Vita Coco at William Blair Conference: Growth and Sustainability Focus

On Wednesday, 04 June 2025, Vita Coco (NASDAQ:COCO) presented at the 45th Annual William Blair Growth Stock Conference, highlighting its robust market position and commitment to sustainability. The company underscored its strong brand presence in the US, UK, and Germany, while also addressing challenges such as tariff impacts and competitive pressures.

Key Takeaways

• Vita Coco maintains a leading position in the coconut water market across the US, UK, and Germany.
• The company is committed to sustainability, boasting a B Corp certification and focusing on responsible sourcing.
• Financial performance shows consistent double-digit growth in net sales and gross profit.
• The company’s diversified supply chain mitigates risks and supports international growth.
• Vita Coco is exploring M&A opportunities to expand its "better for you" beverage portfolio.

Financial Results

• Net Sales: Consistent double-digit growth from 2020 through 2025 guidance.
• Gross Profit: Approximately doubled from 2020 to 2025.
• Adjusted EBITDA: Nearly tripled from 2020 to 2025.
• 2024 Guidance: Net sales expected to grow 5% to 10%, with gross margins between 35% and 37%.
• Pricing Strategy: Over the past four to five years, pricing has increased by approximately 15 points.

Operational Updates

• Supply Chain: Spans 19 factories in nine countries, reducing risks related to weather, politics, and economics.
• Route to Market: 51% through direct store delivery, direct to warehouse, and broad line distribution.
• International Growth: Outpacing US growth, especially in the UK and Germany.
• Tariffs: Operating under a 10% baseline tariff.

Future Outlook

• Growth Strategy: Focus on expanding household penetration, increasing buy rates, and innovating beyond core products.
• Innovation: Introducing new product lines to attract more consumers.
• M&A Focus: Seeking acquisitions of brands with $25 million to $75 million in revenue that align with Vita Coco’s ethos.

Q&A Highlights

• M&A Targets: Companies with revenues between $25 million and $75 million.
• Pricing Power: Confident in pricing strategies due to strong brand recognition.
• Competition: Competing effectively against juices, enhanced waters, and sports drinks.

In conclusion, Vita Coco’s conference call reaffirmed its strategic focus on growth and sustainability. For a deeper dive, readers are encouraged to review the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

John Anderson, Research Analyst, William Blair: Alright, everybody. We’re gonna get started here. Thanks for joining us. I’m John Anderson, the research analyst at William Blair that covers consumer staples and, in this case, Vita Coco. We’re happy to have the team from Vita Coco here with us.

We have chief executive officer Martin Roper, chief sales officer Charles Veness, and chief financial officer Corey Baker. Vita Coco pioneered packaged coconut water in The US, and it’s the clear leader in both The US and international markets such as The UK and Germany. Coconut water, as it turns out, is one of the fastest growing categories in the beverage aisle. As more households are seeking out natural alternatives for hydration occasions, and consumers choose coconut water for those. As the market leader, Vita Coco is driving growth by expanding the range and availability of its water products through the rollout of multipacks, an organic line, juices and cans, and introducing new products such as its treats line, which aims to serve a more indulgent consumption occasion.

That’s my kind of consumption occasion. Despite

Martin Roper, Chief Executive Officer, Vita Coco: all

John Anderson, Research Analyst, William Blair: the company’s success, the company appears to have ample runway for growth given the potential for greater household adoption of coconut water and ongoing use case expansion. Before handing it over to management, quick housekeeping items. Immediately following the presentation, there’ll be a breakout session in the Richardson Room. So please join us for that. That’s the Richardson Room.

And I guess lastly, I need to inform you that a complete list of research disclosures or potential conflicts of interest can be found on the William Blair website. So with that, I’ll toss it to Barton. Thanks.

Martin Roper, Chief Executive Officer, Vita Coco: Thanks, John. Also, following on disclosures, a quick message from our lawyers, which I won’t endeavor to read, but hopefully, you have memorized by the time I move to the next slide. Introductions, I’m Martin Roper, CEO of Vita Coco. Thirty years of beverage experience, twenty four years of Boston Beer and now six at Vita Coco. I’m joined by Charles Vinesse, who’s our Chief Sales Officer, primarily responsible for commercial sales in North America.

