Coca-Cola’s Flavored Water Boom in Peru: A Thirst for Growth
Table of Contents
A decade ago, Coca-Cola’s foray into flavored water in Peru was a relative flop. But a remarkable turnaround has seen production double annually since 2022, with 2023 witnessing unprecedented demand and a three-month stockout of the popular San Luis apple flavor. “Quietly, this segment can double once again becuase it has a lot of room to grow,” notes Luis Felipe Cisneros, Coca-Cola’s Marketing director in Peru and Ecuador.
Until recently, Argentina dominated the regional flavored water market, with a single flavor commanding 80% of the market share. Now, Peru is among Coca-Cola’s top five markets for this beverage category. Cisneros attributes this surge to changing consumer preferences: “The new generations look for this type of product because of the healthy trend.”
“there is a change from natural water to flavored water as it offers the consumer two things: a product without calories and that has flavor.”
Coca-Cola’s strategy also involved introducing sparkling flavored water, a move that, according to Cisneros, subtly cannibalizes the soft drink market, but primarily competes with plain water. The flavored water expansion began in lima and quickly spread to southern regions like Arequipa.
A New Occasion: Parties
Another burgeoning category in Peru is rehydrating drinks. Market research firm Euromonitor projects sales exceeding S/ 1,165 million by 2027, with a compound annual growth rate of 1.5%. This growth is fueled,in part,by the entry of major players like Coca-Cola,which recently launched Flashlyte. Cisneros describes this as, ”…the most dynamic new category that we would expect for this summer.”
The success of Coca-Cola’s flavored water in Peru offers valuable insights into evolving consumer preferences and the potential for growth in the beverage industry. The company’s strategic moves, focusing on health-conscious consumers and expanding into new segments, have proven highly effective in a rapidly changing market.
South American Beverage Giant Makes Waves with New hydration Drink
A major South American beverage company is making headlines with the launch of its new rehydration drink, Flashlyte. The grape and strawberry-flavored beverage, currently available in Peru, is poised for significant growth, with plans to expand to five flavors across multiple markets by 2025.
The company’s CEO, Cisneros, shared insights into the product’s advancement and market strategy. Regarding potential domestic production, he stated, “In theory, we could produce [Flashlyte] in the country. Almost our entire portfolio is produced locally. We are following the dynamics of the category to continue recalculating as we go.”
Strategic marketing is key to the company’s success. To avoid competition between its various brands, the company targets specific consumption occasions. San Luis water is positioned for everyday use, Powerade for athletic activities, Inca Kola and Coca-Cola for meals, and Flashlyte as a post-party or fatigue remedy. Cisneros concluded, “But, at the end of the day, it is the consumer who decides.”
The company’s extraordinary innovation pipeline extends beyond Flashlyte.Cisneros noted, “We have an engaging innovation pipeline in this category.” This commitment to innovation is evident in othre brands as well. The Coca-Cola Company continues to innovate with new flavors and collaborations,such as the recent apple-flavored Fanta and Marvel/Disney limited-edition Coca-Cola products.
Inca Kola, celebrating its 90th anniversary on January 17th, is another success story. Exported to over 10 countries, its popularity is particularly strong in areas with large Peruvian communities.
Market Data and Insights
- San Luis flavored water achieved remarkable 20% market penetration within a year—a significant accomplishment, considering that new product penetrations typically reach only 3% to 5% annually. (Kantar Base 2024)
- The Coca-cola Company holds a dominant 89% market share in the flavored water category. (Nielsen base)
While sugar-free carbonated beverages are gaining popularity in Peru, they still represent less than 20% of the overall market.
the success of this South American beverage company offers valuable lessons for the U.S. market, highlighting the importance of targeted marketing, product innovation, and understanding consumer preferences.
This article is for informational purposes only and does not constitute financial or investment advice.
Peruvian Agriculture Battles Rising Costs and Climate Change Amidst Global Food Crisis
Peru’s vital agricultural sector is facing a perfect storm of challenges, with soaring fertilizer costs and the intensifying effects of climate change threatening both domestic food security and global supply chains. The situation underscores the vulnerability of developing nations in the face of a growing global food crisis.
The rising price of fertilizers, a critical input for crop production, has substantially impacted Peruvian farmers. Many are struggling to afford the necesary inputs, leading to reduced yields and increased production costs. This is particularly concerning given Peru’s role as a significant exporter of agricultural products to the United States and other global markets.
