By Mike Esterl
Vita Coco, the top-selling coconut water brand in the U.S., is
making a big global push.
A decade after being first delivered to New York bodegas on
inline skates, it is now sold in about 30 countries, twice as many
as a year ago, said Michael Kirban, co-founder and chief executive
of closely held All Market Inc., which owns Vita Coco.
About 30% of revenue will be generated outside the U.S. this
year, with the company on track to book another year of
double-digit sales growth overall, he added in an interview. New
markets since late 2014 include China, New Zealand and Spain, with
South Africa planned for later this year.
Global retail sales of Vita Coco rose 31% last year to $421.1
million, surpassing PepsiCo Inc.'s (PEP) Kero Coco brand for the
first time, according to Euromonitor. Long popular in countries
like Brazil and India, coconut water remains a niche category in
most of the world but is growing quickly.
Coca-Cola Co. (KO) veteran Mike Shepherd is overseeing the
expansion in Asia Pacific, where Vita Coco is currently distributed
in nine countries. He joined All Market in April after 15 years at
the soft drink giant, most recently as general manager for Hong
Kong, Taiwan and Mongolia.
Mr. Shepherd expects to have a regional team of 10 to 12 people
in Hong Kong by the end of the year, in addition to existing
offices in Japan, South Korea, the Philippines and Singapore.
New York-based All Market sold a roughly 25% stake to Beijing's
Reignwood Group for about $165 million last year. Reignwood is the
exclusive distributor of Red Bull energy drinks in China and is now
slowly rolling out Vita Coco in the country.
Mr. Kirban said Vita Coco is now in about 15,000 stores in three
Chinese cities and expects to expand distribution to 40,000 stores
by this summer. The company launched a multimillion-dollar
marketing campaign in the country earlier this year, including
digital, magazine and billboards ads.
"If China keeps going like it's going, it could be 40% of the
overall business in three to five years," said Mr. Kirban. So far,
though, it is only about 3% of the company revenue.
The company says sales in Europe are up about 80% from last
year. It says it now sells more Vita Coco in London than in New
York.
In the U.S., where Vita Coco has an estimated 40% market share,
sales are growing around 30% this year, according to the company.
Mr. Kirban is overseeing daily operations in the U.S. after country
president Jeff Popkin left the company earlier this month.
Vita Coco's main competitors in the U.S. are Coke, which owns
the Zico coconut water brand, and PepsiCo, which owns O.N.E. and
Naked. Dr Pepper Snapple Group Inc. (DPS) handles the bulk of Vita
Coco's U.S. distribution.
Mr. Kirban said All Market has had conversations with potential
buyers in recent years other than Reignwood about selling stakes in
the business, but that there are no talks currently.
Mr. Kirban, co-founder Ira Liran and Belgian investment firm
Verlinvest together own more than 50% of All Market. About 10% is
owned by other shareholders, including employees.
Writer to Mike Esterl at mike.esterl@wsj.com
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