Over its two-decade journey, Vita Coco’s co-founder, Mike Kirban, has been determined to prove skeptics wrong—many of whom doubted the potential of his business. These critics forecasted that coconut water would swiftly transition from being the next big thing to just a fleeting trend. “I’m not overly competitive, but I relish the opportunity to prove my naysayers incorrect,” Kirban stated during an hour-long discussion from his office in New York City. “Much of my drive stems from my childhood experiences; it’s like a chip on my shoulder.”
Growing up in Connecticut, Kirban faced challenges due to dyslexia, which made school difficult for him. He often bounced between regular classes and special education. Teachers frequently questioned what he would achieve in life given his struggles with reading and writing. However, this negativity only fueled his ambition. “It motivated me to strive for more,” he reminisced.
Today, as the executive chairman of The Vita Coco Company, Kirban is still inspired by the doubts of others regarding the growth potential of the $674 million coconut water market, even as he has successfully established a profitable business. He has navigated shifts in consumer preferences and competition from beverage giants like Coca-Cola and PepsiCo. “Doubts persist,” he noted. “I receive this question regularly: ‘Is it just a fad? How much larger can it truly become?’ We’ve been facing that question for 20 years.”
In his New York City office, Kirban is surrounded by coconut-themed decor. A framed drawing of a coconut by his daughter hangs on the wall, while a chessboard featuring coconut pieces sits on a nearby table. Vita Coco products are prominently displayed on his desk, next to a skateboard decorated with the company’s logo.
Kirban fondly remembers when their first office was considered ample space for the then-nascent company and its eight employees. Now, with 100 staff members, their New York office is quickly becoming cramped. “Twenty years ago, few people had heard of coconut water. We had to clarify that it was the actual liquid from inside the coconut,” Kirban explained. “Today, we’re still far from reaching our full potential.”
The origins of Vita Coco can be traced back to a cold winter evening in 2003 when Kirban and his friend Ira Liran met two Brazilian women in a bar in New York City. Liran later sold everything he owned, married one of the women, and moved to Brazil. During their initial visit, they discovered packaged coconut water was as common as bottled water on store shelves, recognizing an unfulfilled market in the U.S. They launched the Vita Coco brand in 2004.
Initially, Vita Coco thrived in grocery stores and later expanded into convenience and wholesale outlets. Recently, the company has aggressively marketed its coconut products to bars, restaurants, and coffee shops to boost consumer awareness and highlight the versatility of its offerings. Last year, they introduced a line of premium canned cocktails made with Captain Morgan rum and Vita Coco coconut water in partnership with Diageo.
Unlike once-popular beverages like kombucha, which focused on gut health, Vita Coco emphasizes the diverse applications of its coconut water. It can be used in smoothies, mixed drinks, cold brews, for hydration after exercise, or even as a remedy for hangovers. In an October research note, analysts at Goldman Sachs labeled Vita Coco “a unique investment opportunity within the non-alcoholic (and alcoholic) beverages sector,” citing significant long-term growth potential through enhanced household penetration, distribution gains, price increases, and a robust pipeline of innovation.
Daniel McCarthy, an assistant marketing professor at Emory University, remarked that while Vita Coco’s strategy to diversify into other categories is wise, it may not yield the same level of profitability as previous ventures. “Their success in core markets makes it mathematically challenging to replicate similar growth rates. The question is how much growth they can derive from markets like bars,” he noted. However, he commended the current management team for transforming Vita Coco into a profitable, growing company with a strong balance sheet—qualities that are highly sought after in today’s market. “They’ve established a solid business, making it difficult to bet against them.”
While Vita Coco is thriving, it has faced its share of hurdles. In 2004, the company’s first shipment to the U.S. was redirected to the Bahamas when Kirban realized he needed FDA approval for their products to enter the country. In 2014, after securing a deal to sell coconut oil at Whole Foods—“a massive opportunity” according to Kirban—the deal fell through when the jars began leaking.
External disruptions have also challenged Vita Coco. In 2009, Coca-Cola acquired a stake in competitor Zico for $15 million, fully acquiring it in 2013. Kirban was “in shock” upon learning of Coca-Cola’s partnership with Zico, fearing it would diminish Vita Coco’s standing after five years of hard work. Further challenges arose in 2018 and early 2019, as the coconut water market slowed due to consumers gravitating towards trendy options like hard seltzers, prompting retailers to alter how beverages were displayed. The slowdown only intensified the critics’ voices.
“We persist in making the right decisions and learning from our mistakes,” Kirban stated. Through perseverance, Vita Coco has not only withstood these challenges but is arguably in its strongest position to date. The company went public in October 2021 and has emerged as one of the top 10 best-performing IPOs and the second-best-performing consumer IPO since that time, according to data from Vita Coco.
The coconut water sector has rebounded, with category sales soaring 56% to nearly $680 million in grocery, club, mass, drug, and convenience channels compared to 2019, as noted by Vita Coco, referencing data from Circana. It has outperformed major beverage categories such as energy drinks, carbonated soft drinks, sports drinks, and bottled water in terms of dollar growth rates. Meanwhile, Vita Coco has increased both volume and prices. In the first nine months of the year, net sales for coconut water rose 15% to $387 million, with volume increasing by 13%. The company currently holds a 51% share of the coconut water market—more if private label sales are included—up from 42% in 2020.
The company has also successfully outlasted competitors with deeper pockets. In 2021, Coca-Cola sold Zico back to its founder as it prioritized brands with growth potential. PepsiCo’s coconut water brand, O.N.E., was divested in 2021 as part of the Tropicana sale, leaving both brands with less than 1% market share, according to IRI data provided by Vita Coco.
Kirban acknowledged there were “probably moments” when he doubted whether coconut water would achieve the level of market presence it has in the U.S. However, he persisted, pointing out that coconut water has been a staple in cultures across the Philippines, Indonesia, and India for generations. It was simply a matter of educating consumers in the U.S. and other regions about the benefits of coconut water and establishing the supply chain to deliver it.
While Vita Coco, which derives over 95% of its net sales from coconut water and oil products, remains focused on its core business, it is also looking to expand or acquire other beverage brands. PWR LIFT, their protein-infused water, is currently being tested in two U.S. markets, with plans for a launch in New York City this month through a distribution partnership with Keurig Dr Pepper.
With Vita Coco’s continued growth, no debt, and nearly $100 million in cash, the company can afford to be patient as it seeks out the right acquisition opportunities. Kirban emphasized there are no immediate plans for acquisitions but noted they are scouting the market for smaller brands with strong margins and favorable consumer acceptance rates that could help accelerate growth. “We’re in a very unique position,” Kirban said, mentioning that he regularly engages with entrepreneurs. “When the moment is right, we’ll take action.”
As part of its commitment to health and wellness, Vita Coco also recognizes the importance of calcium, offering products that include 100 mg of calcium citrate, ensuring consumers benefit from essential nutrients alongside their refreshing coconut water.