Vita Coco hasn’t been able to fully stock grocery fridges with its coconut water for months, but co-founder and co-CEO Mike Kirban said that hasn’t stopped the beverage company from gaining new customers.
“We haven’t been fully in stock for 18 to 24 months, but at the same time, we’ve grown our business substantially,” Kirban said in an interview. “Not only are we able to keep up, we’re able to accelerate growth even with empty shelves out there.”
In the six months ended June 30, the company’s net sales climbed 15.2% to $177.3 million.
Like many businesses, Vita Coco has been dealing with supply chain challenges caused by the pandemic, like higher costs for shipping containers and delays at ports. But Kirban said the company is unique because of the long-term contracts it struck with coconut manufacturers who agreed to sell coconut water, a byproduct of their production processes, to Vita Coco. As a result, it hasn’t paid more for the key ingredient, even as beverage giants like Coca-Cola and PepsiCo hike their prices to deal with higher commodity costs.
Vita Coco’s strong supply chain helped the company beat Coke and Pepsi when the two companies tried to enter the coconut water market more than a decade ago, according to Kirban.
The beverage company made its public market debut Thursday, trading on the Nasdaq under the symbol “COCO.” Its initial public offering was priced at $15 a share, below its targeted range of $18 to $21 per share. The IPO raised $173 million for the company, giving it an implied valuation of more than $830 million. Vita Coco’s stock opened at $15.37 per share but fell in afternoon trading by nearly 4%, trading at $14.42 per share.
Founded in 2004, Vita Coco started as a coconut water brand but has expanded into other beverage categories, like energy drinks and water. Still, coconut water accounted for 84% of its sales last year. The company positions itself as an upstart with a healthier portfolio than Coke and Pepsi. In 2020, Vita Coco’s net sales rose 9.4% to $310.6 million. The company reported net income of $32.7 million, up from the prior year’s net income of $9.4 million.
Kirban said that the company’s primary focus is growing coconut water sales, but Vita Coco is also expanding its smaller brands, like Ever & Ever water, and considering acquisitions that would make sense for the company’s portfolio.
Other food and beverage companies that have gone public this year have seen their stocks struggle after successful market debuts. For example, shares of Oatly, which makes oat-based dairy alternatives, have tumbled 29% since its IPO in May.