Vita Coco cracks open a lukewarm IPO on the Nasdaq

Coconut water maker Vita Coco made its public debut on the Nasdaq Thursday.

The New York-based company began trading under the ticker COCO at just over $15 a share, after being priced several dollars below its target range of $18-$21. The pricing valued the company at about $833 million.

Shares briefly spiked to over $16, and are hovering around $15 as of midday Thursday.

As the story goes, Vita Coco was born in 2004, after its two founders learned from a couple of Brazilians that what they missed most about their home country was the delicious “agua de coco.” As such, Vita Coco beat the rush of coconut water hype that arrived in the late aughts, kicking off what the company refers to as the “coconut water wars.” The number of tropical beverage makers quickly multiplied, with competitors like Zico and Harmless Harvest cropping up left and right. As one of the top-selling brands, Vita Coco earned high-profile celebrity investors including Madonna, Matthew McConaughey, and Demi Moore, all looking to tap into the coolness of the drink.

But unfortunately for Vita Coco, after coconut water sales peaked to a record high in 2016, the craze has steadily waned. Other “healthy” and “natural” beverages began to flood the market, and sparkling water brands like La Croix seemed to supplant coconut water in the cultural zeitgeist. U.S. coconut water sales fell 16% by 2020, with the decline accelerating each year, according to data from research firm Euromonitor as cited by Bloomberg. In October 2020, Vita Coco’s competitor Zico was discontinued by its owner Coca-Cola, which ultimately sold the “underperforming” brand back to its founder a few months later.

Although it’s not like coconut water is dead: In fact, it enjoyed a revival during the COVID-19 pandemic as consumers stocked up on bottled, better-for-you beverages. In the 12 months ending June 30, 2021, Vita Coco’s net sales swelled 17% year-over-year. And cofounder and CEO Mike Kirban is optimistic, telling Fast Company that the culling of the field was actually good news: “We have a 46% market share in the U.S. coconut water market, which is bigger than the next 10 brands combined.”

Following the IPO, he only expects revenue to increase, given the trends he’s seeing. “Consumers are becoming more and more focused on the ingredients they put in their bodies,” he says. “The $13 billion natural segment [within the U.S. beverage market] is growing at twice the pace of conventional brands, and Vita Coco is one of the original brands in the natural category.”