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Vita Coco is returning to its fitness roots as more consumers turn to coconut water as a healthier alternative to sports drinks.
The beverage brand was founded by Mike Kirban and his friend Ira Liran after watching people in Brazil drink coconut water on the beach and at the gym. Recognizing an untapped market back in the U.S., they created the Vita Coco brand in 2004.
At first, Vita Coco found success by targeting hot yoga classes and striking partnerships with athletes such as baseball infielder Alex Rodriguez and football running back Marshawn Lynch. But over time, Vita Coco’s early focus on sports in the U.S. took a back seat to other, more promising opportunities.
The company noticed consumers used coconut water for a wider range of occasions, either to nurse a hangover or as an added ingredient in cocktails, smoothies and protein drinks. With a limited marketing budget, executives prioritized gaining household penetration for the fledgling brand by educating consumers on the different ways they could use Vita Coco.
Now, nearly two decades later, Vita Coco is making a bigger push for sports and fitness. The decision comes as the coconut water grabs market share from brands including Coca-Cola’s BodyArmor and Pepsico’s Gatorade.
Until recently, sports drink customers were responsible for one-third of its growth, but that pace “has accelerated,” according to Kirban.
“We’re really just coming back to where we started and back to the main message,” he said. “We’re very positioned to lean into that pretty hard.”
The billion-dollar-plus coconut water space as a whole has matured, with household penetration at roughly 25%, up sharply from a decade ago, Kirban added. Vita Coco has been a major contributor to that expansion, placing it in a more advantageous position to look for additional forms of growth.
Today, Vita Coco controls about half of the coconut water market in the U.S, and significantly more if you add in its private-label business.
Sales at the New York-based company, which has posted a five-year compound annual growth rate of 12.5%, totaled $516 million last year. Vita Coco is aiming to top the $1 billion threshold in the next four to five years through increased market penetration in the U.S., innovation and international expansion.
Promoting the beverage as a hydration source for sports and fitness not only increases usage occasions for Vita Coco, but also helps the company deepen its presence with younger consumers. Coconut water has seen an uptick in demand by Gen Z and millennials, consumers who are heavy users of sports drinks.
Coconut water has appealed to more shoppers due to its nutrient, vitamin and electrolyte content, as well as the absence of artificial dyes and flavors.
As part of its renewed push into sports, Vita Coco recently partnered with athletes from professional football, tennis, soccer and golf to promote the brand as a way to help their performance. In addition, it became the hydration sponsor of Rush Soccer, the largest youth soccer league in the world.
“We can use sports nutrition and sports hydration to bring in even younger consumers,” Kirban said, noting they can continue to drink Vita Coco in college and into adulthood. “That’s how things over time become a real household staple that is part of people’s lives for generations.”
