A growing consumer awareness of the importance of “natural hydration” helped drive an increase in topline revenues at the company behind the Vita Coco coconut water brand last year, its managing director has said.
Net sales revenue at All Market Europe – the UK limited company responsible for sales and distribution of Vita Coco in the UK and certain European markets – grew by 18.8% to £36.1m in the year ended 31 December 2023, newly filed accounts at Companies House showed.
The main driver of revenue growth remained sales of Vita Coco’s flagship namesake coconut water, managing director Tim Rees said.
Citing Circana data, Rees said sales of Vita Coco in the UK were up by 23% in 2023, ahead of the wider coconut water category, which grew by 14%.
This was a trend that had continued into 2024, Rees said, with Vita Coco sales up 24.5% in the last 12 weeks.
Vita Coco was seeing “an increase in household penetration” as well as “an increase in purchase per consumer”, Rees said.
“A large part of that is that stepping stone [effect] with coconut water, hydration becoming a lot more mainstream, and consumers understanding hydration and the importance of it,” he said.
Coconut water was also being aided by price inflation in other competing categories such as juice and smoothies, Rees said. This was helping Vita Coco’s products appear more competitive, he claimed.
“We know there’s huge price inflation elsewhere in juice,” he said. “Previously Vita Coco was a bit of an outlier on price whereas now you’re seeing products priced at a similar level or ahead of it. So our price is certainly a lot more competitive than it was in 2019.”
Vita Coco products had seen “very low single digit” price increases in 2023, thanks in part to changes to retail mechanics such as meal deals, Rees said.
“Beverages that are in the meal deal are getting a higher proportion of that rsp allocated to them,” he said. “Our 500ml SKU saw an increase of about 5% as a result.”
Gross profits grew by 99% to £13.4m, while operating profits swung from a loss of £1.2m in 2022 to a profit of £3.9m in 2023.
The main driver of this was the “normalisation of freight costs”, which hit All Market Europe and its publicly-listed parent company The Vita Coco Company hard in the wake of the pandemic, Rees said.
“Container rates that were traditionally $1,500 from Asia to Europe were going up to $15,000 in that period of 2022,” Rees said. “These have normalised but they’re certainly not back to historic levels. They’ve been at $8,000 for a lot of this year because of the Red Sea.
“We are a business that has 95% of our finished goods shipped in from Asia, so that’s a cost we’ve had to deal with. We want to drive growth of the business despite that headwind, and I think we’ve done a pretty good job.”
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