Vita Coco Water and the Success of Brazilian Coconuts
Vita Coco, managed by the parent company All Market Inc., is one of the world’s leading coconut water and coconut products brand. Created in 2004 and based in New York, Vita Coco’s products go from their now iconic coconut water to coconut and coconut oil. What started as a daring attempt to introduce a tropical drink with coconuts sourced from Brazil into the United States market has now become a major and profitable sector of the beverage market in western countries. Even though other brands are also present in this sector of consumer goods, Vita Coco remains its leading brand with an estimated 25% of the market share. Today, Vita Coco products can be found in retail stores all over the world, particularly in North America, Europe, and East Asia.
Over a decade since its creation, Vita Coco’s investors and stakeholders include Hollywood celebrities, Red Bull, and beer breweries. Nevertheless, Vita Coco’s success has caught the eye of a giant within the soft drinks and beverages category, PepsiCo Inc. Recently, talks began between Vita Coco and PepsiCo over a potential acquisition later this year by the industry giant seeking to diversify its beverages portfolio. Even though nothing is yet official, the acquisition of Vita Coco could go for as much as US$1 billion. This article explores the status of the economy and coconut production in Brazil.
Vita Coco Water and the Success of Brazilian Coconuts
Currently, Brazil has a total population of almost 206 million citizens, more than 85% of which live in an urban setting, notably the cities of Sao Paulo, Rio de Janeiro, and Brasilia (capital). Furthermore, Brazil’s annual gross domestic product (GDP) is approximately US$3 trillion, making it one of the twenty largest economies in the world and a member of the G20. However, its national economy has experienced sluggish and even negative economic growth in recent years. The national economy is divided into 6% agriculture, 22% manufacturing, and 72% services. Similarly, the Brazilian agricultural industry employs 16% of the national labor force, while manufacturing employs 13% and services employ another 71%. Meanwhile, the agriculture industry utilizes some 33% of the national territory, while another 62% is forested, mainly in the Amazon. In terms of trade, Brazil’s main partners are China, the United States, Argentina, and the European Union.
In terms of natural resources, Brazil has bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, hydropower, and timber. Within manufacturing, the national industry is focused on textiles, shoes, chemicals, cement, lumber, iron ore, steel, aircraft, motor vehicles, and machinery. Meanwhile, the country’s agricultural industry has as main products coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus, and beef. Brazil is not only one of the world’s largest countries and economies, but also a leading coconut producer. During 2013, the country’s coconut output was of almost 2.9 million metric tons, followed by more than 2.9 million metric tons of coconuts produced in 2014. Therefore, in spite of economic hardships, Brazil remains a central market for the production, consumption, and trade of coconuts and coconut water.