Charles has twenty two years of beverage experience, I think ten years at Vita Coco, I’m proud of that, at Heineken. And I’m also joined by Cory Baker, our CFO, who’s been with Vita Coco just over two years, has over eighteen years of beverage experience primarily in a wide range of functions at PepsiCo, and he brings that experience to us. So we’re here to talk to you about Vita Coco. We’d like to think that we’re building the better for you beverage platform of the future around the Vita Coco coconut water brand. We have an authentic core brand that is the number one branded coconut water brand in The U.

S. And in The U. K. And now in Germany and is probably the largest retail sales value coconut water brand in the world. We have a proven track record of innovation around coconut water, including introducing coconut water to The U.

S. Back in around 02/2025 and then introducing flavored coconut waters coconut water with pulp, coconut milk based beverages, coconut milk. There’s a proven track record of innovation around coconut water. We think we’re a very unique business. We’re fast growing.

We’re profitable and have been for quite a while. Cash generative, asset light, very light on investment and with a proven management and a responsible approach to business. We are B Corp certified and we’re a B Corporation driven around a purpose as well as driving shareholder value. We have strong commercial capabilities in North America and Europe, which we’re very proud of with 42% share of the coconut water category in The U. S.

And over 80% share in The UK. And we think we have a very unique route to market, both especially in The U. S. Where we combine DSD with direct to retailer. So we think we’re in a very unique position to build a beverage platform for the future.

We’re trying to do it in a way that does good for the planet and for our communities in which we operate. And we’ll talk about that in a little bit. So we’re not just purely profit focused, but we’re trying to find that right while obviously taking the shareholder return very seriously. The supply chain is how we do take that responsibility of the planet seriously. It’s designed for positive impact at all stages from protecting natural resources.

Our coconut water largely comes from almost all of it comes from the tropics all around the globe with major sourcing from Philippines, Brazil, Thailand, Vietnam, Indonesia and Sri Lanka. And so we take our responsibility to those communities very seriously, both in protecting the coconut farms and replanting those trees that are now many of them were planted just off World War II. So many of them are now getting to be old and senile. So we’re trying to regenerate those trees to basically improve the crops for these farming communities. We’re also heavily investing in the communities through building school classrooms to try and provide education to the next generation of farmers to allow them a way out of the farming lifestyle as well as providing solar power and other sort of resources to those communities while also educating them on how to improve yields in their farms through cross cropping, how to improve the health of their trees, through irrigation and or planting new trees to replace the ones that are now sort of senile.

So heavy investment back into the communities in which we operate. And then as it relates to our consumers, championing health and wellness and healthy lifestyles, which most of our consumers participate in. So we think we have a beverage business that’s strongly aligned with current key consumer trends. We have a very clean label. It’s coconut water.

It comes from the coconut. That’s what it is. So remarkably clean. It’s obviously plant based. Coconut is a fruit.

It’s a fruit juice, but it doesn’t taste like orange juice or cranberry juice. And it has actually better sort of hydration properties, active hydration properties than any of those fruit juices. So functional benefits is an important part. We obviously play in the functional beverage space and that’s a growing part of the beverage category. So that’s also how we think we’re aligned with consumer trends.

We’re heavily focused on positive impact that I’ve touched on, which again rings true with our younger consumers. And we have a very diverse consumer group. We over index with Asian, African American, Hispanic consumers in The U. S. We over index with younger consumers in The U.

S. So we’re still a young brand, and we still have a lot of room to grow as our population ages with us. And we bring people into Coconut Water through that wonderful unique occasion that most of you have experienced, which is Sunday morning at college after a busy party night on Saturday night. Does that sound right to the guys in the background? Yes.

Okay, good. We’ve all been there. People are still finding coconut water. So it’s a nice way to feed our growth. Why do we think we’re a special company and worthy of your attention?

I think we combine a number of things. We have a great culture. I’ll touch upon that. We have a supply chain, which we believe is creates a moat for us in the business and is unique in coconut water and probably in beverage generally, then we’re sitting in a growing category with a very strong brand with retail execution and we’re delivering results. We now have a track record of being a public company.

We went public in 2021, ’4 years in. We’re one of the top performing of our IPO class in the CPG space. We’re very proud of that, but it’s still young and we’d like to be at that point in ten years’ time too. So we’re very focused on performance and output as well as doing what’s right. When I describe the company to people, we’re high energy.

