brand for the sake of image illusions.
**4\. Bravely shoulder the responsibility of expanding the category.** Coconuts' greatest value to the coconut juice industry is that it achieved brand marketing at the market end, industrialization at the processing end, and ecologicalization of the upstream industry, driving the upgrade of the entire industry. This is not just making coconut juice; it is making an industry.
Source: Marketing Less Detours (ID: yangshuangxi2015)
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