Vita Coco Hires Saatchi, Preps New Campaign

It Is the First Big Agency Hire for the 10-Year-Old Upstart

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Vita Coco, a leader in the fast-growing coconut water category, has signed up its first big ad agency as the brand looks to keep its momentum going in the increasingly crowded market.

Saatchi & Saatchi, New York, will assume lead creative agency duties and is preparing a campaign that is expected to launch by next spring.

The hiring is "really part of an ongoing global growth strategy," said Arthur Gallego, the brand's director of of corporate and consumer communications. "In the past, when the brand has advertised, we've typically worked with smaller shops. So this is the first time that we've worked with a truly global agency."

The move comes about two months after Vita Coco announced plans to launch in China, as a result of a new deal with Red Bull China. The deal involved Vita Coco selling a 25% stake to Reignwood Group, the parent company of Red Bull China.

Saatchi's responsibilities are limited to North America, but Mr. Gallego noted "there is brand architecture [that] informs everything we do globally." The brand is now sold in 13 countries.

Vita Coco, which launched in New York in 2004, had sales of $267.5 million in 2013, according to Euromonitor International, which does not track category-specific shares for coconut water. Citing "industry estimates," the Wall Street Journal in July stated that Vita Coco's market share was about 40%, while reporting that coconut water sales reached $500 million last year. Vita Coco says it controls 60% of the "premium" coconut water market, which it estimates is worth $328 million and says grew 27% in the 52 weeks ending May 14.

Competitors include Coca-Cola-controlled Zico, which in May announced it was making Jessica Alba its "brand ambassador" as part of a new national campaign called "Crack Life Open" that includes print, out-of-home and digital ads. The brand said it was doubling its annual media spend in 2014.

Zico, which had $86.7 million in sales in 2013 according to Euromonitor, spent nearly $1 million on measured media in 2013, according to Kantar Media. PepsiCo-owned O.N.E. coconut water had sales of $40.4 million in 2013, according to Euromonitor.

Vita Coco has focused mostly on sampling programs and targeted outdoor and digital advertising. The brand has celebrity investors including Madonna, Demi Moore and Matthew McConaughey. Rihanna, who is also an investor, appeared in campaigns in 2011 and 2012. Asked if the new campaign would use celebrities, Mr. Gallego said: "Nothing is off the table but we are looking for something that is a little more brand centric."

In a report last year, market researcher Mintel referred to coconut water growth as a "tropical storm." Mintel stated that the number of new product introductions quintupled from 2008 to 2012, noting that coconut water has been the "surprise toast of the beverage industry in recent years."

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