Trump’s Tariff Tidal Wave Could Drown This Coconut Water Juggernaut

Forbes

When it comes to selling coconut water to the health obsessed, New York’s Vita Coco has served up a master class, schooling even giant rivals like Coke and Pepsi. Its next test will be withstanding Trump’s tariff shocks.  Read the full story on Forbes: https://www.forbes.com/sites/sergeiklebnikov/2025/08/27/trumps-tariff-tidal-wave-could-drown-this-coconut-water-juggernaut/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, Trump's tariff tidal wave could drown this coconut water juggernaut.

00:07What do you do when 96% of your revenue comes from coconut water and 100% of your supply

00:13comes from tropical countries targeted by Donald Trump with high tariffs?

00:17This is exactly the situation confronting one of the nation's hottest small-cap companies

00:22today — $516 million in revenue Vitacoco of New York City, the leading maker of coconut

00:28water. Its biggest source of coconuts has heretofore been Brazil, a country now squarely in the

00:34crosshairs of a proposed 50% tariff, courtesy of the Trump administration. Its six other

00:40sources for coconuts aren't much better. The Philippines, tariff 19%, Malaysia, 19%,

00:47Vietnam, 20%, Indonesia, 19%, Thailand, 19%, and Sri Lanka, 20%.

00:56Still, you wouldn't know that Vitacoco was facing a Trump tariff nightmare given the

01:00company's bullish tone, or its stock performance. Shares are up nearly 32% over the past 12 months,

01:07outperforming many better-known consumer staples names.

01:11Even with the stock down roughly 5% year-to-date as the broader market rallies, Wall Street is

01:16shrugging off Vitacoco's inevitable pricing pressure. Co-founder and executive chairman Michael

01:21Kirban insists, quote, Brazil is really a non-issue for us if enacted. We started working on reallocating

01:28our Brazil supply, which historically goes to the United States, to supply Europe and Canada,

01:33several weeks ago. The main source of supply for Europe, meanwhile, the Philippines, Sri Lanka,

01:39and Malaysia will now all shift to the US. Kirban says he doesn't expect to pass any further price hikes in the

01:46coming months. But this may be wishful thinking if Trump doesn't back away from his harsh tariffs on

01:51tropical countries. On its Q2 earnings call this summer, Vitacoco CEO Martin Roper said, quote,

01:58Our planned U.S.-based price increase in May to cover inflationary cost-of-goods pressures produced

02:03an approximately 7% increase at U.S. food retailers, according to Circana, over the quarter.

02:09However, the May price increase does not include another recent price increase implemented in the

02:15current quarter, which Vitacoco management refused to provide Forbes details on. For now, Wall Street

02:21is putting its faith in Vitacoco management. By working with seven of the largest coconut processors

02:27in the world, Vitacoco currently controls roughly 40% of the U.S. coconut water market, far ahead of

02:33smaller competitors like Goya and Harmless Harvest. Larry Carlin, an equity analyst at $8 billion in

02:40assets, Conestoga Capital Advisors, who is hopeful that Vitacoco's strong position will give it more

02:45flexibility in the face of looming tariffs, says, quote, Coca-Cola tried to enter this market, buying

02:51Zico, and Pepsi also failed. They've developed a supply chain with substantial barriers to entry.

02:57Founded by two friends in 2003 after a chance bar room encounter in Manhattan, Vitacoco met early

03:05success in its first decade, thanks in part to celebrity investors including Madonna, Demi Moore,

03:10and Matthew McConaughey. However, about a decade into their journey, growing pains hit. Then margins,

03:17distribution hiccups, and a rocky 2021 IPO kept many institutions away. But over the past two years,

03:24the company has executed a disciplined turnaround, tightening its supply chain after the COVID pandemic.

03:30It has also expanded its portfolio of offerings into protein-infused Power Lift,

03:34aluminum-canned Ever and Ever Water, and most recently, the coconut milk-based beverage line

03:39Vitacoco Treats. Up until the onslaught of Trump's tariffs, Vitacoco was the envy of the Russell 2000,

03:46appearing near the top of Forbes' Best Small Companies ranking in 2024. The stock is up 133%

03:53since its IPO, and five-fold from its low in 2022. On the company's second quarter earnings call,

04:00CFO Corey Baker noted that Vitacoco is pursuing a formal tariff exemption request with U.S. trade

04:06officials. If that isn't granted, management basically told shareholders to brace themselves.

04:12Baker says, quote, If the 50% Brazilian tariff is enacted, we would ultimately need to pass through

04:18price increases. For full coverage, check out Sergei Klebnikov's piece on Forbes.com.

04:27This is Kieran Meadows from Forbes. Thanks for tuning in.

04:39I mean, party back to you.

04:51I think you will see here!

04:56You simply don't have one accruciating the game!

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