Liq­uid gold, in a nut­shell

China Daily (USA) - - LIFE - ByWANG ZHUOQIONG wangzhuo­qiong@chi­nadaily.com.cn

Co­las, sug­ary drinks and other much-ma­ligned bev­er­ages of their ilk are feel­ing the heat not just of the sum­mer but from the rise of newage pack­aged liq­uids that are nat­u­ral, health­ful, harm­less or vi­ta­m­in­for­ti­fied.

And con­sumers such as Lin Wei­wei find these nov­el­ties cool. On a re­cent visit to a su­per­mar­ket, Lin loaded as many as six packs of co­conut wa­ter into her trol­ley.

“Sud­denly, many ofmy friends are talk­ing about these. They say they drink co­conut wa­ter af­ter a work­out. Some are into freshly squeezed fruit juices,” said Lin, mother of a four-year-old in Bei­jing.

Ac­cord­ing to Sam’s Club, a high­end re­tailer in Wal­mart Inc, pack­aged co­conut wa­ter is now part of the pre­mium prod­ucts of­fered to its mem­bers in China.

The cat­e­gory al­ready has es­tab­lished brands such as Co­conut Palm and KOH Co­conut. The lat­ter was in­tro­duced in 2014, and has since seen its sales surge, with a bot­tle re­tail­ing around 15 yuan now.

Ac­cord­ing to an in­dus­try re­port, Chi­nese con­sumers in­creased their spend­ing in 2015 across al­most ev­ery seg­ment, buy­ing bet­ter prod­ucts, pre­fer­ring well-known brands and gen­er­ally striv­ing to im­prove the qual­ity of liv­ing.

To­tal con­sumer ex­pen­di­ture grew by 10 per­cent to reach 31.7 tril­lion yuan ($4.8 tril­lion) last year, with per capita spend­ing around 23,095 yuan.

Ac­cord­ing to The Chi­nese Con­sumer 2016 Re­port by Min­tel, the sports drinks seg­ment, which is char­ac­ter­ized by an em­pha­sis on sci­en­tific bal­ance in in­gre­di­ents, per­formed well last year.

This is at­trib­uted to ris­ing aware­ness of harm­ful ef­fects of fla­vored, pig­mented and high-sugar drinks as well as in­creas­ing pop­u­lar­ity of co­conut-based bev­er­ages or plant-based pro­tein drinks among high-in­come con­sumers in Tier 1 cities.

The lat­ter sub-seg­ment is ex­pected to grow fast within the non-al­co­holic drinks seg­ment as more and more peo­ple in­clude reg­u­lar ex­er­cise in their life­style, said the re­port.

There is some ev­i­dence to that ef­fect al­ready. Vita Coco, the big­gest co­conut wa­ter brand in the United States, started sales in China in late 2014. It even roped in Red Bull China to take a 25 per­cent stake in its China busi­ness in July 2014, ac­cord­ing to Ju­lia Lee, a food-and-bev­er­age an­a­lyst with­Min­tel in China.

She said a re­lated drink, juice squeezed from co­conut pulp, has been pop­u­lar in China for more than 20 years. Co­conut Palm is the lead­ing brand in the cat­e­gory.

“The non-al­co­holic drinks cat­e­gory, with co­conut wa­ter as a key of­fer­ing, has de­vel­oped dra­mat­i­cally in re­cent years,” she said, adding such prod­ucts have gained vis­i­bil­ity thanks to their pro-health im­age.

This fac­tor has also con­trib­uted to the growth of sports and en­ergy drinks in China in the past few years. That may be be­cause co­conut wa­ter has been a pop­u­lar in­gre­di­ent in West­ern sports and en­ergy drinks, she said.

Although sales growth of health drinks slowed in 2015, aware­ness of them has risen. The Min­tel re­port notes this may be be­cause of the re­struc­tur­ing of China’s econ­omy where fo­cus is shift­ing to do­mes­tic con­sump­tion from in­vest­ments and ex­ports.

Min­tel re­search in­di­cates growth in con­sumer ex­pen­di­ture out­paced GDP growth rate on op­ti­mistic eco­nomic out­look of con­sumers, whose dis­pos­able in­comes rose by 7.4 per­cent in 2015.

How­ever, emerg­ing prod­ucts such as co­conut wa­ter and fla­vored wa­ter for­ti­fied with vi­ta­mins and elec­trolytes could strug­gle to post high growth rates in com­ing years, said the re­port.

Yet, sup­pli­ers may well in­tro­duce more co­conut wa­ter prod­ucts by rid­ing pig­gy­back on es­tab­lished health drink brands in China, said Lee. For ex­am­ple, sports and en­ergy drink brands could use co­conut wa­ter to re­po­si­tion them­selves in the cat­e­gory of health­ier, nat­u­ral drinks.

That might blur the line that sep­a­rates bev­er­ages such as plant­based pro­tein drinks, and help re­duce neg­a­tive per­cep­tions about sports drinks in China, and in­crease their com­pet­i­tive­ness, she said.

MENG ZHONGDE / FOR CHINA DAILY

A cou­ple share a ten­der co­conut in Qiong­hai, Hainan prov­ince. value of the Chi­nese con­sumer ex­pen­di­ture in 2015

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