We have a very flat structure. We’re quite small. We’re only about 300 employees. People know the CEO, which has its good and bad attributes to it. So apologies to those who know me.

We have a very diverse global talent base. We have over forty, fifty people in Europe. We have 40 people in Singapore running the supply chain and the rest are sort of North American based. And we have a nice balance of youth and experience. And so this is our leadership team, and there’s a great number of years of experience across a wide range of functions.

How we behave and we describe our culture, we talk about it being human first and treating the individual seriously, so we take people very seriously. We believe nothing is impossible. This present is impossible. We’re united in our will to win because we’re fighters and we’re competitive, but we are part of something bigger. And so that’s how we sort of think ourselves.

And I think it’s a very unique culture, and we’re actually very sticky as witnessed by the tenures there. And that translates into a young employee group phase and drives consumer interaction. And in beverage, that’s what you need. I had a Boston Beer, and now I have great pleasure to have it at Vita Coco. So culturally, I think we’re in a very good place organizationally and experienced management team.

I touched briefly on the supply chain being a critical moat for us. I think what happened to the company was the company launched coconut water sourcing from Brazil and then needed more coconut water and went into Asia looking for coconut water. And what it found was there were these coconut processing facilities that were processing coconut for desiccated coconut, coconut milk, coconut cream. And they were throwing the water away partly because there wasn’t a local market for coconut water because if you lived in those communities and you wanted coconut water, you just picked a coconut off of the street. And so our founders went there and said, we will take this coconut water.

We’ll show you how to package it. We’d like to sell it in America. And we developed relationships with these large coconut processing facilities to take their waste stream, coconut water, and sell it as a consumer goods in The U. S. And that has worked incredibly well both in delivering low cost coconut water into The U.

S, but also in these partnerships that we have with these coconut processing facilities in Asia. And so today, we’re at 19 factories across nine countries, very diversified to deal with weather risk, political risk, economic risk, exchange rate risk, supply chain risk, shipping risk. We do ship all of our product into The U. S. So we’re exposed to tariffs.

We’re currently expecting or currently operating under 10% baseline tariff. If the reciprocal tariffs went into place, we’d be operating on tariffs in the low 20% range. So we are exposed, but obviously, who knows what’s going happen with tariffs, and we’re going to worry about that when we actually know what’s going to happen with tariffs. But we are a major importer. And our major markets, North America, Europe and a little bit in Asia and China.

So diversified supply chain that’s very hard to duplicate, very hard to scale, very hard to ramp up, and that is actually providing a moat to us in our business. And I’ll now pass to Charles Finas, who will talk a little bit about what’s going on

Charles Veness, Chief Sales Officer, Vita Coco: in America. Charles? Hello, everybody. So I’ll just take it through, start with the the product, and we’ll talk a little bit about consumers and then, some commercial activities. For those of you who don’t know it, you know, it all starts with coconut water.

So to re ground everybody a little bit in it, why is coconut water a good product? It’s very simple. It comes from a tree. We take it out of the coconut, put it into packaging. It’s rehydrating, replenishing, nourishing.

It energizes. It has a little bit of, has natural electrolytes, a little bit of natural sugar, and great tasting for most people. And we do know, sustainable sourcing is is a very important part of what we do. Why we think it’s a good product for consumers? It is one of those products that you find in stores very rare for beverages that can actually operate, you know, can work sort of function for you in a lot of different occasions.

Right? So, some people will drink it in a cocktail. Some people will drink it in the afternoon. Like, right now, you might need a little bit of energy. You drink a vitamin Cocoa.

I highly recommend it. You might put it in a smoothie in the morning. You’re have it in your breakfast. And from the chuckles earlier on when Mike was when Martin was presenting, I think a couple of you have maybe gotten to use to know it when you were a little bit hungover. Everybody who’s guiltily looking at their laptop right now probably was one of those.

So it is one of those products that’s very versatile, can be used in different occasions, and, therefore, we can attract a very broad consumer base, which I’ll talk a little bit about. It’s important that not only coconut water has these benefits, but also what we’ve been working on for the last, twenty plus years here in The US and in other markets is educating the consumer on these benefits. So when we talk to our consumers now, we ask them, you know, what does coconut water help you with? Why you drink it? People tell us, I drink it for hydration.

