NEW YORK, United States — Vita Coco, a ‘better-for-you brand’ in the functional beverage category has commenced an initial public offering in which it hopes to raise up to $224 million.
Since its launch in 2004, the brand co-founded by co-CEO Michael Kirban and Ira Liran has cemented itself as a pioneer in the functional beverage category, expanding its portfolio under ‘The Vita Coco Company’ to include its leading coconut water brand Vita Coco, clean energy drink Runa, sustainable enhanced water Ever & Ever and protein-infused water, PWR LIFT.
If successful, the company’s enterprise value at IPO would approximate $1.1 billion.
According to Seeking Alpha, company management says it will use the net proceeds from the IPO to:
“Repay outstanding borrowings under the Revolving Facility and the Term Loan Facility and for general corporate purposes, including working capital, operating expenses and capital expenditures.”
The source added: “ We may also use a portion of the net proceeds to acquire or make investments in businesses, products and offerings, although we do not have agreements or commitments for any material acquisitions or investments at this time.”
The move would also enable the beverage maker to capitalise on growing consumer demand for healthier offerings sharpened by the pandemic, which has seen its net sales rise by 17% year-on-year to $334 million in the 12 months ended June 30th 2021.
This spike in consumer demand is also predicted to help propel the global coconut water market towards a $16.4 billion market value by 2027, according to Grand View Research.
In a letter in the company’s prospectus ahead of its IPO, Kirban explained how despite facing tough competition from incumbent brands such as Coca Cola and PepsiCo, which have both entered its category through acquisitions, Vita Coco has:
“Out-hustled, out-innovated, and out-manoeuvred the competition. We battled with everything we had. And we won what has been dubbed, “The Coconut Water Wars”! Most importantly, we won because consumers loved our brand and stayed loyal to it.”
He added: “Now we are planning our next adventure, and we believe the best place for us to advance on this journey is in the public markets. We believe that being public will give us the currency to further accelerate our growth and offer us a platform to have a greater impact.”
According to Kirban, most healthy hydration companies are small, private and don’t have the scale to achieve their true potential. In contrast, The Vita Coco Company has spent seventeen years building one of the largest independently owned healthy hydration companies, and he believes this has built the framework for something much larger and more impactful.
“Today’s global beverage market is controlled mainly by behemoths who generate most of their profits from products that are not necessarily healthy for people or the planet,” he argued.
“21st-century consumers seek products and brands that are not only good for their bodies but better for society. Our values of aligning profit with purpose really resonate with our consumers.”
In plugging the enormous white spaces it believes still exist, the company believes
significant growth opportunities still exist for its core brand Vita Coco, through greater household penetration, distribution gains and innovation.
It also plans to create new healthy, functional beverages and to acquire brands that fit with its values.
The goal, Kirban revealed is to be the fastest growing and most impactful healthy hydration company in the world.
“When we win, so will our partners — whether consumers, retailers, employees, growers or investors,” he lamented.