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Coconut water brand Vita Coco hits Nasdaq, the valuation may exceed $2 billion

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On September 27, EST, the coconut water brand Vita Coco filed an S-1 prospectus with the SEC and planned to list it on the NASDAQ under the ticker symbol “COCO.” Underwriters for the IPO include Goldman Sachs, Bank of America, UBS and others. According to Bloomberg and Seeking Alpha, Vita Coco’s IPO valuation may exceed $2 billion.

01.

Background

Vita Coco was founded in 2004; initially, only one category of coconut water, later expanded to coconut plant milk, coconut oil and many other products. The company’s shareholders include the Verlinvest family, Matthew McConaughey, Demi Moore, Madonna, and the parent company of Red Bull China, Huabin Group.

02.

Market achievement

With the help of Madonna and other celebrities, Vita Coco quickly spread its image as a “natural sports drink” in the European and American markets.

According to IRI Custom Research, Vita Coco is the leading coconut water brand processed with aseptic cold bottling production facility, with a 46% market share in the U.S., 36 percentage points ahead of second place, according to the prospectus.

According to the prospectus, Vita Coco will have net sales of $311 million and net income of $32.69 million in 2020, compared to net income of only $9.42 million for the same period in 2019.

For the first half of 2021, Vita Coco’s net sales were $177 million, up 15% year-over-year, with revenue primarily generated by Vita Coco Coconut Water, which saw a 29% increase in net sales.

In 2014, Vita Coco raised $166 million by selling a 25% stake to Red Bull China’s parent company, Huabin Group, at a valuation of $665 million. They entered into a strategic partnership and established Vita Coco China, with Huabin Group enjoying distribution rights for Vita Coco in Greater China.

As of June 30 this year, Vita Coco’s Asia Pacific business accounted for 15% of its international business; according to IRI UK, Vita Coco has a market share of over 70% in the U.K. and is still in its infancy in other European and Asian countries. As of June 30, 2021, Vita Coco’s international business is approximately 60% in Europe, 15% in the Asia Pacific and 25% in other regions.

The coconut water category has expanded as sales figures for health beverages have grown globally due to the epidemic. According to Euromonitor data, the global coconut water market has expanded to $2 billion. And according to the prospectus, Vita Coco sales also grew by more than 100% year on year during the pandemic. They expanded to 24 countries or regions for sale.

03.

China market

In the Chinese market, the consumption habits of coconut water, which normally adopted cold aseptic filling machine production, are far less mature than in Europe and the United States. Under the influence of the plant protein base, plant-based drinks such as oat milk, soy milk and almond milk also performed more strongly. Soy milk, in particular, has a more consumer base in China.

04.

Competition and chanlenge

There are currently six coconut water brands in the Chinese market. According to the prospects, coconut water sales volume increased by 13% year-on-year in 2018, with sales increasing by 60% year on year for Vita Coco China.

Coconut water is one of the world’s most popular health drinks next to acerola and coconut milk. According to Euromonitor data, coconut water accounts for nearly 50% of coconut beverages and has a compound annual growth rate of 8%.

However, coconut water is more prevalent among young people and women than among men, with a penetration rate of 36% for females and 27% for males. Euromonitor data also shows that coconut water has the highest penetration in South America and Oceania.

The prospectus indicated that as coconut water becomes increasingly ubiquitous, the market is facing a situation of coconut water’s nutritional value has been diluted.

In addition, the coconut industry is still facing various challenges such as environmental and economic damage to coconut palm plantations and coconut markets and other problems. Faced with these challenges, coconut beverages need to improve their image as healthy drinks for consumers who care about health and nutrition.

05.

Strategies

In this regard, coconut water has a greater selling point. Vita Coco said it does not have to use coconut sap as the raw material for coconut water production and will not damage coconut markets and coconut palm plantations. The coconut drink is made from coconut fruit, which is the only part of the coconut plant that can be consumed by humans after being processed.

Vita Coco coconut water is produced by cold pressing the coconut pulp directly in traditional coconut areas in Latin America without adding any artificial ingredients or heat treatment. Vita Coco coconut water contains coconut fruit (coconut milk) and coconut juice (liquid naturally filtered through young coconut meat) with high nutritional value, rich in potassium, low-calorie coconut water containing coconut, coconut oil and coconut milk. In addition, coconut water is a natural source of electrolytes such as potassium and magnesium, which have been clinically proven to have physiological effects on the human body after drinking coconut water.

In addition, Vita Coco claims to use aseptic packaging technology that does not require additional or special equipment because coconut water can be stored at room temperature without changing its flavor and nutrients for an extended period.

The company also has a partnership with the World Food Programme, which helps children in countries where coconut water is produced to receive healthy meals before and after school, as well as to improve hygiene conditions through building clean latrines and sanitation facilities. This contributes to coconut water’s reputation as a healthy and nutritious drink.

Vita Coco aims to become the world’s leading coconut water brand by building on its unique coconut cultivation heritage, coconut water technology, coconut taste integration platform, product diversification strategy and strong distribution network in both developed economies and emerging markets.

06.

Opportunity

According to Euromonitor International’s coconut water reports, coconut water is expected to achieve compound annual growth rates of 8% and 19%, respectively, in the next five years. The market size of coconut beverages will be close to $ 3 billion by 2022, according to Euromonitor International forecasts.

Vita Coco is growing rapidly with its high-quality coconut water and coconut drinks, as well as expanding its product portfolio, innovative packaging design and efficient supply chain to increase the company’s market share. coconut water brand Vita Coco (Vita Coco) hit the milestone of $1 billion in sales last year and is expected to have a market value exceeding $2 billion after going public on Thursday.

In the US capital market, coconut water is an emerging product category which has not yet been successfully marketed by other companies. And coconut water brand Vita Coco’s coconut drink has the advantage of being produced from coconut palms that are part of coconut plantations in countries where coconut water is produced, which ensures the quality and safety of coconut drinks.

Vita Coco coconut water brand may be the coconut product category’s best chance at becoming a public company listed in US markets.

The best way to store your cans of soda, so they stay fresh longer than their expiration date is to keep them cold and preferably in the dark. The refrigerator is a pretty good place, as it’s about 38 degrees on average. Still, if that’s too crowded for your taste, you can try a basement or bar where you know they’ll be sitting stationary most of the time. Another trick is to store cans with their tops off so air can circulate around them, not only preserving carbonation longer but also protecting from bacteria buildup. Once open, pop your sodas into the fridge as soon as possible before they go flat.

07.

Where can I find more information about these Information if needed?

At iBottling, we provide more information on juice beverage filling machines through our website. If you have any other questions or comments, please do not hesitate to contact us via email at 1@ibottling.com! We are always looking for better ways to improve the customer experience, so please just let us know if there’s anything else!

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