Vita Coco wants its coconut water be your cocktail mixer — and your hangover cure

For astir 2 decades, Vita Coco has sold its coconut h2o to health-conscious consumers arsenic a caller mode to hydrate. This year, it's changing the pitch.

The beverage institution is pushing its namesake marque into caller usage cases and occasions, partnering with Diageo connected a canned cocktail and selling the portion arsenic a hangover aid.

Co-founder Mike Kirban compared Vita Coco's translation to that of Ocean Spray, the cultivation cooperative that sells cranberry products.

"Ocean Spray is simply a marque that's 4 times our size, that's each based connected 1 ingredient," the company's enforcement president told CNBC. "And we should beryllium bigger than Ocean Spray beauteous quickly, due to the fact that I deliberation the coconut is cooler than the cranberry."

Founded successful 2004, Vita Coco started arsenic a coconut h2o marque but has since expanded into different beverage categories, similar vigor drinks and water. Its namesake marque inactive accounts for three-quarters of the company's revenue, which reached $335.8 cardinal successful the archetypal 9 months of 2022.

The institution went public successful October 2021, conscionable earlier the marketplace for archetypal nationalist offerings dried up arsenic inflation, the warfare successful Ukraine and economical uncertainty weighed connected investors.

Vita Coco's banal is up little than 1% since its IPO, but it's fared amended than galore different user companies that went nationalist astir the aforesaid time, similar Sweetgreen and Allbirds.

In May, Kirban transitioned from co-CEO astatine the institution to his existent role, leaving Boston Beer seasoned Martin Roper arsenic the sole main enforcement — different measurement of Vita Coco's evolution.

Just months earlier Vita Coco's IPO, some Coca-Cola and PepsiCo exited coconut water. Coke sold Zico backmost to its laminitis arsenic it slimmed down its portfolio, and Pepsi offloaded O.N.E. arsenic portion of the $3.3 cardinal sale of its foodstuff business.

Despite the beverage giants' size, they had been incapable to vie with Vita Coco, which is credited with bringing coconut h2o to the U.S. and inactive holds 50% stock of the market, excluding its private-label business.

Their exits from the conception opened a caller organisation avenue for Vita Coca. As agelong arsenic Coke and Pepsi were successful the coconut h2o business, their contracts with venues ranging from stadiums to assemblage campuses unopen Vita Coco out.

With the momentum of caller maturation opportunities, Vita Coco is present pushing into bars and restaurants. Step 1 of the program is teaming up with Diageo for 3 canned cocktails mixing Captain Morgan rum and Vita Coco coconut water: a mojito, a piña colada and a strawberry daiquiri.

"If you spell to Brazil oregon Southeast Asia, coconut h2o is what you premix with cocktails," Kirban said. "The thought is to commencement getting consumers utilized to drinking coconut h2o cocktails with the acceptable to portion with Diageo partnership."

Kirban said Vita Coco would beryllium partnering with a spirits institution for its broader on-premise enlargement plans, but declined to sanction the partner.

Over the past fewer years, intoxicant and nonalcoholic beverage companies person been teaming up, leaning connected each others' marque equity and expertise to summation alleged "share of throat." For example, Captain Morgan tin present itself to Vita Coco's health-conscious, younger consumers, portion Vita Coco benefits from the rum's wide marketplace appeal.

Vita Coco has besides been leaning into its estimation arsenic a hangover "cure."

Since precocious 2019, the marque has utilized New Year's Day arsenic mode to transportation hangover betterment kits and subscriptions that diagnostic its products successful collaborations with Postmates, Lyft and Reef Kitchens.

This twelvemonth it's partnering with DoorDash for a promotion Monday greeting pursuing the Super Bowl.

The selling strategy is thing of a reversal, aft years of resisting the association.

"With our board, determination was ever a discussion," Kirban said. "When you speech marketing, bash we privation to speech astir hangovers? Is that OK for america to speech about?"

And it's not done there. After the hangover subsides, Vita Coco wants to beryllium the non-dairy beverage successful your coffee.

In precocious January, the marque announced it's partnered with Alfred Coffee, a high-end concatenation with locations successful California and Texas, to make a non-dairy coconut beverage for its baristas to use.

Vita Coco plans to grow the merchandise designed specifically for java — abstracted from the coconut beverage it sells successful supermarkets nationwide — to different java shops and yet to store shelves.