Can Cocofly crack the 'Paper Boat Problem'?
The army suggested officers would gladly buy Cocofly at Rs 35 for a 200 ml pack, however, the jawans were put off by the price.
Co-founder and CEO Abhay Jaiswal went to the Indian Railways where he was told Cocofly would only sell in AC First Class. "I was consistently told that if you want to build a huge business, you are creating a cap at Rs 35. And I'm not being uncharitable, I have great respect for Paper Boat, but I have named it the 'Paper Boat Problem'." He believes the market for brands like Paper Boat, that are culturally familiar, nostalgic tastes like anar, aam ras, jamun and jal jeera in smart packaging, caps out rather quickly in a market where a thirsty chap on the street can buy Amul chaas for Rs 8. That's fine if you want to build Rs 100 crore brands, be an ethnic drink brand in the ethnic drink category. But not if the goal is to be a Rs 1000 crore brand and gun for the overall juice market. Get a share of throat and not fall into the recreational or mixer drink category. These are lofty ambitions for a brand that's still in early stages and has a turnover of about Rs 8 crore.
Nilgai Foods finds inspiration in Vadodara-based Manpasand Beverages, which has turned brands like MangoSip into forces to reckon with through solid distribution in rural and semi-urban markets. They make Ghayal Returns, not Anurag Kashyap productions', according to Jaiswal, a self-confessed movie buff who routinely draws on filmy analogies. Incidentally, Manpasand launched its coconut drink, CocoSip in May 2016, a month after Cocofly. Others in the Rs 100 crore packaged coconut water market in India are Dabur's Real Activ and Cocojal, among other smaller branded and unbranded players. "There are a few labels, I don't even call them brands," says Jaiswal. "For instance, Dabur has launched it as a flavor within Real Activ. Cocojal is a family-owned business. Everybody sells it in bad packaging and in a commoditised way. The branding and customer aspiration created in the West is not present here."
While sales of fizzy drinks remain sluggish, coconut water was the world's fastest-growing cold drink last year. Worth $2.5 billion, the global market is dominated by American brand Vita Coco with celebrity investors Madonna and Matthew McConaughey, who fuelled the loco over coco craze in the US a few years ago. PepsiCo and Coca-Cola also have brands in the fray, and are among the world's top three biggest producers of packaged coconut water.
Back home, sometime this month Nilgai plans to breakdown the price wall with Cocofly at Rs 20. It ditched Tetrapak packs for a bottle that allows for more sizes. Health benefits are explained pictorially on the pack. The lower price point, the company claims, has excited many, particularly airlines. Though some marketing consultants believe it needs to lower the price further for Cocofly to become truly mass. The company has been tapping institutional sales - BSF and other armed forces, airlines, railways, cooperatives, hospitals and corporates. And in a smart move it's also selling through Patanjali's franchisee stores, where Cocofly's proposition of shudh coconut water with no-added sugar as a healthier cold beverage fits well with the customer walking in to buy ayurvedic toothpaste and tel.
The biggest marketing challenge for Cocofly, however, will be to avoid commoditisation, perhaps by adding other natural flavours, according to Jessie Paul, founder of Paul Writer Strategic Advisory: "This will allow them to distinguish from the competitors and build taste-based loyalty. Without this differentiation any marketing investment undertaken by them will only grow the overall market without creating a lock-in for Cocofly." And they need to move fast. Because nothing's stopping established brands like Paper Boat or even Patanjali from usurping the space. Now, that would be a tough nut to crack.