Coconut water maker Vita Coco debuted on the Nasdaq last Thursday under the ticker symbol COCO. Shares began trading at an IPO price of $15 per share, a few dollars below its target range of $18-21. While shares briefly rose above $16, they had fallen to just under $14 by Friday’s close.
Vita Coco’s history goes back to 2004 when its two founders were told by a couple of Brazilian expats how much they missed the “agua de coco” of their homeland. The company was able to get ahead of the coconut water trend and win the support of celebrity investors like Madonna, Matthew McConaughey, and Demi Moore.
Unfortunately for Vita Coco, consumer enthusiasm for coconut water has waned in recent years after sales peaked in 2016. An influx of competitors like Zico hasn’t helped business either.
why it matters
Analysts speculate that Vita Coco's IPO price was lowered due to a 16% decline in US coconut water sales last year. However, Vita Coco claims to have a 46% share of the US coconut water market, so if the trend reemerges they are poised for success.