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Vita Coco needs its coconut water to be your cocktail mixer — and your hangover remedy

Vita Coco water.

Tim P. Whitby | Getty Pictures

For almost 20 years, Vita Coco has bought its coconut water to health-conscious shoppers as a recent technique to hydrate. This yr, it is converting the pitch.

The beverage corporate is pushing its namesake emblem into new use instances and events, partnering with Diageo on a canned cocktail and advertising the drink as a hangover assist.

Co-founder Mike Kirban in comparison Vita Coco’s transformation to that of Ocean Spray, the rural cooperative that sells cranberry merchandise.

“Ocean Spray is a emblem that is 4 instances our dimension, that is all in keeping with one component,” the corporate’s government chairman instructed CNBC. “And we will have to be larger than Ocean Spray lovely briefly, as a result of I believe the coconut is cooler than the cranberry.”

Based in 2004, Vita Coco began as a coconut water emblem however has since expanded into different beverage classes, like power beverages and water. Its namesake emblem nonetheless accounts for three-quarters of the corporate’s income, which reached $335.8 million within the first 9 months of 2022.

The corporate went public in October 2021, simply sooner than the marketplace for preliminary public choices dried up as inflation, the battle in Ukraine and financial uncertainty weighed on traders.

Vita Coco’s inventory is up lower than 1% since its IPO, however it is fared higher than many different shopper firms that went public round the similar time, like Sweetgreen and Allbirds.

In Would possibly, Kirban transitioned from co-CEO on the corporate to his present function, leaving Boston Beer veteran Martin Roper as the only leader government — some other step of Vita Coco’s evolution.

Coke and Pepsi’s loss, Vita Coco’s acquire

Simply months sooner than Vita Coco’s IPO, each Coca-Cola and PepsiCo exited coconut water. Coke bought Zico again to its founder because it slimmed down its portfolio, and Pepsi offloaded O.N.E. as a part of the $3.3 billion sale of its juice trade.

Regardless of the beverage giants’ dimension, they’d been not able to compete with Vita Coco, which is credited with bringing coconut water to the U.S. and nonetheless holds 50% proportion of the marketplace, with the exception of its private-label trade.

Their exits from the phase opened a brand new distribution street for Vita Coca. So long as Coke and Pepsi had been within the coconut water trade, their contracts with venues starting from stadiums to university campuses close Vita Coco out.

With the momentum of latest expansion alternatives, Vita Coco is now pushing into bars and eating places. Step some of the plan is teaming up with Diageo for 3 canned cocktails blending Captain Morgan rum and Vita Coco coconut water: a mojito, a piña colada and a strawberry daiquiri.

“Should you pass to Brazil or Southeast Asia, coconut water is what you combine with cocktails,” Kirban mentioned. “The speculation is to start out getting shoppers used to consuming coconut water cocktails with the able to drink with Diageo partnership.”

Kirban mentioned Vita Coco can be partnering with a spirits corporate for its broader on-premise enlargement plans, however declined to call the spouse.

Over the previous few years, alcohol and nonalcoholic beverage firms were teaming up, leaning on every others’ emblem fairness and experience to achieve so-called “proportion of throat.” As an example, Captain Morgan can introduce itself to Vita Coco’s health-conscious, more youthful shoppers, whilst Vita Coco advantages from the rum’s mass marketplace enchantment.

The morning after

Vita Coco has additionally been leaning into its recognition as a hangover “remedy.”

Since past due 2019, the emblem has used New Yr’s Day as technique to pitch hangover restoration kits and subscriptions that characteristic its merchandise in collaborations with Postmates, Lyft and Reef Kitchens.

This yr it is partnering with DoorDash for a promotion Monday morning following the Tremendous Bowl.

The business plan is one thing of a reversal, after years of resisting the affiliation.

“With our board, there was once at all times a dialogue,” Kirban mentioned. “Whilst you communicate advertising, can we wish to speak about hangovers? Is that OK for us to speak about?”

And it is not finished there. After the hangover subsides, Vita Coco needs to be the non-dairy milk on your espresso.

In past due January, the emblem introduced it is partnered with Alfred Espresso, a high-end chain with places in California and Texas, to create a non-dairy coconut milk for its baristas to make use of.

Vita Coco plans to make bigger the product designed in particular for espresso — become independent from the coconut milk it sells in supermarkets national — to different espresso stores and in the end to retailer cabinets.

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