If you're only a headline skimmer, it's a detail that would have been easy to overlook. For those who don't miss anything, however, they'll already know that beverage company Konared Corp. (OTCBB:KRED) is about to unveil a product that will put it toe-to-toe with the likes of The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP). And, if history is any indication, while PepsiCo and Coca-Cola are apt to maintain their wider distribution, KonaRed is apt to beat them in enough places to carve out a nice piece of the market, and reward KRED shareholders in the process. Meanwhile, there's a good chance that most PEP and KO shareholders know - or even care - that the company they own a stake in is even competing in this arena. That arena? Coconut water.
It's a new category for KonaRed, which up until this point has limited its menu to coffee fruit juice, and more recently, green tea. In fact, news that KREF was getting into the coconut water game wasn't unveiled until Wednesday, and even then only in passing. In a press release that was primarily intended to unveil a new bottle design for its existing beverage lineup, KonaRed Corporation also mentioned the new bottles would be the containers used for the upcoming coconut water that would also contain juice from coffee fruit.... the functional beverage market's newest superfruit, which is packed full of antioxidants.
Is there actually any money in coconut water? Yes, and no. Last year, the coconut water market in the United States was worth an estimated $130 million. In Europe, the market was worth about $75 million. No, it's not a lot, though it's a sizable opportunity for a small cap company like Konared Corp. But, the current market isn't the big story behind the advent of coconut water. What's big - and encouraging - about the still-young market is its potential.... which is huge. How big is it? It can be explained like this - both the The Coca-Cola Company and PepsiCo, Inc. both made a point of getting into the business, despite the fact that the market's revenue was only a drop in the bucket at the they scooped up Zico and O.N.E. brands (respectively) a couple of years ago. If PEP and KO want in, there's got to be something to it.
Still, it's a niche product that lends itself to producers that can cater to nuances rather than large, multi-faceted beverage companies that are well-removed from the front lines of their markets. That little detail is how and why KonaRed is going to carve out a respectable piece of the coconut water market. For example, by adding a splash of juice from coffee fruit that's a key part of the agricultural scene in Hawaii, the company is giving consumers something they're apt to want, but can't get anywhere else... something that Pepsi and Coke would never have the guts or foresight to even try.
Bottom line? KRED has yet another product it can use as a launching pad into greatness.
For more on KonaRed, visit the SCN research page here.
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