Why taking the category view means you can embrace competition

This blog is part of our series introducing a new approach to build brands that drive change; the Category Growth Agenda. Each week in June we share an example of a brand that has benefited from taking the category view, using that perspective as the basis for successful future growth.

How would you react when a big competitor enters the category you have lovingly nurtured and grown from nothing? Shut up shop and call it game over? Sell out to another competitor? Or embrace and welcome the new entrant with open arms?

Vita Coco’s founders Michael Kirban and Ira Liran yearned for the coconut water they’d tasted in South America, yet couldn’t find anywhere in the US. They released their first natural coconut water in 2004, helping to create the almost non-existent US coconut water market. From there they expanded globally, and quick; their growth trajectory is well known as they found their niche with consumers who saw the benefits of a natural, electrolyte-rich drink that became the perfect thing to have post-workout.

For years, Vita Coco’s growth was unencumbered by the traditional plethora of bigger, stronger brands with better relationships with supermarkets and bigger marketing spends. Not only did they build their own brand to match that of the giants, they built the coconut water category itself. Yet as is life, other competitors soon started emerging, and big brands took a clear interest in coconut water. Of note, Innocent Drinks announced they would be launching their own coconut water in 2015, with many anticipating the Coca-Cola-backed brand to take the fight to Vita Coco and diminish the great success they had sustained to date.

The then CEO Giles Brook had a different view. He welcomed the launch saying, “It’s quite tough building a category… another really strong, great tasting brand investing heavily would be great for us and the category”. A bold statement; don’t be worried when the big brands enter your category, be relieved that they will use their sizable marketing budgets to drive awareness and growth for the category at large! By seeing the benefits of growing the category, rather than just a brand’s share, everyone wins.

Giles Brook benefited from taking the category view. By having such a rich understanding of the coconut water category; where it’s going, what is needed for it to grow, he saw a new entrant as an energiser for the category rather than a disruptor to Vita Coco. And what’s been even better for Vita Coco is that, since they are they have the clearest brand association with coconut water, they have gone on to benefit hugely from Innocent helping bring more consumers into the category.

To find out more about how we can help your brand define their own category growth agenda, contact us at info@thevalueengineers.com.

BY ENGINEER Tom Speed

tom.speed@thevalueengineers.com