Judging from the high frequency of "coconut-flavored products", 2021 may be the well-deserved "first year of coconut." In April, there is Luckin’s raw coconut latte, in June there is Naixue’s colorful raw coconut, and in July, there is the raw coconut coconut of Hey Tea. Recently, the veteran coconut water brand Vita Coco went on the market.
On October 21, Vita Coco was listed on the Nasdaq under the stock code "COCO". The IPO price was set at US$15/share, which was lower than the estimated price range of US$18-21/share, and its performance on the first day of listing was poor. Good, and finally closed down 9.87%.
Vita Coco is an American coconut faucet brand, with a market share of 46% in the United States, and the second place with a market share of only 10%. Its history dates back to 2003. The founder took inspiration from Brazilian coconut water "agua de coco" and introduced it to the United States. At that time, pure coconut water products were still blank in the US market.
Different from the raw squeezed coconut milk from cooked coconut meat, coconut water is directly taken from fresh young coconuts, quickly pasteurized, and then packed into storage-resistant Tetra Pak packaging. It is a healthier, natural sweet drink. Therefore, Vita Coco calls itself "natural water that grows on trees." However, in order to unify the taste, Vita Coco added a small amount of fructose and vitamin C.
In 2014, Vita Coco officially entered the domestic market. Reignwood Group, the parent company of Red Bull China, reached a strategic partnership with Vita Coco in the form of acquiring a 25% stake. With the help of Reignwood Group’s ability to distribute goods, the product has covered retail giants such as Hema, Yonghui, Wal-Mart, and Sam's Club. During peak seasons, you can see Vita coco appearing in prominent locations in hypermarkets and subway stations with high traffic. advertise.
But compared to coconut milk and raw coconut latte, coconut water is still tepid in China. As of the first half of this year, Vita Coco's Asia Pacific business accounted for 15% of the international business, while the European market accounted for 60%.
Vita coco is often chosen because it is "natural, healthy and delicious." For lovers, it is a drink that "drinks better than water without the astringent taste of tea"; for others, it has a "strange taste and a rotten taste." Different people have different tastes, but coconut water is more fixed in this respect, unlike the more popular soy milk that can adjust the formula.
▲ Picture from: unsplash
There are more factors that limit coconut water. First of all, the unit price of around 10 yuan persuaded many consumers; second, there are many alternative products for coconut water, which existed in the past and have been expanding in recent years, including pure tea, sugar-free sparkling water, real juice tea, and plant-based tea. Drinks, etc.; Moreover, unlike coconut water, coconut water is mostly imported products with higher costs, and distributors are liable to bear the risk of impending loss.
In addition, according to the US Stock Research Agency, Vita Coco's coconut water is not directly manufactured by the company, but is outsourced to partners for production and production. In other words, the quality of its products depends on the cooperating manufacturers and packagers, which is naturally constrained. The prospectus shows that recent supply chain tensions and port restrictions after the impact of the epidemic have led to a significant increase in shipping costs, which has lowered gross margin performance.
▲ Picture from: CBNData "2021 Beverage Consumption Trend Insights"
For various reasons, coconut water is very niche and may not be available in some third- and fourth-tier cities in China. Except for a small number of loyal fans, it may not be listed on consumers' shopping lists.
When new tea drinks are in full swing, there may be another reason for the downturn of coconut water-the lack of "imagination" of coconut water is not as good as other "coconut-flavored products", and it is not as good as the oat milk OATLY that was launched a few months ago.
The explosion of raw coconut latte this year has made Fino's "thick coconut milk", which has been supplying the B-side, moved from behind the scenes to the front of the stage; not to mention oat milk, it has already partnered with many specialty coffee brands. Coconut water seems to be in a "single-handed" situation. The biggest highlight is the natural and healthy life that has lasted for years.
In markets such as the United States, coconut water is more popular with consumers. Euromonitor statistics show that in 2020, the global coconut water market will be about 2 billion U.S. dollars, of which the U.S. market will be about 658 million U.S. dollars. This category will continue to grow at a relatively rapid rate in the next 5 years, reaching 2.87 billion yuan by 2023.
▲ Picture from: Interface News
But this data is not pretty in the big category. In 2020, the global non-alcoholic beverage market size is about 952 billion U.S. dollars, and is expected to reach 1.36 trillion U.S. dollars in 2025. Coconut water is like a drop in the ocean.
In fact, Pepsi, Danone, Coca-Cola, etc. have all deployed coconut water, and Wahaha has also produced coconut water product "little coco." According to the Wall Street Journal, in October 2020, Coca-Cola ceased production of its coconut water brand Zico. In January of this year, Zico was bought back by founder Mark Rampolla and his company. Mark Rampolla stated that he "respects Coca-Cola's decision and still likes Zico very much, knowing that consumers are the same."
In addition to the main product coconut water, Vita Coco's product matrix also includes coconut milk, coconut oil, soda water, plant energy drink "Runa" and so on. Considering that consumers at home and abroad are concerned about natural and healthy labels, Vita Coco, which is more experienced, may have room for development. Industry insiders believe that Vita Coco's choice of IPO at this time will help expand its entire market, channels and consumption. The co-founder of Vita Coco stated in an open letter:
Most health drink companies are small private companies and do not have enough scale to realize their true potential. And landing on the capital market will provide Vita Coco with the platform needed for further growth. We will create new healthy and functional beverages and acquire brands that conform to our values.
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