Vita Coco sees growth in coconuts
Vita Coco wants to take coconut water deeper into the mainstream.
Why it matters: Investors remain thirsty for functional and healthy-for-you beverages.
Driving the news: The company raised its financial forecast for next year, signaling confidence that people are still going coconuts for coconut water.
The intrigue: The company sees an opportunity to add new brands and categories "to further expand the business even faster and add more and more scale," co-founder Mike Kirban tells Axios.
- Potential targets would be shelf-stable beverages that the company can make profitable with good gross margins.
Yes, but: "Valuation expectations have to work," he says. "You're seeing expectations start to normalize, but it's going to take some time," he adds.
Zoom in: The company plans to double down on marketing to drive consumer awareness.
- Already, it has pushed field marketing into gyms, bars, restaurants and clubs.
- "We started talking about it on social media, started getting mixologists and people making drinks with it," he says.
Details: In addition to playing with different sizes, formats and flavors, he believes in growth through different price points as well.
- Currently, the company does private label, has a value category, and a premium category called "Farmers Organic."
- Coconut water "pulls from juice, it pulls from premium bottled water, and it pulls from sports drinks," giving the company ample room to compete in each of those industries.
Catch up fast: In August 2021, Vita Coco's parent introduced Pwr Lift, a protein-infused water online.
- "We're expanding it to New York and some other markets this year," Kirban says, adding it's in limited markets now.
Zoom out: Kirban believes coconut water has a real stickiness with consumers.
- "They're not going to trade putting water or even apple juice in their smoothie necessarily because it's slightly less expensive," he says.
What's next: The company plans to expand distribution in grocery stores, convenience stores, and on-premise bars, restaurants, and clubs.
- It sees an opportunity to grow in the middle of the country and places where the brand hasn't deeply penetrated.
- It also eyes expansion into international markets in North America, Western Europe, and other parts of the world, "where coconut water historically wasn't known and wasn't a category."
1 Taylor Swift thing: Kirban says Taylor Swift drinking rum and coconut water at the VMAs gave another boost to the category.