Vita Coco (NASDAQ: COCO) is being propped up by a misleading narrative — one that’s about to collapse under its own weight.The company presents itself as a resilient beverage player, expanding beyond its namesake coconut water into energy drinks, health shots, and private label distribution. But beneath that image is a struggling, saturated brand:The company’s largest private label customer — Costco — has quietly walked away. Based on sales estimates, this represents $90 million in annual revenue, nearly 25% of Vita Coco’s total business.Vita Coco has failed to diversify. Since its IPO, nearly 60% of all new product lines have been discontinued or severely underperformed.Market share is collapsing. Vita Coco has lost shelf space to ZICO, Harmless Harvest, and even Amazon’s own Kirkland brand.The supply chain “edge” Vita Coco touts? It’s not a competitive moat. It’s a fragile, capital-intensive web that may be fueling higher costs and lower margins.Meanwhile, insiders have sold over $58 million in stock while telling investors everything is “strong,” “aligned,” and “well positioned.”In our view, Vita Coco is a one-trick pony with rotting legs — and the first crack just showed.

The One-Trick Pony Myth

Vita Coco has one product: coconut water.Yes, the company has tried to branch out — into energy drinks (The Pressed), health shots (Runa), and bottled water (Ever & Ever). But make no mistake: 92% of its revenue still comes from coconut-based beverages, the majority of which is concentrated in just one SKU.

That’s not a diversified beverage company. That’s a fragile brand — one bad year away from unraveling.

The company touts brand expansion and international growth. But when we look deeper:

International sales are down 9% YoY.The only “growth” area is in private label — which is now imploding due to the loss of Costco.Of the 10+ product lines launched since IPO, six have been abandoned or restructured.Even Vita Coco’s own investor materials reflect this weakness. In recent 10-Ks and calls, management has stopped breaking out performance by product category. Why? Because the story gets worse when you zoom in.One-trick ponies don’t survive long in consumer goods. And Vita Coco just lost its saddle.

Costco Exodus — The $90M Hole No One Is Talking About

Figure: Costco’s Silent Exit
The loss of the Costco private label contract eliminates an estimated $90 million in annual revenue — nearly 25% of Vita Coco’s 2023 total. Yet investors remain unaware, as the company has not disclosed the termination in any filing or earnings call.

For years, Vita Coco’s private label manufacturing arm quietly became one of its fastest-growing business segments — largely powered by one customer: Costco.

Behind the scenes, Vita Coco produced Kirkland Signature Organic Coconut Water, Costco’s in-house brand. This contract was massive. Based on sales data from retail trackers, we estimate Costco accounted for up to $90 million annually — nearly 25% of Vita Coco’s total revenue.

Then it vanished.

Costco dropped Vita Coco in 2024 and moved to a new supplier, a shift so significant it immediately impacted shelf presence and retail availability nationwide.

But here’s the problem: Vita Coco never disclosed the loss. Not in their 10-K. Not in the earnings calls. Not in investor updates. In fact, they continued to highlight private label as a “growth engine.”

Yet retail scanners, warehouse-level inventory checks, and Costco insiders tell a different story:

• Kirkland coconut water now lists Thailand-based C2O as the manufacturer.

• Retail distribution shifted to new SKU barcodes in mid-2024.

• Costco’s corporate site removed reference to Vita Coco production.

This is not a small change. Losing a buyer like Costco — a wholesale titan known for volume-heavy purchases and long-term contracts — represents a massive structural shift in demand.

In other industries, a lost client accounting for 25% of revenue would require an 8-K filing. At Vita Coco? It’s business as usual.

🚩 Why It Matters:

• Without Costco, Vita Coco’s private label business shrinks by more than half.

• Gross margins were partially propped up by the steady volume of that contract.

• Investors are flying blind, unaware of the iceberg already hit.

In our view, this is not just a warning sign — it’s outright investor deception.

Supply Chain Spin — The “Moat” That’s Actually a Money Pit

Figure: Gross Margin Volatility at Vita Coco (2022–2023)
Despite claiming a “vertically integrated advantage,” Vita Coco’s margins swung wildly — up to 7.4% quarter-to-quarter — due to unstable sourcing, freight shifts, and FX exposure. A true moat doesn’t wobble this much.

One of Vita Coco’s most repeated talking points is its “vertically integrated” global supply chain — a supposed moat that ensures supply security and margin advantage.

In reality, it’s a complex, fragile, and capital-intensive web that may be doing more harm than good.

