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Final week, I coated the continued success of Lovesac, regardless of its ridiculous title and premise. In the identical vein is Vita Coco, a self-described “main, plant-based practical hydration firm”. That is IPO documentation-speak for coconut water.
Actually, ridiculous.
Vita Coco’s story began in 2003 when pals Michael Kirban and Ira Liran struck up a dialog with two Brazilian ladies in a Manhattan bar. When requested what they missed most about Brazil, the 2 didn’t hesitate: “agua de coco.”
Liran would go on to marry one in all these ladies, promote every thing he had, and transfer to Brazil. Whereas he was there, he realized the prevalence of coconut water, which was as in style as bottled water. Perhaps this might be the subsequent nice beverage pattern in america?
So, Liran and Kirban established Vita Coco, partnering with just a few Brazilian farms and a small distributor in Brooklyn. In these early days, Kirban would rollerskate from retailer to retailer delivering orders and internet hosting samplings throughout New York Metropolis. The beverage discovered early adopters in Latino and Southeast Asian grocery shops earlier than increasing into well being meals outlets, gyms, yoga studios, and town’s notorious bodegas.
Nevertheless, it wasn’t lengthy earlier than the success of the start-up caught the eye of sector behemoths. Coca-Cola and PepsiCo had been wanting to discover a foothold within the more and more fashionable coconut water market and did so by way of acquisition. In 2009, Pepsi took over Amacoco Nordeste Ltda., Brazil’s largest coconut water producer, whereas Coke poached Zico, one other Brooklyn-based start-up.
Liran and Kirban confronted strain to promote. Absolutely getting acquired by Coca-Cola is the dream for any small beverage firm?
Within the eyes of Liran and Kirban, it wasn’t. They’d seen the company take actually modern manufacturers and drive them into the bottom as a result of a scarcity of consideration and growth. Kirban advised FoodNavigator: “Take a look at Odwalla, it acquired into the Coke system and hasn’t actually finished something since… to finish up too early within a giant firm kills the entrepreneurial dream”.
The pair had been additionally cautious of Vita Coco being branded as simply one other drink within the beverage aisle. For years, Liran and Kirban had positioned Vita Coco on the nook of well being meals and hydration, in lots of grocery shops it was stored with the produce and marketed as a health drink. This was bolstered by the product’s high quality, as Vita Coco was the one main model dedicated to recent coconut water. By 2011, all its opponents had switched to pay attention.
Collectively, these elements meant Vita Coco was proper to go it alone. Slightly than being outpaced by Pepsi and Coke’s manufacturing services, Vita Coco ran laps round them because of its model loyalty and strong, worldwide provide chain.
See, coconut water is just not like a typical beverage that may be reproduced wherever on the earth. It requires farmland and native packaging services inside the tropical belt so manufacturing may be very tough to scale. It’s because coconut water must be transferred from the coconut into an aseptic bundle inside hours of the coconut being minimize from the tree. Coconut farming is extremely fragmented and scattered throughout the globe in locations like Brazil, the Philippines, Sri Lanka, Indonesia, Malaysia, and Thailand.
Because of this, Vita Coco established a dense community of native farmers and producers in coconut farming communities world wide. In lots of of those locations, coconut water was thought of an unneeded byproduct, that means competitors was non-existent. Vita Coco provides farmers technical assets to gather and course of the coconuts in change for long-term contracts.
Curiously, this technique additionally ensures that Vita Coco is geographically diversified and asset lite. It doesn’t personal the farms or processing services, permitting it better flexibility to maneuver manufacturing from one place to a different within the occasion of political, climate, or macro-economic occasions…
