Coconut water Vita Coco turns into smoothies, hangover marketing
Vita Coco water.
Tim P. Whitby | Getty Images
For nearly two decades, Vita Coco sells its coconut water to health-conscious consumers as a fresh way to hydrate. This year he is changing the field.
The beverage company is promoting its eponymous brand in new cases and use cases by collaborating with Diageo on a canned cocktail and promoting the drink as a hangover cure.
related investment news
Co-founder Mike Kirban compared Vita Coco’s transformation to that of Ocean Spray, an agricultural co-op that sells cranberry products.
“Ocean Spray is a brand that is four times the size of ours, and it’s all based on one ingredient,” the company’s executive chairman told CNBC. “And we should get bigger than Ocean Spray pretty quickly because I think coconut is cooler than cranberry.”
Founded in 2004, Vita Coco started out as a coconut water brand but has since expanded into other beverage categories such as energy drinks and water. The namesake brand still accounts for three-quarters of the company’s revenue, which reached $335.8 million in the first nine months of 2022.
The company went public in October 2021, shortly before the initial public offering market dried up as inflation, the war in Ukraine and economic uncertainty weighed on investors.
Vita Coco shares have risen less than 1% since the IPO, but they are better than many other consumer companies that went public around the same time, for example Sweetgreen And Alberds.
In May, Kirban moved from co-CEO to his current position, leaving Boston beer veteran Martin Roper as sole CEO is another step in Vita Coco’s development.
Loss of Coke and Pepsi, acquisition of Vita Coco
Just a few months before Vita Coco’s IPO, both Coca Cola And PepsiCo the coconut water came out. Coke sold Zico back to its founder, reducing its portfolio, and Pepsi got rid of ONE as part of a $3.3 billion sale of its juice business.
Despite the size of the beverage giants, they have not been able to compete with Vita Coco, which famously brought coconut water to the US and still holds 50% of the market except for its own brand business.
Their departure from this segment opened up a new distribution path for Vita Coca. While Coke and Pepsi were in the coconut water business, their contracts with venues ranging from stadiums to college campuses excluded Vita Coco.
With new growth opportunities, Vita Coco is now moving into bars and restaurants. The first step of the plan is to team up with Diageo for three canned cocktails mixing Captain Morgan rum and Vita Coco coconut water: a mojito, a pina colada and a strawberry daiquiri.
“If you go to Brazil or Southeast Asia, coconut water is what you mix into your smoothies,” Kirban said. “The idea is to start educating consumers about coconut water shakes with ready-to-drink drinks in partnership with Diageo.”
Kirban said Vita Coco would partner with the alcohol company on its broader local expansion plans, but declined to name a partner.
Over the past few years, alcoholic and non-alcoholic beverage producers have teamed up, drawing on each other’s capital and experience, to get a so-called “throat share”. For example, Captain Morgan can present itself to health-conscious younger Vita Coco consumers, while Vita Coco capitalizes on the mass-market appeal of rum.
In the next morning
Vita Coco also builds on its reputation as a “hangover cure”.
Since the end of 2019, the brand has used New Years as a way to introduce hangover cure and subscription kits featuring its products in collaboration with Postmates, Lyft and Reef Kitchens.
This year he is collaborating with DoorDash for promotion on the Monday morning after the Super Bowl.
The marketing strategy is something of a reversal after years of resisting the association.
“There was always discussion with our council,” Kirban said. “When you talk about marketing, do we want to talk about hangovers? Is it okay for us to talk about it?”
And it is not done there. After the hangover subsides, Vita Coco will become the non-dairy milk in your coffee.
In late January, the brand announced a partnership with Alfred Coffee, a chain of high-end establishments in California and Texas, to create non-dairy coconut milk for its baristas.
Vita Coco plans to distribute a product designed specifically for coffee, separate from the coconut milk it sells in supermarkets across the country, to other coffee shops and eventually to store shelves.
Source link