I drink it for health benefits. I drink it because it’s a very I use it because it’s a very versatile product. I can put it in my smoothie. Some people even cook with it. You can put it in your cocktails.

Lately, we’re hearing more and more that it’s, important for skin health. So people will drink it for a lot of different reasons, and we educate them actively on it. We do this through digital campaigns. Most of our marketing efforts are, are digital, and most of our marketing content is based on these occasions. You know, one thing that you’ll probably hear us talk a little bit more in the first slides I that I showed you, we talked about active hydration.

So think about going to the gym, you know, going for a run, going for a long walk, going a long hike. This has, you know, traditionally been actually one of the sort of the the the benefits or the one of the occasions we’ve we’ve communicated quite a bit. But we realized early on when we did that, we were up against some pretty big other brands out there. So we haven’t in the range of different occasions, this has probably been the one, you know, the last couple of years sort of least attention given to, but we really believe there’s a huge opportunity, which is why you’ll see us come out, you know, in the next couple, in the in sort of times ahead, and pretty powerful message saying there’s three and a half times as many electrolytes in a bottle of coconut water as there is in the average or the, I think, what we call it here in the year, the the leading sports drink. Right?

So, the leading source of hydration is electrolytes. That’s, you know, that’s been communicated quite well. So we definitely think there’s an opportunity to tap into an even wider range of occasions and more frequently talking about electrolytes. Talk a little bit more about our consumer. So one of the key benefits and one of the reasons why we believe there’s still a lot of opportunity and growth ahead is we have a younger consumer.

You can see here these indexes. Right? So we over index with Gen z, millennial, and even Gen x consumers, which I will be a part of. We under index with boomers. We have a more diverse consumer base.

So our consumers, we sell more than half of our volume, in The US to nonwhite consumers, over indexed with black consumers, Hispanic consumers, and quite heavily over indexed with Asian American consumers. So there’s a good mix of, you know, different pieces, different groups from, of consumers that we that we bring to the store. We are more concentrated in urban areas. And very importantly, we slightly over index as well with affluent consumer. So if we show this profile to our retailers, very often, they tell us these are exactly the type of consumers and shoppers are trying to attract more to their stores.

What matters to these consumers, natural, organic, they’re concerned about the environment, and they like to do try and do new things. So all of this has led, the coconut water category, in MULO plus with c, which is basically, you know, the sort of the larger part of what we measure in The US. The category is roughly $1,200,000,000, cat in in size, $1,200,000,000 in size. And you can see that coconut water over the last five years has outgrown, the total beverage category consistently. And as total beverage growth has slowed down slightly, you can see that the coconut water category has actually held up and recently accelerated even a little bit more.

Where is this growth coming from? About half the growth is coming from new households buying. So this category has relatively low household penetration, and we think there’s a lot of opportunity to build that out further, which is bringing more people in to buy it at least once a year. So half the growth is coming from new people coming in, and about half the growth is coming in from people spending more. So they’re already buyers, but now they’re spending more on that because we might have sold them a multipack instead of, you know, just a 500 mile bottle.

What’s also important is that our shoppers, and I alluded to it on the first page, we have a quite affluent shopper. And our, average coconut water basket, so the shop the the basket of goods that somebody buys who buys coconut water is significantly higher than the average buyer, which is makes this a very attractive category for retailers because that means they bring these shopper in. They might buy other stuff as well. So the so that was the category. Now if we’re clicking down on The US situation and looking at the brand itself, so Vita Coco, coconut water, and the light blue and then the and the the sort of pinkish color, not sure what color it is from the from the from afar, but is our coconut milk drink.

So you can see consistently this brand has delivered very strong growth over the last couple of years. Last year, we’ve had a bit of a dip. We had some supply challenges. You know, it’s a product like Martin talked about. It comes all the way from the other side of the world.

So whenever there’s international shipping challenges, we’ve been we sometimes get hit with that. But you can see there’s very strong demand for the brand, you know, and year to date, we’re sort of in the high teens. And then, we just recently launched our treats line, which adding a very nice amount of growth, bringing in new consumers, as we speak. So we’ve rolled that out nationally. We also have some success with, some coconut milk products.

