Type to search

Food Service Case Studies Retail Case Studies

LQC Wants to ‘Go Coconuts’ in Private Label Sector

Share

Vietnam company’s products offer differentiation on several levels

SPONSORED CONTENT

“Coconuts are us.”

Chad Huemme, chief operating officer of Luong Quoi Coconut (LQC) Inc., chuckles when he utters the play on words. But make no mistake, there’s satisfaction in the tone of his voice.

 That’s because Huemme realizes that LQC — a single-source coconut manufacturer based in Châu Thành, a rural district of the Bến Tre Province in the Mekong Delta of Vietnam​ — finds itself in the driver’s seat when it comes to providing a line of favorable products in this current climate of consumer-packaged goods (CPGs). At its farm and plant in Châu Thành, LQC manufactures coconut water, coconut milk, coconut cream, toasted coconut chips, coconut oil, coconut flour and desiccated coconut. The products are favorable because they differentiate through authenticity, health and wellness, and sustainability, among other factors.

LQC is the No. 1 exporter of coconuts in Vietnam and sells its products in 30 countries, including in the U.S. under its CocoGoods brand. Its U.S. operations are based in Norwood, Mass. The family-run business began more than 30 years ago when a husband-and-wife team began producing coconut milk and cream, which led to a full range of products

Growing Private Label

CoCo Good Oil

One thing LQC aims to do in the next five years is grow its private label business sevenfold. “LQC has invested significant money across its product line to create scale,” Huemme says, noting the company is prepared to take on growth that would come with private label.

Considering LQC’s product lineup, the company could become a formidable player in private label. That’s because more grocery retailers, from traditional grocers to convenience stores to mass merchandisers, are increasingly on the move to differentiate themselves. And they’re doing it through private label.

But not just any private label. The grocers with the best and most successful store brand programs aren’t just offering knockoff brands of peanut butter, ketchup and mustard — they’re offering distinctive products that differentiate on myriad levels. In many cases, the private label products they offer are considered “premium” and can’t be found anywhere else.

Huemme believes the company’s products are a solid fit because they are distinct. First, because they originate from Vietnam — a country that is a coconut haven — the products are truly authentic. And while there has been a push to “buy American” in the U.S., there are some products that just aren’t available to “buy American.” That includes coconuts.

“Agriculturally, we don’t grow coconut trees at scale in the U.S.,” Huemme points out. “We have them, but they are very limited. There is not enough scale to support the consumer market place in the U.S.”

Vietnam is one of the top coconut-producing nations in the world. The Bến Tre Province is the coconut capital of Vietnam and has the largest total coconut-growing area in the country — about 182,800 acres. The tropical climate — hot, humid, sunny and rainy — makes for ideal growing conditions in the region. In Vietnam, the coconut tree is regarded as the “tree of life.” Coconuts are integrated into the culture, the cuisine and the community.

“[Bến Tre] has one of the highest-quality growing regions for coconuts in the world,” Huemme says.

Huemme notes that U.S. consumers are more accepting of products grown in other parts of the world when they know they can’t find such authentic products here. Hence, stamping a label on LQC’s products that reads “From Ben Tre Vietnam” only enhances their pureness in the eyes of consumers.

CoCo Goods Family

All of LQC’s coconuts come from the farm surrounding the company’s factory in Bến Tre. In addition to authenticity, the company touts the health and wellness of its products, another attribute that many consumers, especially millennials, are seeking in CPGs, including private label items. All of the products in LQC’s line are natural and organic.

Huemme points to the four flavored products in the company’s coconut water line, which contain 100% organic coconut water and natural fruit flavorings, and no preservatives or additives. The water also includes various electrolytes, including sodium, potassium, calcium and magnesium. Huemme notes that other coconut water products in the market contain additives and ingredients that can distort the flavor profile.

LQC’s coconut milks and coconut cream are also gaining in popularity, one reason being that they “make for a great dairy substitute,” Huemme says, noting that the under-40 crowd is also using the products as an ingredient in various Asian and Indian dishes.

LQC also differentiates by being sustainable and in more ways than one. Consumers are increasingly clamoring for more sustainable products and are willing to pay more for them, including as private brands.

LQC says it harvests everything possible the coconut has to offer so nothing from the fruit gets wasted. The company also made a significant investment in solar energy to produce more than enough energy to power its entire plant operation. In addition, LQC also reinvests 2.5% of its profits in its employees to improve their housing and agricultural education. In Norwood, the operation donates product to food banks and other non-profit organizations.

“Coconuts are us.” Indeed. And they serve as a substantial differentiator for LQC.

Tags: