Vita Coco co-CEO says shipping costs, port delays haven’t slowed growth
Vita CocoAlthough it has been difficult to stock all of its coconut water in grocery refrigerators for several months, Mike Kirban, co-CEO and founder of the company, said that this has not stopped them from expanding their customer base.
Kirban explained that while we have not been fully in stock in the last 18-24 months, our business has grown substantially. Kirban spoke to me in an interview. We are able not only to keep up but we can also accelerate growth with empty shelves.”
The company’s net sales increased 15.2% to $177.3 Million in the six-months ended June 30.
Vita Coco is not alone in dealing with challenges related to the pandemic. Kirban stated that Vita Coco is unique due to the long-term agreements it made with coconut producers who agreed to supply coconut water as a result of their manufacturing processes to Vita Coco. It hasn’t had to pay more for this key ingredient even though beverage giants such as Vita Coco have. Coca-Cola PepsiCoTo deal with rising commodity prices, they will raise their prices.
Kirban says Vita Coco was able to beat Pepsi and Coke when they tried to enter coconut water more than 10 years ago.
Thursday saw the beverage company make its debut on the public markets. The stock traded on Nasdaq with the symbol COCO. The initial public offering of the beverage company was priced at $15 per share. This is below the target range of $18-$21 per share. It was valued at more than $830million by the implied value of $173 million. Vita Coco shares opened at $15.37 per shill but declined by nearly 4 percent in the afternoon trading, closing at $14.42 per shill.
Vita Coco was founded in 2004 as a brand of coconut water. However, it has since expanded to other beverages like water and energy drinks. Yet, the company’s 84% share of sales was still attributed to coconut water. It is a new company that has a better portfolio than Pepsi and Coke. Vita Coco’s 2020 net sales increased 9.4%, to $310.6 millions. This is an increase of 9.4% from last year’s $9.4 million net income. The net income for the company was $32.7million.
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.
Others food and drink companies have struggled to make it public after making a successful debut on the market. The shares of OatlyThis company produces oat-based milk alternatives. have tumbled 29% since its IPO in May.