Vita Coco water.
Tim P. Whitby | Getty Photos
For almost two a long time, Vita Coco has sold its coconut water to health-awake patrons as a recent technique to hydrate. This yr, it be changing the pitch.
The beverage firm is pushing its namesake ticket into original use instances and instances, partnering with Diageo on a canned cocktail and marketing the drink as a hangover succor.
Co-founder Mike Kirban when put next Vita Coco’s transformation to that of Ocean Spray, the agricultural cooperative that sells cranberry products.
“Ocean Spray is a ticket that is four instances our size, that is all in step with one ingredient,” the firm’s executive chairman informed CNBC. “And we wishes to be higher than Ocean Spray barely snappily, because I deem the coconut is cooler than the cranberry.”
Founded in 2004, Vita Coco began as a coconut water ticket but has since expanded into other beverage lessons, treasure energy drinks and water. Its namesake ticket gentle accounts for three-quarters of the firm’s earnings, which reached $335.8 million in the principle nine months of 2022.
The firm went public in October 2021, comely sooner than the marketplace for preliminary public choices dried up as inflation, the warfare in Ukraine and financial uncertainty weighed on investors.
Vita Coco’s inventory is up lower than 1% since its IPO, but it absolutely’s fared higher than many other person firms that went public eventually of the identical time, treasure Sweetgreen and Allbirds.
In May maybe maybe perchance, Kirban transitioned from co-CEO at the firm to his present feature, leaving Boston Beer ragged Martin Roper because the sole chief executive — one other step of Vita Coco’s evolution.
Coke and Pepsi’s loss, Vita Coco’s design
Factual months sooner than Vita Coco’s IPO, both Coca-Cola and PepsiCo exited coconut water. Coke sold Zico help to its founder because it slimmed down its portfolio, and Pepsi offloaded O.N.E. as portion of the $3.3 billion sale of its juice industry.
Despite the beverage giants’ size, they had been unable to compete with Vita Coco, which is credited with bringing coconut water to the U.S. and gentle holds 50% portion of the market, moreover its inner most-ticket industry.
Their exits from the section opened a original distribution avenue for Vita Coca. As long as Coke and Pepsi had been in the coconut water industry, their contracts with venues ranging from stadiums to varsity campuses shut Vita Coco out.
With the momentum of original explain opportunities, Vita Coco is now pushing into bars and restaurants. The first step of the belief is teaming up with Diageo for three canned cocktails mixing Captain Morgan rum and Vita Coco coconut water: a mojito, a piña colada and a strawberry daiquiri.
“Ought to you shuffle to Brazil or Southeast Asia, coconut water is what you mix with cocktails,” Kirban mentioned. “The premise is to start getting patrons long-established to intriguing coconut water cocktails with the in a position to drink with Diageo partnership.”
Kirban mentioned Vita Coco might be partnering with a spirits firm for its broader on-premise expansion plans, but declined to name the partner.
Over the previous couple of years, alcohol and nonalcoholic beverage firms delight in been teaming up, leaning on every others’ ticket equity and ride to design so-called “portion of throat.” As an illustration, Captain Morgan can introduce itself to Vita Coco’s health-awake, younger patrons, whereas Vita Coco advantages from the rum’s mass market allure.
The morning after
Vita Coco has also been leaning into its reputation as a hangover “drugs.”
Since dull 2019, the logo has long-established Unique Yr’s Day as technique to pitch hangover restoration kits and subscriptions that feature its products in collaborations with Postmates, Lyft and Reef Kitchens.
This yr it be partnering with DoorDash for a promotion Monday morning following the Great Bowl.
The promoting technique is one thing of a reversal, after years of resisting the affiliation.
“With our board, there modified into continually a dialogue,” Kirban mentioned. “Ought to you yelp marketing, will we would like to chat about hangovers? Is that OK for us to chat about?”
And it be now now not carried out there. After the hangover subsides, Vita Coco wishes to be the non-dairy milk in your espresso.
In dull January, the logo launched it be partnered with Alfred Coffee, a high-give up chain with locations in California and Texas, to receive a non-dairy coconut milk for its baristas to use.
Vita Coco plans to magnify the product designed particularly for espresso — lower free the coconut milk it sells in supermarkets nationwide — to other espresso retail outlets and at closing to retailer shelves.
