ON THE WATER FRONT: HOW DID COCONUT WATER BECOME THE TRENDY NEW MIRACLE BEVERAGE?

by Alyssa Giacobbe, Hemispheres-United Airlines, October, 2009, pages 51—52.


Abstract

Back in 2003, two twenty-something New Yorkers—Michael Kirban and Ira Liran discovered what will make them millionaires while drinking in a bar with two beautiful Brazilian women. They wanted to know what the women missed most about their homeland…”Agua de coco,” the women replied; the water inside young coconuts, which Brazilians drink practically from birth and revere as the most delicious and nutritious drink in the world.1

At the time, the United States was in the throes of specialty-beverage boom, with customers clamoring for “functional drinks” with ambitious names… and lofty promises of healthier, brainier, sexier lives. Looking into coconut water, Kirban and Liran learned it would fit in the category quite nicely: an 11-ounce serving…has more potassium than two bananas and 15 times more electrolytes than the average sports drink. As an added bonus, it happens to be a good hangover fix.

Vita Coco decided to bring coconut water to the US with a splash: shrew marketing was necessary in order to educate the virginal consumers. It deployed splashy vans decorated with beach scenes and no fewer than 2,000 real green coconuts. They prowl the streets of New York, Boston, Miami and Los Angeles, blaring reggae music and braking for dehydrated passerby. The company targets the younger, work-hard, play-hard types, who might enjoy what its website calls a “hydration vacation” where “bikinis are optional.”1 

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Perspective on International Entrepreneurship Aspects of “On the Water Front: How Did Coconut Water Become the Trendy New Miracle Beverage?” by Alyssa Giacobbe, Hemispheres-United Airlines, October, 2009, pages 51—52.

This article presents the all-too-familiar story of young entrepreneurial spirits (Kirban and Liran) who were restless and curious enough to not only stumble across an entrepreneurial opportunity, but most importantly, recognize it and capitalize on it. Their highly-successful $20-million coconut enterprise soon attracted followers (Zico, O.N.E.) who were eager to capitalize on the success of the two visionaries. The three competitors have masterfully segmented the market and so far exist in peace.

The story of the two New Yorkers has all the beautiful elements of a classic American entrepreneurial fairy-tale: to begin with thy are childhood friends, one of them already practicing the entrepreneurial gene by having started a software company, the other being a marketer who back in 2003 was probably rebranding himself while looking for a new job. And as it often happens in these industry “urban legends”, their inspiration for manufacturing and introducing a somewhat risky consumer product came unexpectedly and in the course of a casual social interaction (flirting to be precise.) This helps to discredit once again the popular myth that most entrepreneurs belong to the circles of crazy isolated scientists; on the opposite, having highly developed socialization skills is one of the most critical elements fro a successful entrepreneur.

Although coconut water under the “Vita Coco” brand is still sold only within the geographic frame of the United States, there is a definitely an international element to this entrepreneurial chronicle. The inspiration for the concept came from the notoriously beautiful and fit Brazilian women. Widely popular south of the equator, yet virtually unknown in the US, with only 60 calories in a 11-ounce serving and unprecedented rehydration quality, back in 2003 coconut water was the yet undiscovered frontier for the US “healthy living” fascination. Today, in big part thanks to the passion and determination of Michael Kirban and Ira Liran, coconut water has successfully entered the psyche of the US health-conscious consumer. “Coconut Water is our fastest-growing beverage segment,” says a rep for Whole Foods. “We’ve seen sales increases in the triple digits.”1

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1 Giacobbe, Alyssa, On the Water Front: How Did Coconut Water Become the Trendy New Miracle Beverage, Hemispheres-United Airlines, October, 2009, pages 51—52.

Revolutionary Ferment: Cooking Up Craft Beer that Travels

Pasteurization, developed in the late 19th century , has made packaging and shipping of liquids long distances possible. Flash freezing processing has developed the frozen food market in a large global business. Beer manufacturers are trying to accomplish the same technology breakthrough in order to develop their entrepreneurial brewing into a global business. Especially in today’s society where micro-brews are ever popular and brands like Heineken, Guinness, and Stella Artois are readily available in corner stores through the United States. Belgian manufacturers are ready to enter the market and introduce the global market to their craft brews.

This article discusses how researchers in Belgium are helping small craft brewers vary their brewing techniques in order to increase shelf life. By increasing shelf life, the brewers are hoping to increase their markets to the US and other international locations. The current shelf life of their beer is only 3 months before the chemical processes make the beer taste like cardboard. Shipping to the US requires at least 5 weeks, which greatly reduces the beer manufacturers ability to distribute and sell the beer under favorable conditions. This research can greatly affect the ability of the international entrepreneur to develop their product into a true global product. What is also interesting to note in this article is that the Belgian government is supporting this research by providing a $1.7 million grant.

Putin Sounds Welcoming Tone to Foreign Investors

During Putin’s presidency the Russian government took over a number of oil companies. In what appears to be a reversal of earlier actions b the Russian government, Vladimir Putin has indicated that the government should step back from its involvement in the economy and allow private enterprise to help Russia out of the global recession.

In a speech at a banking forum Putin reinforced assurances by his ministers and economic advisors that Russia would be open to foreign investors. In addition he praised private enterprise and indicated at the economy stabilizes further that the Russian government would continue to cede ground to private enterprises. This could lead to new privatizations of businesses in Russia.

Most noteworthy is that Putin recognized that complete governmental intervention in economies “cannot fix everything and put everything in its place.” As a result Russia has extended an olive branch to the oil companies which it had taken over earlier in the decade. Additionally Russian may liberalize the natural gas trade. This reversal comes on the heels of the economic slowdown. Previously during the oil boom Russia was awash in money, now that the tide has turned it finds itself needing foreign investment like many emerging economies.

Read the full article here.