Opportunities And Challenges Of H2Coco In The Health Food And Beverage Industry

Overview of the Health Food and Beverage Industry in Australia

The report aims at providing an insight into the H2Coco, a company known for its coconut-based products.  The products of H2Coco are found in various national outlets that includes Supermarkets, Chemist Warehouse and Priceline (h2coconut.com, 2018). A marketing plan is necessary since it helps the leaders of the company in developing and keeping an eye on the functional areas for meeting the expectations. It is necessary for implementing a marketing plan for H2Coco since it helps the company in developing products for meeting the required needs of the target customers. In addition, a good marketing plan helps the customers in understanding the products of the concerned company. In recent times, there was an investigation undertaken based on the fact that the company was publicizing its coconut water  as a composite blend of the minerals, amino acids, vitamins, enzymes, antioxidants, phytonutrients and hormones that enhanced growth which the company could not substantiate with necessary claims. The marketing plan initiated helped the customers in receiving the right amount of information, avoid any misguidance and increase sales.  

H2Coco is company based in Australia primarily known for its pure coconut water products. It is in fact one of the favourite coconut water brands in New Zealand and Australia. The product range of the company includes chocolate milk, iced coffee and various types of dairy alternatives (McGoldrick, 2017). The company provides a Lunchbox range perfect as packed lunches. Most of the products of H2Coco are not only 100 percent natural but is gluten and dairy free with no preservatives and artificial ingredients. The company with its healthier choice of products ensures a healthier lifestyle. It is found that one in every four Australians is actively trying to reduce the sugar intake and this aspects has been taken care of the newer range of H2Coco that are not only 100 percent natural alternatives of fruit juices that are not only flavoured, hydrating and contains less amount of sugar compared to the  juice boxes. After making a mark in the watermelon and coconut water based products, H2Coco entered into two-year partnership with Surfing NSW, which is the longest and the largest running state body representing the sport of surfing,  thereby becoming its official coconut water. In recent times, the company has also collaborated with the Woolworths Petrol thereby ensuring healthier bites.

Market Analysis

The food and beverage industry is dynamic and is driven by the consumers’ demand who seek quality, value and diversity. The range of food availability reflects the cultural and ethnic diversity of Australia (Heasman & Lang, 2015). Many are various specialty products that have Middle Eastern, Asian and European influences. Foods with certain specific attributes are ensured food certification standards and systems.   However, the industry focused internationally with the exports in more than 200 markets.

Introduction to H2Coco and its Products

The present beverage sector in Australia has a growth of around 2.2 percent that represents the second strongest growth in the manufacturing sub division. In the current year, the revenue of wine production has an expected growth of about 7.1 per cent that is close to $ 6.2 billion(4). The Australian industry recovers from wine surplus due to the structural over supply for almost a decade along with lower prices of the grapes and increased number of the wine producers in the Australian industry. The strong demand for exports in combination with the poorer harvests in Argentina and Chile has led to an undersupply to the exporters. The Australian wine makers have picked up the slack by producing higher quality of wine. However, the wine industry in Australia is fragmented with a number of smaller producers. The largest of them includes the treasury wine that is expected to grow by about 7.4 percent in the current year that is closely in line with the average of the industry. The manufacture of beer declined in the last five years ranging from 0.7 percent to $4.2 billion (Anderson & Aryal, 2015).  There was also a decline in the consumption of beer during the period along with a shift to low carbs labels. This negatively affected various companies manufacturing beer.

Political Analysis

The regulatory and government institutions of Australia are not only reliable but also impartial, transparent and internationally competitive thereby ensuring companies like H2Coco with a secure and safe business framework (Evans & De Graaf, 2013). Political Analysis refers to the government policy that includes:

• Degree of intervention in economy
• The goods that the government supports providing
• Subsidization of  the firms
• Priorities in terms of business support

Australia represents a safe destination for any sort of investment. The regulatory and political environment of the country is not only progressive and open but provides the investors with higher degree of certainty and confidence. The country effectively responds to the economic challenges with a highly adaptable policy of the Australian government.

This involves factors that act as the determining factor for the performance of the economy that directly can influence the long-term performance of a company like H2Coco (Baker, Merkert & Kamruzzaman, 2015). The economic factors include:

• Economic system and condition
• Policies of the government
• Policies of the  Industry
• Policies related to export and import

Australia represents one of the major capitalist economies of the world and is dominated by the service sector. Companies like H2Coco however find an ease is doing business since the country ensures continuous economic growth, lower unemployment and lower public debt, stronger and stable financial system, have an open market with minimum restrictions.