Peruvian farmland“>
Adding to the pressure, climate change is exacerbating existing vulnerabilities.Unpredictable weather patterns, including droughts and floods, are wreaking havoc on crops and livestock, further reducing yields and threatening livelihoods. “The situation is dire,” says one expert.”farmers are facing unprecedented challenges, and the consequences could be far-reaching.”
The impact extends beyond Peru’s borders. As a significant exporter of agricultural goods, the country’s struggles directly affect global food supply chains. Reduced production in Peru can lead to price increases and shortages in international markets, potentially impacting food affordability and availability in the United States and elsewhere.
While the challenges are significant, there is hope. Experts are calling for increased government support for Peruvian farmers,including subsidies for fertilizers and investments in climate-resilient agricultural practices. “We need a multi-pronged approach,” explains another expert. “This includes investing in research and development, improving infrastructure, and providing farmers with access to credit and insurance.”
The situation highlights the interconnectedness of global food systems and the need for international cooperation to address the challenges posed by climate change and rising input costs. The impact on Peru’s agricultural sector serves as a stark reminder of the vulnerabilities facing many developing nations and the potential ripple effects on global food security.
The future of Peruvian agriculture, and indeed global food security, hinges on the ability of governments, international organizations, and the private sector to work together to support farmers and build more resilient and enduring agricultural systems. The time for action is now.
Note: This article uses placeholder image URLs. Please replace these with actual image URLs.
Peru’s Flavored Water Boom: A Thirst for Growth
A decade ago, Coca-Cola’s foray into flavored water in Peru was a relative flop. But a remarkable turnaround has seen production double annually since 2022, with 2023 witnessing unprecedented demand and a three-month stockout of the popular San Luis apple flavor. “Quietly, this segment can double once again because it has a lot of room to grow,” notes Luis Felipe Cisneros, Coca-Cola’s Marketing director for Peru and Ecuador.
New Trends Driving Demand
Until recently,Argentina dominated the regional flavored water market,with a single flavor commanding 80% of the market share. Now,Peru is among Coca-Cola’s top five markets for this beverage category. Cisneros attributes this surge to changing consumer preferences: “The new generations look for this type of product as of the healthy trend.”
He adds, “There is a change from natural water to flavored water as it offers the consumer two things: a product without calories and that has flavor.”
Coca-Cola’s strategy also involved introducing sparkling flavored water, a move that, according to Cisneros, subtly cannibalizes the soft drink market, but primarily competes with plain water. The flavored water expansion began in Lima and quickly spread to southern regions like Arequipa.
Rehydration drinks: The Next Big Thing
Another burgeoning category in Peru is rehydrating drinks. Market research firm Euromonitor projects sales exceeding S/ 1,165 million by 2027,with a compound annual growth rate of 1.5%. This growth is fueled, in part, by the entry of major players like Coca-cola, which recently launched Flashlyte.
Cisneros describes Flashlyte as, “…the most dynamic new category that we would expect for this summer.”
A Holistic Approach to Beverage Innovation
Senior Editor:
“Mr. Cisneros, the success of coca-Cola’s flavored water in Peru is impressive. How do you see this trend evolving, and what are the key factors contributing to this growth?”
Luis Felipe Cisneros:
“The market is driven primarily by health-conscious consumers looking for tasty alternatives to sugary drinks.
Our success comes from understanding these evolving preferences and offering products that cater to them.
We are seeing a meaningful shift towards functionality in beverages - products that offer hydration, replenishment, and even energy boosts.
Our launch of Flashlyte,a grape and strawberry-flavored rehydration drink,is a direct response to this trend. We anticipate it will be a significant player in the growing rehydration drink market.”
Senior Editor:
“Beyond flavored water and rehydration drinks, are there any other exciting innovations or product launches on the horizon for the Peruvian market?”
Luis Felipe Cisneros:
“Innovation is at the core of what we do. We have an engaging pipeline of new products in the pipeline.
Beyond new flavors and formats, we are exploring new ingredients and functionalities. Consumers are increasingly interested in natural ingredients and beverages that offer specific health benefits.
We are also seeing growing demand for sustainable packaging solutions, which is something we are actively working on.
Our commitment is to continue offering peruvian consumers a diverse and exciting range of beverage choices that meet their evolving needs.”
Senior Editor:
“Thank you for sharing your insights,Mr. Cisneros. It’s clear that Coca-Cola is a driving force behind the dynamic beverage landscape in Peru.”