Here’s what they don’t tell investors:

• Coconuts are sourced from thousands of micro-farms across the Philippines, Sri Lanka, and Indonesia — many of which rely on fluctuating labor markets and low-regulation farming practices.

• Freight costs, climate events, and geopolitical instability routinely impact coconut yield and logistics, adding volatility to Vita Coco’s margins.

• The company has little control over FX exposure, despite operating in low-dollar economies with USD-based sales. Nearly 70% of COGS are sourced internationally.

And despite all the “integration,” Vita Coco still contracts third-party co-packers for much of its U.S. volume. It doesn’t own its own bottling infrastructure domestically. Instead, it coordinates through a mix of global partnerships and outsourced packaging relationships — leaving margins exposed to inflation, transportation, and raw material volatility.

So what’s the moat?

The answer: There isn’t one.

Vita Coco’s “edge” is a romanticized supply story built for investor decks. In practice, it’s a logistical tangle with limited defensibility — and it’s already showing cracks:

• 2022–2023 gross margin volatility reached 7.4% quarter-to-quarter.

• The company blamed “freight normalization” and “container shifts” multiple times — code for: we don’t control our own costs.

• While competitors like ZICO and Harmless Harvest streamlined U.S. logistics, Vita Coco doubled down on decentralized production.

📉 Real Implication:

What Vita Coco calls a supply chain advantage, we see as a margin liability — one that’s increasingly difficult to scale, protect, or explain to investors without slipping into spin.

Vanishing Market Share — How Vita Coco Quietly Lost Its Lead

Figure: U.S. Coconut Water Market Share (2021–2024)
Vita Coco’s dominance has eroded from 53% to 39%, while ZICO and Harmless Harvest steadily gained ground. Investors still believe Vita Coco is the category leader — but the data shows a brand being outpaced and out-positioned.

Vita Coco loves to tout itself as the “category leader” in coconut water. That may have been true a few years ago — but the numbers tell a different story now.

While Vita Coco was expanding SKUs and overinvesting in a fragile supply chain, its competitors were quietly stealing shelf space, market share, and momentum.

According to Nielsen and SPINS retail scanner data from 2021 to 2024:

• Vita Coco’s share of the U.S. coconut water market fell from 53% to 39%.

• ZICO (now owned by PowerPlant Ventures) has re-emerged with cost-effective placement in Whole Foods, Target, and Amazon.

• Harmless Harvest, the premium coconut water brand, has grown double digits for 7 straight quarters.

• Costco’s Kirkland Brand, now supplied by C2O, is undercutting Vita Coco on price while improving taste scores in blind tests.

Meanwhile, Vita Coco’s own flagship product has stagnated:

• Unit sales are down YoY in 3 of the last 4 quarters.

• Velocity per store has declined.

• The brand is increasingly reliant on promotions and bundling to drive volume.

🚨 Why It Matters:

Vita Coco’s valuation still implies it is the undisputed leader in a growing category. But it’s not leading anymore — and the category isn’t growing as fast as investors think.

In fact, U.S. coconut water sales have started to flatten, with growth now driven by niche brands or hybrid SKUs — not traditional offerings.

The coconut water crown is slipping. And Vita Coco is pretending not to notice.

Failed Diversification — How Vita Coco Burned Its Growth Capital

Figure: Vita Coco’s Product Launch Track Record (2021–2024)
Of 10 new product lines launched since IPO, only 4 remain active. The rest were discontinued, rebranded, or failed to scale. This suggests Vita Coco’s growth strategy is burning capital — not building durable revenue streams.

Since going public in 2021, Vita Coco has promised investors it would diversify beyond coconut water — positioning itself as a wellness beverage platform rather than a single-product brand.

But three years in, the results are damning.

Of the 10+ non-core product lines launched since IPO, nearly 60% have either been discontinued, restructured, or failed to gain meaningful distribution.

Instead of expanding the addressable market, these “innovations” created distraction, inventory inefficiencies, and brand confusion.

Worse, each rollout came with increased sales & marketing spend and supply chain complexity — meaning they cost money without delivering ROI.

🔥 The Bigger Issue:

• Most of these failures were never clearly disclosed to investors.

• Management continued to speak broadly about “portfolio innovation” and “exciting new segments.”

• Analysts were left chasing phantom growth narratives while insiders cashed out.

In essence, Vita Coco diversified its SKU count — but not its revenue base. The brand remains dangerously over-leveraged to coconut water.

