IPO news: Here are a few things to note when The Vita Coco Company makes its market debut this week

In today’s environment, health and nutrition have become topics of prime focus. People’s preferences have changed and they are opting for more natural and organic food products and beverages. There is a growing demand for plant-based and other similar healthy options. One such company that offers healthy beverages is The Vita Coco Company, which is set to go public this week.

IPO details

The Vita Coco Company is slated to go public on Thursday, October 21. The company will begin trading on NASDAQ under the ticker symbol COCO. It will offer 11.5 million shares at a price range of $18 to $21 to raise $224.3 million. The IPO will be managed by a group of underwriters led by Goldman Sachs.

Company intro

The Vita Coco Company is a plant-based beverage company that aims to provide healthy, more functional beverage options that appeal to the next generation of customers. The company’s portfolio is led by its coconut water brand, Vita Coco, which holds a 46% market share in the US, according to data from IRI Custom Research. According to Euromonitor, the brand competes in the $2 billion global coconut and plant waters category and is sold in 24 countries across the world.

Over the past three years, the company has expanded its portfolio to include three more brands – Runa, Ever & Ever and PWR LIFT. Runa, a plant-based energy drink; Ever & Ever, a purified water brand; and PWR LIFT, a protein-infused water, are all expected to help expand the company’s reach and customer base.   

The company’s products are distributed through club, food, drug, mass, convenience, e-commerce, and foodservice channels across North America, Europe and Asia.

Financials

In 2020, net sales increased 9% year-over-year to $311 million. Net income rose to $33 million from $9 million in 2019. During the first six months of 2021, net sales rose 15% to $177 million and net income increased 43% to $9 million compared to the same period in 2020.

For the three months ended September 30, 2021, the company expects to report net sales of $112-116 million. Income from operations is expected to be $15-18 million for the quarter.  

Market opportunity

The company operates in the non-alcoholic beverages industry, which consists of bottled water, juice, energy drinks, sports drinks, carbonated soft drinks and ready-to-drink coffee and tea. According to Euromonitor, global non-alcoholic beverages on-and-off combined retail sales exceeded $952 billion in 2020 and are expected to reach $1.36 trillion by 2025, representing a CAGR of 7%.

Based on data from SPINS, the natural beverages category generates $13 billion in US retail sales and is growing twice as fast as conventional beverages. The company believes its current market share is less than 2% of total US natural beverages retail sales thereby presenting it with significant opportunity for growth in the future.

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