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Coca-Cola to Drop Zico Coconut Water in Brand-Focus Effort

Coca-Cola will discontinue Zico coconut water in a brand-focusing effort brought on by the pandemic, a media report says.

Coca-Cola  (KO) - Get Coca-Cola Company Report by year's end plans to stop producing its Zico coconut water as part of an effort to focus on products that can achieve a large scale, a media report says.

The company is currently reviewing other products such as Coke Life, Diet Coke Feisty Cherry, Northern Neck Ginger Ale, and Delaware Punch, according to the Wall Street Journal.

“The decision comes at a time when we are hyperfocused on delivering on our consumers’ wants and needs,” a Coke spokeswoman said.

In 2013, Coca-Cola acquired Zico which was the No. 2 brand in the market at a time when coconut water was a growing category in the U.S. The market leader was Vita Coco, the Journal reported.

Coconut-water sales in the U.S. increased during the pandemic, rising 4.4% in 2020 to date, according to Nielsen data cited by the Journal. 

But Zico’s sales declined 46% during the same period, pushing the Atlanta drinks giant to prioritize higher-demand products such as Smartwater and Powerade, the spokeswoman told the paper.

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The company is also planning to discontinue store sales of Hubert’s Lemonade, limiting the brand to fountain machines, she said.

Coca-Cola has said it planned to cut more than half its 500 fully or partly owned brands worldwide. The pandemic spurred the restructuring, which includes layoffs and a new marketing strategy, the Journal reported.

In July, Chief Executive James Quincey said that many of the company’s 400 "master brands” are in one country, making up just 2% of total revenue.

Coca-Cola is currently producing fewer varieties to focus on its top labels. That makes Coke Life, Decaffeinated Diet Coke, Fanta, and Northern Neck Ginger Ale hard to find, the Journal reported.

Coca-Cola said in July that it was closing its Odwalla juice business as well as a refrigerated-trucking network that delivers fresh drinks to stores.

In September, Coke said it planned to launch its first hard seltzer in the U.S. in the first half of next year.