Vita Coco Says Coconut Water Demand, Walmart Gains Are Fueling Raised Outlook

Key Points

• Vita Coco raised its full-year outlook after reporting 37% first-quarter top-line growth, citing strong coconut water demand and rising consumer interest in functional hydration. The company now expects coconut water category scans to grow about 20% this year.
• Walmart is becoming a major growth engine as improved shelf placement in the juice aisle boosts visibility and scan growth. Management said the expanded set is still in less than half of Walmart stores, leaving room for further gains.
• International expansion, convenience stores and product innovation remain additional growth drivers, with Vita Coco also seeing traction from its Treats line and private-label business. The company said it is prioritizing growth and is patient about M&A despite having no debt and significant cash.

Vita Coco NASDAQ: COCO executives said the company is benefiting from accelerating demand for coconut water, broader distribution gains and increasing consumer interest in functional hydration, following a first quarter in which the company reported 37% top-line growth and raised its full-year outlook.

Speaking at an investor event, Co-founder and Executive Chairman Mike Kirban said the coconut water category continues to stand out in a sluggish broader beverage market. He said Vita Coco’s year-to-date scans were up almost 30%, with coconut water among the few beverage categories showing meaningful growth alongside protein and energy drinks.

“Consumers are, I think, whether higher income or not, they're digging deeper than ever before for functionality, for wellness, for things that actually make a difference as opposed to just general refreshment,” Kirban said.

Category Growth and Hydration Positioning

Kirban said coconut water has historically sourced volume from conventional juice, premium enhanced water and sports drinks, which he described as a combined $125 billion global opportunity. More recently, he said the company has seen an acceleration in demand coming from sports drinks as consumers focus more on everyday hydration.

Kirban highlighted Vita Coco’s messaging that coconut water has “three and a half times the electrolytes of the leading sport drink” and “comes from a tree,” positioning the product around simple ingredients and hydration benefits. He said the company is using that message in point-of-sale materials, displays, digital marketing and social media, while also pursuing programs with youth sports and smaller leagues.

The company now expects the coconut water category to grow roughly 20% from a scan perspective this year, Kirban said. Vita Coco raised full-year growth guidance to 18% to 21%, including mid- to high-teens growth for Vita Coco Coconut Water, up from a prior low-teens expectation.

Walmart, Convenience Stores and Distribution

Kirban said a key growth driver has been improved placement at Walmart. He said Vita Coco had previously been located in an unusual part of the store, sometimes near cooking products, before being moved into the shelf-stable juice aisle. While the move initially reduced some SKU availability, Kirban said the company later secured a larger “billboard” presence in the juice aisle through November resets.

He said the new Walmart placement is adding roughly 5% to scan growth and helping consumers discover the product in a higher-traffic section of the store. Chief Financial Officer Corey Baker said less than half of Walmart stores currently have the expanded set, adding that some stores carry around 20 Vita Coco SKUs while the average is still below 10.

“You could still double at Walmart,” Baker said.

Kirban also said convenience stores remain a significant opportunity. Vita Coco’s convenience-store ACV has increased from the mid-50s to the mid-60s over the past year or two, and Kirban said the company believes it can reach the mid-80s over time. He said the Tetra Pak format, rather than cans or PET bottles, has been the main driver of growth in the channel.

Innovation, Treats and Private Label

Kirban said Vita Coco continues to innovate but remains focused on building the core coconut water category. He compared the strategy to Red Bull’s early years, when the energy drink company built a category with a limited number of SKUs. Vita Coco’s core “blue” coconut water product remains the primary growth driver, he said, while flavors and pack formats help bring new consumers into the category.

The company’s Treats line, which uses coconut milk as a base for more indulgent refreshment beverages, is adding roughly 3% to scan growth on top of coconut water growth, Kirban said. Vita Coco launched Treats nationally last year and added two new flavors this year, including Frosted Lemonade on a national basis and another retailer-exclusive flavor. Kirban said Treats is bringing in a younger and more rural consumer.

On private label, Kirban said the business can be “somewhat lumpy” because retailers regularly bid out private-label supply, especially during periods of supply chain disruption. He said Vita Coco’s geographically diverse coconut water supply chain is its biggest competitive advantage, helping the company win business back even when competitors occasionally offer lower pricing.

Baker said private-label margins are lower than branded margins, but the business works within Vita Coco’s model because it is supply-chain led and ships directly to retailers. Kirban said Vita Coco prefers large private-label customers and noted that a large U.S. retailer announced last year is expected to begin private-label volume in the second quarter.

Margins, International Growth and M&A

Baker said Vita Coco reported a 40% gross margin in the first quarter and expects the second quarter to be similar, while maintaining full-year gross margin guidance of 38%. He said pricing taken for tariffs is supporting margins, even though the tariffs have gone away, but the company expects inflation in the second half from packaging, factory energy, domestic logistics and fuel-related distribution expenses.

Kirban said the company likes operating near a 40% gross margin level, though international growth and private-label mix can affect reported margins. He said the company’s current focus is growth and that EBITDA could become a larger percentage of net sales over time as the business scales.

Internationally, Kirban said the business remains in “super early days.” He noted that U.K. consumption per capita is still about one-third of the U.S. level, while Germany, described as Vita Coco’s second-fastest-growing market, is at about 10% of U.S. consumption per capita. He said the company is looking to deepen distribution in existing markets while exploring opportunities in Latin America, Asia and other parts of Europe.

Kirban also said Vita Coco is evaluating mergers and acquisitions but is being patient. He said the company has no debt and “$200 something million” in cash, making M&A an obvious area to consider, but added that the company is not looking for anything transformational. Potential targets would likely be close to Vita Coco’s current business, such as shelf-stable health-and-wellness or functional beverages where the company could add value through sales or supply-chain synergies.

About Vita Coco NASDAQ: COCO

Vita Coco, Inc NASDAQ: COCO is a global beverage company specializing in coconut-based products. Founded in 2004 by Michael Kirban and Ira Liran, the company pioneered the introduction of refrigerated coconut water to U.S. consumers. Headquartered in New York City, Vita Coco sources coconuts from growers in tropical regions such as the Philippines, Indonesia and Brazil, partnering with local farmers to promote sustainable agriculture and community development.

The company's flagship offering, Vita Coco Original Coconut Water, is available in multiple pack sizes and a variety of flavors.

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