Vita Coco

Make the natural switch, hydrate naturally

Monday 6 June 2016, by Arnau, Artur Riba, Hilda Ruuskanen, Jordi P

6 inspired

A. The main facts about the activities of the company.

Vita Coco was founded by two entrepreneurs who met a couple of Brazilian women on an extended stay in New York. Of Brazil they missed “agua de coco” the most. This escalated to a trip to Brazil by the entrepreneurs, where they enjoyed authentic coconut water. Knowing that it was rarely available in New York, they had the vision of creating a company that imported and marketed natural coconut water.

They found diverse producers of coconut water in countries like Brazil, where fresh coconut water is packaged in tetrapaks and shipped to the distribution chain. Vita Coco packages natural coconut water and sells it in one of the many countries they operate.

B. The Ethical challenges this company is addressing.

Production of coconut is centered in tropical climate regions. To reach required production they have to harvest coconut in countries such as Brazil or Sri Lanka. Planting coconuts bears the risk of destroying biodiversity; many examples of cutting down the rainforest have been seen. Then the issue of exploitation of labour for harvesting coconuts, and management of byproducts. To address all these problems, Vita Coco ensures that all the suppliers and partners they engage with are respectful and take care of their employees and the land, not only by auditing and checking factories but also committing themselves in person. Finally, Vita Coco also has to address the problem of the packaging, which is what usually hurts the environment the most. Their containers are made of carton coming from responsible sourcing and are fully biodegradable.

Excessive consumption of coconut juice does not seem to have harmful effects compared to sodas and soft drinks, which are artificially overloaded with sugar. Moreover, the health effects for some markets (children for instance) are positive rather than negative.

Traditionally coconut water was considered as waste because of the inability to extend its shelf life, and coconuts were mostly harvested for their meat. This may reduce the ecological impact, not needing to extend plantations. Despite this additional use of coconut, it may had a reduced social impact as farmers may not receive the additional benefits as FairTrade is not very extensive, but companies like Vita Coco are doing great effort to compensate that.

C. What makes you believe this company is really ethical and why you trust it?

At the beginning we want to emphasize that at the moment we don’t see Vita Coco as a 100% ethical company. But we believe that a company that has some weak points in ethics also has a very good ground to improve its responsibility. And we truly believe that the way Vita Coco is heading to can only be upwards.

We like this company not because it is an ethical enterprise, but also the spirit towards the new world it has. Founded by young entrepreneurs and carrying this spirit of new business, as a son of their love for exotic. A step in the old world but walking towards the new paradigm and ready to shift.

One fact which made the company inspiring to us was their interest towards the education in the countries where their coconuts are produced. We believe that education is the main key for developing countries to reach the better standard of living. We know that coconut producers might not get the biggest slice from the profits of the final product but on the other hand we think that if the company acts actively with projects like this it will be better for these countries in the long run.

The company does not only help the kids to go to school but also the entrepreneurs with financial support to make is possible to start a business. Once again this is a huge advantage for these countries. The impacts might not be seen right now but we think that when the time goes by these communities won’t be depended of the coconut plants anymore - the new kind of business will reach these countries and the living standards will increase.

D.The possible challenges facing the company in the future and how you think this company may improve.

There is a statement on the web that they currently do not use GMO (genetically modified organism) coconut and they are on their way to certify this situation. By not using them, they steer away of the controversial transgenics. Their benefits are many for production but it is a delicate topic as GMO’s are not natural, and there may be involvement of other companies whose interests are not very ethical (extreme case of grain GMO seeds of Monsanto) further enhancing their activities.

The big challenge that the company is facing is the increasing demand of coconut water in the last decade and according to the experts, that increase will be bigger. To increase the supply, they need to plant more coconuts, but this increase in the lands dedicated to plant coconut trees can be problematic if to win cultivable hectares they have to destroying the forest or put pressure in the land of other cultivable fruits. Also the use of transgenics don’t seems to be for the moment an ethic decision due to unknown effects on the human health.

To solve this problem, Vita Coco has launched this year the program of bees, a natural way to increase coconut production. The idea is to give bees to the local farmers to get more pollination and more pollination means more coconuts. With that program the farmers will get extra revenues from the sell of honey, and also Vita Coco try to solve the global warming of the disappearance of the bees.

The increasing demand can lead the appearance of new companies producing coconut water from concentrates or other ways. Vita Coco has to take advantage of being one of the first companies producing coconut water and get loyalty from their consumers.

Finally the only point in which the company can improve is in the manufacture of the product cause he can not improve the production that is made in a natural way. Packing in tetra brik looks like ecological today, but in the future they could think in reusable packages or other products more ecological than tetra brik, but always keeping the properties of coconut water to the consumers.

Bibliography

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/12142910/Cracking-the-coconut-how-Vita-Coco-made-London-its-top-global-market.html
http://www.refinery29.com/coconut-water

Location: New York (USA)

Sector: Accommodation and food service activities

Official website: http://vitacoco.com

Key figures:

More than 400 employees in America, Europe and Asia.
Produced with natural coconuts from Brazil and Middle Asia it’s delivered to more than 30 countries.
Sales for a value of 420m. Biggest coconut company in the world.
Lots of social projects to develop poor farming countries

Nbr. visits: 332

Nbr. inspires: 6