Marketing Plan for H2Coco

Social Analysis

The social factor that exists within population includes:

• Beliefs
• Custom
• Policies
• Behavior

The environment of Australia environment represents a collection of varied people (Haslam et al., 2014). The changes in the social trends directly influence the demand for the products of a firm and the willingness and availability of the individuals at work.

This involves factors like:

• Research and Development Activities
• Automation
• Technological Incentives
• Rate of Technological Changes

The influence of the newer technologies helps in creating new process and products (Stromquist & Monkman, 2014). This is because technology can not only reduce the cost but also lead to the improvement of quality thereby leading to innovation. Such developments acted as benefits to the organization and the consumers.

Some of the legal environments under which firms operate include:

• Introduction of  the age discrimination
• Legislation for disability discrimination
• Increase of the minimum wage
• Greater necessity  for firms in recycling

The legal system of Australia depends on the primary belief of justice, law and independence of the judiciary (Barker & Branson, 2014). The country treats all people equal before the law. The constitution of Australia led to the establishment of a federal system of the government according to which power is distributed between the states and the federal government.

The acts initiated for environmental protection includes:

• Protection for Environment Act of 1974
• Protection for Environment Act of 1978
• Protection of the Sea Act of 1981
• Protection for the Whale Act 1981

The increasing desire for protecting the environment is directly having an influence mostly in the transportation and the travel industries (Meng, Siriwardana & McNeill, 2013). This has resulted in a move towards the environment friendly processes and products that influences the patterns of demand and helps in creating business opportunities.

Company Analysis 

The three major positive things about H2Coco include:

• The company H2Coco thinks in an innovative manner by thinking out of the box through the launch of a new alternative of fruit juice along with a newer range of lunchbox.  
• H2Coco the favorite coconut water brand of Australia gets into a partnership with the Surfing NSW that is one of the longest and the largest state running body for sport of surfing in the continent of Australia. The partnership makes it the  official coconut water of Australia (McGoldrick, 2017)
• The company also enters into partnership with Woolworth Petrol for launching the campaign for the healthier bite.

The three major negative things about H2Coco include (McGoldrick, 2017):

• It has been found that the coconut water contains has more sugar content which accounts for close to 70 calories. Whenever mixed with the fruit juice, the content becomes more sugary.
• The processed coconut water has lower levels of electrolytes due to the process of pasteurization.
• For getting the daily amount of the potassium, it is necessary for drinking more than 1.5 litres of the coconut water. Laboratory test has proved that the ones available in the tetra packs does not contain sufficient amount of magnesium and sodium.

In spite of its negativities, H2Coco of Australia has been quite in demand amongst the Australian people.

The three direct competitors of H2Coco are as follows (Fleisher & Bensoussan, 2015):  

• Nudie Coconut Water
• Natural Raw C
• Taste Nirvana
• Cocobella

Points of Similarities

The point of similarities exists in terms of the target market, product and prices. In cases of some there exist certain similarities in the promotional and distribution methods adopted,

Points of Differences

The point of the competitors in some cases lies in the distribution and the promotional strategy along with difference amongst a difference in the strengths and weaknesses of different coconut water brands.

Competitor	Target Market	Product	Price	Promotional	Distribution	Strength/ Weakness
Nudie Coconut Water	Health conscious people, tourist and sportsmen	First ever coconut water with no added sugar, preservatives or additives	$5.00 per 1L	Focuses on the building of the overall brand equity	Intensive Distribution Strategy	Main Strength: It is natural, have hydrating qualities and a great taste and higher nutritional benefits  Main Weakness:  Have unsuccessfully perceived value pricing
Natural Raw C	Tourist, sportsperson, health conscious people	Natural coconut water with no preservatives or additives	$5.00 per 1L	Follows unique strategy for promotion that ensures direct comparison with competitors	Intensive Distribution strategy	Main Strength: Comes  with re-saleable packaging Main Weakness: Refuses deviating to other flavours
Taste Nirvana	Health conscious people, sportsperson and tourist	Organic coconut water manufactured in eco-friendly ways	9.5 ounce  (Pack of 12 )	Promotes overall equity of the brand	Adoption of unique distribution channel	Main Strength: Has eco-friendly distribution and manufacturing process Main Weakness: Has smaller distribution networks  compared to the competitors and unpleasant pulp
Cocobella	Specially kids	Natural Coconut Water with no additives or preservatives	$5.00 per 1L	Undertakes promotional that leads to the promotion of overall brand equity	Adopts unique distribution channels	Main Strength: Have diverse range of products Main Weakness: Since it sources the coconut from the various countries so there exist inconsistencies in taste.

