Coconut Water Makes a Surprising Comeback Bid

Coconut water is making a comeback, according to the founders of Zico and Vita Coco. The beverage enjoyed a massive surge in popularity a decade ago, but sales have since declined. Now, the brands are fighting back through new strategies and renewed interest from their original creators.

From roadside stands to retail giants

Zico founder Mark Rampolla returned to the beverage business early this year. He bought his brand back from Coca-Cola, which had acquired Zico in 2013. The company now operates under the name Zico Rising and is working to re-enter retail chains like Walmart. The brand even announced its return on social media with a simple message: “We’re baaaack! With nuttin’ but love.”

The U.S. market for coconut water peaked in 2016, but sales have since fallen by 16%, with the decline accelerating each year. While fresh coconut water remains high in electrolytes and minerals, consumer skepticism about processed varieties has grown. Coca-Cola discontinued the Zico brand last year, and Pepsi Co. also dropped the ONE coconut water brand.

Despite the market headwinds, Vita Coco is positioning itself for an even bigger splash. The company, which holds a 46% share of the coconut water market, has applied to list on the Nasdaq under the symbol COCO. The upcoming initial public offering is expected to raise $224 million and value the company at up to $1.1 billion.

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Zico and Vita Coco both trace their origins to the early 2000s boom in coconut water demand, which grew from near zero to about $600 million in 2013. The founders have remained loyal to the product, driven by personal experiences that convinced them of its value.

Founders see value in the liquid

Rampolla discovered the hydrating properties of coconut water while serving as a Peace Corps volunteer in Central America. He found it more effective than sports drinks for recovery after workouts or hangovers. Vita Coco co-founders Michael Kirban and Ira Liran had a different path to the product. The pair met two Brazilian women in a Manhattan bar who raved about coconut water, inspiring them to create their own brand. Liran eventually married one of the women.

The beverage industry moves fast, but the founders of Zico and Vita Coco believe coconut water still has a place on store shelves. They are banking on the product’s nutritional benefits and dedicated following to help it recover from its recent slump.