Alcoholic coconut water ready-to-drink (RTDs) options are the latest alcohol beverage trend to explode in Australia over the past year. Food & Drink Business spoke with one of the Australian market leaders about the rise of better-for-you beverages and the coconut water craze.
With the popularity of functional beverages soaring, and more consumers reaching for hydrating and refreshing options, it’s little wonder that coconut water has gained a firmer foothold.
According to Circana, coconut water market household penetration in Australia rose from 19 per cent to 21.3 per cent over the past 12 months.
One of the country’s most popular coconut water brands, Raw C, has been reaping the rewards, with a range of new flavours and a US launch in the past year.
Raw C founder, Scott Mendelsohn, says the company has seen incredible growth in coconut water demand across Australia, with the category up over 30 per cent year on year.
“It’s clear people are seeking healthier, more natural hydration options, whether in its pure form or in new formats like alcoholic coconut water,” says Mendelsohn.
“Demand is actually outstripping supply globally, which has put upward pressure on raw material prices, and we’re working closely with our growers in Southeast Asia to secure consistent, high-quality supply.”
Alcoholic options
The rising popularity of coconut water also inspired an alcoholic twist on the trend, with Coastal Drink Co (Coastals) launching “Australia’s first” hard coconut water in April 2024.
Founder and director Adam Benwell, who brings 11 years experience in the alcohol production industry, says the product was inspired by a family holiday.
“A quick Google search showed us that similar products existed overseas, but they were either watered-down or just flat out boring.
“We knew we could create something better,” says Benwell.
“The international brands we saw were doing okay, but they weren’t capturing what we envisioned: that perfect balance of premium ingredients and real taste that would make people actually want to savour the drink, not just knock it back.”
Alcoholic coconut water actually has a decade-old history in Australia, with the Coco Vodka brand launched in 2014, before being sold to an American duo in 2019. The product is no longer available in Australia, but is thriving in the US and Canada. Until early last year, there was little movement in the local market – before Coastals debuted.
Benwell said the recipe for Coastals’ first product took nine months of refinement to develop, and there’s been a massive shift in the market since starting out almost a year and a half ago.
“When we first launched, we were explaining what alcoholic coconut water even was to most people. Now, we’re seeing multiple new brands entering the space every few months,” says Benwell.
“I think what’s driving the alcoholic coconut water category is the perfect storm of health consciousness meeting social drinking culture. People want to enjoy themselves without feeling terrible the next day, and they’re much more ingredient-conscious than previous generations.”
Kickstarting a rapidly growing trend, Coastals was quickly followed by Sunday Club seltzers in May 2024, before the flood of Sandboy Leisure Club’s launch in February 2025, Drop in March, and Rainbird x H2coco in April.
Sunday Club and Sandboy’s coconut water and vodka RTDs are both made with Raw C coconut water, while Drop is created by Melbourne-based craft brewery, Moon Dog, in partnership with reality TV personality, Aesha Scott. Rainbird is the alcoholic seltzer brand under Pinnacle Drinks, Endeavour Group’s beverage distributor.
Staying relevant
With new brands continuing to enter the market, Benwell says staying relevant is what matters.
“What sets us apart is that Coastals is more than just a drink; it’s a movement powered by people, not marketing machines. We’re proudly independent – no conglomerate backing, no celebrity endorsements, just us doing things the right way from the ground up,” he says.
“That means we can be agile, we can listen to our community, and we can make decisions based on what’s best for the product and our customers. Our commitment to quality is non-negotiable. While competitors might cut corners with cheaper alternatives, we use the highest quality coconut water, triple-distilled vodka, and real fruit juice. No shortcuts, no gimmicks, just honest products rooted in community,” says Benwell.
As the warmer months approach, the hard coco craze is poised to show whether it has the strength to establish itself as a lasting category.
This article first appeared in the August/September 2025 edition of Food & Drink Business magazine.