And on the blue Vita Coco Coir, we’re continuing to recruit consumers, expanding channels and having continued success with our multipacks. A little bit more about our route to market and how we get to market and where we sell. So on the left, you see our twenty twenty four branded sales by route to market. Route to market means, like, what is the means by which we get from our warehouse the product ultimately lands on the shelf? So on the top part, about 51% you see is direct stores delivery.

So that means that’s a distribution system where we sell to a distributor. That distributor puts it on the truck and brings it to a Walmart, to seven Eleven, you know, a Walgreens. Our largest partner in that sense is Keurig Doctor Pepper. You know, they have a broad beverage portfolio of which we are a part. And like I said, it gets to Walmart, Publix, you name it.

Then we also have a direct to warehouse route to market, which means we take the pallets from our warehouses and drop them directly at the warehouses or the stores depending a little bit, but mostly of the warehouses of our retail partners, Costco, Sam’s Club, Amazon. And then the last part, which is we call broad line distribution, which we have partners like Unifi and Cisco. They have a much broader portfolio. They don’t just do beverage. They sometimes do food.

They even do Cisco will do napkins. And that gets us to places like Whole Foods Sprouts, but also the food service, environment, which encompasses an example. And then on the right hand side, you see our twenty twenty four branded sales by channel. You can see, this is we estimate that Surcana MULLO plus, with convenience tracks about 85% of the branded America’s, case equivalents, 38% going to club, around 36% food, drug, and mass, and then 26% going to to other places as well. So that’s sort of the breakup of the the ultimate channels where we land in.

And then from a distribution perspective, on the bottom, you can see club, food, drug. We have very high ACV, which means we’re in most of those stores. Like, we’re in over we’re 97% roughly of every club store in America. We still have a decent amount of opportunity in the convenience channel. The largest channel in terms of number of doors in America, I think it’s roughly a 50,000, but, so it’s a very, you know, very granular distribution channel.

International. So international growth currently outpacing The US growth, and we still have a lot of opportunity to further capture the upside potential. We international makes about 13% of total net sales, outpaces America’s volume growth. And as you can see here, you know, the way we look at it is if you look at, you know, this the per capita consumption of coconut water, in The US, where we have the number one brand by the way, we also have the number one we are the number one brand in The UK as well as in Germany as well as in France. You can see if The US would be indexed at a hundred, there’s a lot of runway in some of these other countries to just get the whole category up to a higher level.

We’ve we’ve had a head start in The US. We’ve been building the category for a longer time. Outside of us, globally, there’s not really there are not a lot of really brands building it the way we do it. So we’re really you know, we see a lot of opportunity to continue to invest in the category and grow it globally. We have a 53% 53 person strong team, UK, Germany, and the rest of the European markets, and then we’re seeding some of the other markets for for future growth.

With that said, I’ll hand it over to Corey.

Corey Baker, Chief Financial Officer, Vita Coco: Thanks, Charles. So if we take a look at what what all the work that Charles and Martin talked about has delivered, you can see starting with with net sales, we’ve delivered consistent, strong double digit growth from 2020 through 2025 guidance that we’ll go a bit deeper into. And then gross profit as well from 2020 to 2025 is approximately doubling. You can see some impact there through COVID from higher ocean freight that the organization chose to absorb to make the business stronger coming out. And as a result, the adjusted EBITDA has nearly tripled with strong mid to high teens gross margins was what we’re trying to deliver overall.

If we think about more specifically this year and what we’re looking to deliver for the year, net sales of 5.55 to $5.7 8 percent to 10% growth, and that’s built on continued strong category growth that Charles outlined. So the category growing mid teens, the Vita Coco brand growing mid to high teens, so recovering some of the softness coming out of the supply challenges last year. The international business is growing much faster than The U. S. Treats sits outside of coconut water, so Charles touched on the growth we’re seeing year to date.

So we expect continued incremental growth from Treats. And then we’ve had some transition of private label regions in different parts of the world that will partially offset that growth. From a gross margin perspective, 35% to 37%, we are executing some pricing this year and operating on the assumption of baseline 10% tariffs through the year and we’ll manage that within the original guidance we’ve provided coming out of Q1. And then our SG and A growing low to mid single digits. So investments in marketing and people to continue to support our growth and that’s being partially offset by some one time items this year and last year.