 

The customers include the sportsperson, tourist, health conscious people and sometimes the kids. They primarily buy quality products at an affordable price. The consumers primarily buy the product of H2Coco so that they can not only consume it at breakfast, post work out or at the afternoon or night (Rödiger & Hamm, 2015). If one considers the psychographic factors then it can be seen that the personal values plays a vital role in influencing the consumer buying decision. There is a feeling of satisfaction whenever they make a purchase rhyming with the core values. The interest and attitudes of the consumers helps in dictating the decisions for buying. Thus, the varying attitudes of the people act as an important determinant of the purchase decisions of the consumers. The lifestyle is another factor that acts as a determining factor on how the consumer spends money, time and energy. Lifestyle also helps in determining the choice of products of the consumers.

Figure 1: Table Representing SWOT Analysis

Source: (Rodiger & Hamm, 2015).

Recommendations/Conclusion

The recommendations include:

1. Ensuring relocation of H2Coco coconut water as a beverage among the health conscious people: Through the macro environmental one can find that there is increasing preference of the consumers for healthier beverages and hence H2Coo has the opportunity of repositioning it as a healthier alternative for sports drinks that mostly used artificial sweetener and the dyes. The coconut water of H2Coco represents a natural means for replenishing the electrolytes after a workout. This relocation involved clear promotion of the H2Coco coconut water as a source of potassium, magnesium and electrolytes which are necessary for replenishing the energy after a workout and act as healthier alternative to the sports drinks.
2. Reaching the consumers at the consumption point: H2Coco should the distribution strategy for reaching the newer consumer at the consumption point. Moreover, the potential of H2Coco in capturing the position of  position of a beverage post the workout implies that the  products of the company finds distribution through the vending machine, physical activity hubs and the sport kiosk. Thus, the coconut water of H2Coo remains accessible to the intended customers at the consumption point that results in creation of strong association with the product and building the loyalty of the brand.

To conclude, it can be said that the Australian consumers are health conscious that ensures an enduring market for the H2Coco coconut water that has stronger appeal as functional beverage. The coconut water had fitted well into the product line and ensures building the brand equity of the product due to the positive associations with the nutrition and health.  

References

Anderson, K., & Aryal, N. R. (2015). Growth and cycles in Australia’s wine industry: a statistical compendium, 1843 to 2013 (p. 610). University of Adelaide Press.

Baker, D., Merkert, R., & Kamruzzaman, M. (2015). Regional aviation and economic growth: cointegration and causality analysis in Australia. Journal of Transport Geography, 43, 140-150.

Barker, R. L., & Branson, D. M. (2014). Forensic social work: Legal aspects of professional practice. Routledge.

Evans, G., & De Graaf, N. D. (Eds.). (2013). Political choice matters: explaining the strength of class and religious cleavages in cross-national perspective. OUP Oxford.

Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: effective application of new and classic methods. FT Press.

h2coconut.com. (2018). Retrieved 3 April 2018, from https://www.h2coconut.com/

Haslam, S. A., Van Knippenberg, D., Platow, M. J., & Ellemers, N. (2014). Social identity at work: Developing theory for organizational practice. Psychology Press.

Heasman, M., & Lang, T. (2015). Food wars: the global battle for mouths, minds and markets. Routledge.

McGoldrick, J. (2017). H2coco becomes the Official Coconut Water of Surfing NSW. Retrieved 3 April 2018, from https://www.h2coconut.com/h2coco-becomes-the-official-coconut-water-of-surfing-nsw/

 McGoldrick, J. (2017). The Story of H2coco – In a coco-nutshell!. Retrieved 3 April 2018, from https://www.h2coconut.com/the-story-of-h2coco-in-a-coco-nutshell/

McGoldrick, J. (2017). Thinking outside the juice box with new H2coco ambassador, Jules Sebastian. Retrieved 3 April 2018, from https://www.h2coconut.com/thinking-outside-the-juice-box-with-new-h2coco-ambassador-jules-sebastian/

Meng, S., Siriwardana, M., & McNeill, J. (2013). The environmental and economic impact of the carbon tax in Australia. Environmental and Resource Economics, 54(3), 313-332.

Rödiger, M., & Hamm, U. (2015). How are organic food prices affecting consumer behaviour? A review. Food Quality and Preference, 43, 10-20.

Stromquist, N. P., & Monkman, K. (Eds.). (2014). Globalization and education: Integration and contestation across cultures. R&L Education.