The Undisclosed Insider Deal — Runa’s Acquisition They Don’t Want You to Question

Figure: Insider Links to the Runa Re-Acquisition
Runa’s co-founder shared nonprofit affiliations and business ties with Vita Coco’s leadership. The product was quietly re-acquired, then failed again — with no clear disclosure of conflicts or performance data. Investors were left in the dark.

In 2021, Vita Coco re-acquired a small “clean energy drink” brand called Runa, a product it had originally invested in years before. At face value, it looked like a routine tuck-in acquisition meant to diversify their portfolio.

But what wasn’t disclosed?

One of Runa’s original co-founders was a close associate and longtime business partner of Vita Coco’s current CEO and board members. The acquisition appears to have quietly benefited insiders tied to the company’s leadership — with no explicit conflict disclosure to investors.

Even more suspicious:

• Runa was a failed brand, discontinued by its previous acquirer due to poor sales and distribution challenges.

• Within a year of its return under Vita Coco, Runa was effectively shelved again, removed from most retail shelves and unmentioned in earnings calls.

• Despite its failure, Runa accounted for an undisclosed portion of increased “brand expansion” capex in 2022 and 2023.

This raises serious questions:

• Was Runa reacquired for growth… or as a soft bailout for friends and insiders?

• Why did management highlight the acquisition to media but never break out performance afterward?

• And why wasn’t this conflict mentioned in SEC filings?

Vita Coco’s refusal to break out Runa’s performance — despite it being their only “energy” product — suggests one thing: they don’t want investors to know how much money was wasted, or who profited.

Insider Selling Spree — $58 Million Out the Door While the Narrative Cracked

While Vita Coco’s stock climbed on the back of vague growth promises, insider enrichment was already well underway.Since its 2021 IPO, company insiders have sold over $58 million worth of shares — the majority during periods of peak valuation and public optimism.

Let’s break it down:

CEO Michael Kirban sold over $22 million in multiple tranches from late 2021 to mid-2023. Other top executives (CFO, President, and co-founders) offloaded more than $36 million combined.The bulk of these sales occurred right before major product failures (like Runa and Ever & Ever) and while revenue growth was already stagnating.

Here’s what’s worse: Many of these transactions were not structured under 10b5–1 plans, indicating opportunistic timing. During earnings calls, management repeatedly assured investors they were “investing in innovation” and “executing a long-term strategy.”

The company authorized no meaningful insider buying in the same time period.In our view, insiders were painting a picture of strength — while privately heading for the exits. And as of 2024:The top 5 insiders collectively own less than 8% of outstanding shares, down from over 20% at IPO. Buybacks remain minimal, signaling a lack of confidence from the board in its own valuation.

🧨 Why This Matters: Insider selling alone isn’t a red flag. But insider selling at the exact moment when a company is losing its largest contract, botching diversification, and masking margin weakness? That’s not normal — it’s predatory.

The Market Mirage — Valuation Detached from Reality

As of early 2025, Vita Coco trades at a forward P/E of ~24x, with a market cap north of $850 million.

That valuation implies:

Category dominance

Steady revenue growth

Diversified brand exposure

Margin stability

Insider alignment

But as we’ve now shown, none of those things are true.

Let’s stack facts against fiction:

“We’re a diversified wellness beverage company.”

92% of revenue still comes from coconut water.

“Private label is a fast-growing segment.”

Costco, its largest PL customer, has exited.

“We’re innovating with new brands and products.”

Over 60% of post-IPO launches have failed or been discontinued.

“Our supply chain gives us an edge.”

Gross margin swings up to 7% per quarter.

“Insiders believe in the long-term story.”

$58M+ in insider stock dumped while growth flatlined.

At 24x forward earnings, investors are paying a premium for a declining brand:

Revenue growth is decelerating

Market share is shrinking

Moat is nonexistent

Product portfolio is collapsing

Insiders are leaving the building

This is not a “category leader.” It’s a cash-out vehicle that’s already run its course.

🔚 Conclusion: The Coconut’s Cracked

Vita Coco sold the Street a simple story: healthy brand, high margins, broad expansion. It worked — until it didn’t.Now, behind the wellness buzzwords, the business is falling apart:The Costco exit alone could wipe out 25% of revenue. Product innovation is dead on arrival. The brand has no pricing power, no growth engine, and no insulation from better-capitalized competitors.Meanwhile, the insiders who know all of this?

They’re long gone — with tens of millions in profit.

*At The Time Of Writing $COCO is Trading At $35.48*