So as we thought about the guidance for Q1 and we think about the phasing for the year, it is quite a unique year lapping last year. First, from a top line perspective, Q3 we expect to be very, very strong. We had last year both reduced promotional activity and we had supply challenges, so both of those we expect to be relieved this year within our guidance assumptions. And then from a gross margin, our assumptions as we gave it were to be relatively flat through balance of the year. Quarters are tough for us with the different route to markets and shipping, but we like expect that to be relatively flat.

And similar in SG and A, we’re working to better balance the way we account for our marketing spend and our SG and A, and our expectations were that that would be relatively flat as a percent of net sales for the year. We tend to see a slight uptick in Q4, but we would expect a more consistent flow of SG and A. And so if we think in the longer term and how we expect to develop the overall business, Charles touched a lot on this, expanding households and occasions is our core growth driver, continuing to build those households in The U. S. And internationally and increasing the buy rate of each of those households by educating consumers and driving usage occasions.

And then innovating outside the core, so treats as a good example of what we’re bringing on top of the core coconut water to build upon those households and drive incremental growth. And then the international, Charles again highlighted the opportunity that we’re seeing. We’re seeing incredibly credible growth internationally, both U. K, Germany growing over 100% in a really super exciting market, and just very low per capita, very low household penetration in all of our major markets outside The U. S, which we can continue to grow.

And then M and A, we’ll touch on M and A we view as an opportunity. The core business is by far and away our number one priority. But we do feel we’ve built an organization with a strong structure both in The US throughout Europe with large teams, sophisticated systems where we could bring in brands of the right size with some scale that fit our culture, that are better for you growing and can really help accelerate those brands. And where we can deliver shareholder value at the right price, we would love to bring those into the system. We think over the long term, this will allow us to deliver our algorithm, which is Branded net sales growth of mid teens and adjusted EBITDA margins in the high teens approaching 20.

And that’s built on those four pillars I’ve outlined. With that, I thank you for your time, and I think John will move to breakout session for any questions you might have.

John Anderson, Research Analyst, William Blair: Yeah. We we have a minute or two. Sure. Sure.

Corey Baker, Chief Financial Officer, Vita Coco: Oh, there’s one. So at least probably 25,000,000 of revenue, but not getting so big that it would get into the point where it would better fit in a large, you know, Pepsi or Coke. But something that is proven with consumers that has some scale. Again, the priority is not to distract from the core business. So something with a with that’s been proven with consumers, that’s working.

Most likely better for you beverages, something that fits the profile of the culture, something that’s good for you that fits the B Corp and the public benefit, or something that leverages our coconut supply chain. It could be a coconut water company in another part of the world or something that fits within the model that we have, where we have distinct advantages and can drive value. We feel very good about the strength of the brand and the ability to to take pricing. The brand historically is not taking a lot of pricing. Over the last four or five years have been about 15 points of pricing, which compared to other beverages is quite low.

So we’re comfortable. There’s a lot of volatility in the market, but we’re comfortable that the brand is strong enough to support pricing. So the the way we think about it broadly is the core coconut water in The US has been growing double digits. So this thing 10% growth coming out of the core US coconut water, international growing much faster than The US, and then innovation around that growing, adding the additional points to get you into that mid teens.

Charles Veness, Chief Sales Officer, Vita Coco: I can, it’s a mix of different categories we source from. We’ll interact with juices. We interact with, enhanced waters. We’ll interact with sports drinks. And I think it comes down to, like, this slide we showed with all the different occasions and how consumers are increasingly understanding this is a very versatile product.

So it’s coming from it’s coming from different places, which is, I think, sort of like the strength and the uniqueness of this specific product. You know, like, I I think it’s one of the reasons why we can outgrow total beverage because we could take a little bit from juice, and we could take a little bit from enhanced waters and a little bit from from sports drinks and, you know, by emphasizing these different occasions. And that it also depends a little bit in, you know, different stores were placed in different places. You know, sometimes we’re next to this product, and sometimes we’re next to that product. That often helps as well, of course.

John Anderson, Research Analyst, William Blair: Okay. We’re out of time.

Corey Baker, Chief Financial Officer, Vita Coco: Thank you. No problem.

John Anderson, Research Analyst, William Blair: Thank you. Join us on the Richardson Room.

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