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What changed in Vita Coco Company, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Vita Coco Company, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+312 added−268 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-29)

Top changes in Vita Coco Company, Inc.'s 2024 10-K

312 paragraphs added · 268 removed · 235 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRaw materials used in our business and by our co-packers consist of ingredients and packaging materials purchased from local, regional and international suppliers. The principal ingredients and packaging include coconut water, Tetra Paks and caps, cardboard cartons, PET bottles, and aluminum bottles and cans.
Biggest changeThis community outreach has strengthened our long-term manufacturing relationships and we believe will support our capacity needs for future growth. Raw materials used in our business and by our co-packers consist of ingredients and packaging materials purchased from local, regional and international suppliers.
We also compete with other leading functional beverages including Goya, Harmless Harvest, Foco, BodyArmor, Monster Energy, Red Bull, Bang, Ocean Spray and Bai, as well as a 8 Table of Contents range of emerging brands and retailers’ own private label beverage brands. Our competition and competitors vary by market due to regional brands and taste preferences.
We also compete with other leading functional beverages including Goya, Harmless Harvest, Foco, BodyArmor, Monster Energy, Red Bull, Bang, Ocean Spray and Bai, as well as a range of 8 Table of Contents emerging brands and retailers’ own private label beverage brands. Our competition and competitors vary by market due to regional brands and taste preferences.
Our Board of Directors provides oversight of the policies and procedures relating to talent, leadership, culture and compensation plans for our Executive Chairman and Chief Executive Officer. The Compensation Committee evaluates and approves the compensation plans for our executive officers.
Our Board of Directors (the "Board") provides oversight of the policies and procedures relating to talent, leadership, culture and compensation plans for our Executive Chairman and Chief Executive Officer. The Compensation Committee evaluates and approves the compensation plans for our executive officers.
Our network provides us with significant production capacity and capabilities, and an ability to re-allocate coconut water sourcing in the event of supply chain issues, weather, logistics or other macroeconomic impacts. Coconut water needs to be transferred from the coconut into an aseptic package within hours of cutting a coconut from the tree.
Our network provides us with significant production capacity and capabilities, and an ability to re-allocate coconut water sourcing in the event of supply chain issues, weather, logistics or other macroeconomic impacts. Coconut water needs to be transferred from the coconut into an aseptic package or converted to concentrate within hours of cutting a coconut from the tree.
Through our access and relationships with coconut processors and manufacturers in many countries, including the Philippines, Indonesia, Malaysia, Thailand, Sri Lanka, and Brazil, we have built up a unique body of knowledge and relationships that promote coconut water processing at scale, as well as gained access to farms across diversified geographies.
Through our access and relationships with coconut processors and manufacturers in many countries, including the Philippines, Indonesia, Malaysia, Thailand, Sri Lanka, Brazil, and Vietnam, we have built a unique body of knowledge and relationships that promote coconut water processing at scale, as well as gained access to farms across diversified geographies.
Our other brands include Ever & Ever , a sustainably packaged water, and PWR LIFT , a protein-infused fitness drink. We also offered Runa , a plant-based energy drink inspired by the guayusa plant native to Ecuador, which we ceased selling in December 2023.
Our other brands include Ever & Ever , a sustainably packaged water, and PWR LIFT , a protein-infused fitness drink. We previously offered Runa , a plant-based energy drink inspired by the guayusa plant native to Ecuador, which we ceased selling in December 2023.
Products that do not comply with applicable governmental or third-party regulations and standards may be considered adulterated or misbranded and subject, but not limited to, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, import holds, injunctions, fines, civil penalties or criminal prosecution.
Products that do not comply with applicable governmental or third-party regulations and standards may be considered adulterated or misbranded and subject, but not limited to, warning or untitled letters, product withdrawals or 11 Table of Contents recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, import holds, injunctions, fines, civil penalties or criminal prosecution.
We, along with our distributors and manufacturing and co-packing partners, are subject to extensive laws and regulations in the United States by federal, state and local government authorities including, among others, the U.S. Federal Trade Commission ("FTC"), the U.S. Food and Drug Administration ("FDA"), the U.S. Department of Agriculture, the U.S. Environmental Protection Agency and the U.S.
We, along with our distributors and manufacturing and co-packing partners, are subject to extensive laws and regulations in the U.S. by federal, state and local government authorities including, among others, the U.S. Federal Trade Commission ("FTC"), the U.S. Food and Drug Administration ("FDA"), the U.S. Department of Agriculture, the U.S. Environmental Protection Agency ("EPA") and the U.S.
In 2014, we created the Vita Coco Project to support and empower our coconut farming communities by encouraging innovative farming practices, improving education resources, and scaling our business to promote economic prosperity.
In 2014, we created the Vita Coco Project to support and empower our coconut farming communities by encouraging innovative farming practices, improving educational resources, and scaling our business to promote economic prosperity.
Vita Coco has evolved from a primarily pure coconut water brand to a full portfolio of coconut-based products. The portfolio now includes multiple offerings in the coconut water category with Vita Coco Pressed, Vita Coco Coconut Juice, and Farmers Organic, with offerings in adjacent plant-based categories such as Vita Coco Coconut MLK, Vita Coco Barista and Vita Coco Coconut Oil.
Vita Coco has evolved from a primarily pure coconut water brand to a full portfolio of coconut-based products. The portfolio now includes multiple offerings in the coconut water category with Vita Coco Pressed, Vita Coco Coconut Juice, and Farmers Organic, with offerings in adjacent plant-based categories such as Vita Coco Coconut MLK, and Vita Coco Treats.
The innovation team works closely with our internal global research and development and technical teams that include employees in the United States, Europe and Singapore focused on supplier capability, quality improvements and new processes. We also have strong supplier relationships that give us access to a broad scope of ingredients, packaging offerings and technologies.
The innovation team works closely with our internal global research and development and technical teams that include employees in the U.S., Europe and Singapore focused on supplier capability, quality improvements and new processes. We also have strong supplier relationships that give us access to a broad scope of ingredients, packaging offerings and technologies.
We supply private label products to key retailers in both the coconut water and coconut oil categories. Additionally, we generate revenue from bulk product sales to beverage and food companies. We source our coconut water from a diversified global network of 14 factories across six countries supported by thousands of coconut farmers.
We supply private label products to key retailers in both the coconut water and coconut oil categories. Additionally, we generate revenue from bulk product sales to beverage and food companies. We source our coconut water from a diversified global network of 17 factories across seven countries supported by thousands of coconut farmers.
We are one of the largest brands globally in the coconut and other plant waters category, and a large supplier of private label coconut water. Our branded portfolio is led by our Vita Coco brand, which is the leader in the coconut water category in the United States, and also includes coconut oil, juice, and milk offerings.
We are one of the largest brands globally in the coconut and other plant waters category, and a large supplier of private label coconut water. Our branded portfolio is led by our Vita Coco brand, which is the leader in the coconut water category in the U.S., and also includes coconut oil, juice, and milk offerings.
Our production contracts are mostly denominated in United States dollars, with some limited contracts in local currencies such as the Brazilian real. Distribution, Sales and Marketing Our beverages and other products are sold in club stores, supermarkets, convenience stores, drug stores and e-commerce websites as well as other outlets.
Our production contracts are mostly denominated in U.S. dollars, with some limited contracts in local currencies such as the Brazilian real. Distribution, Sales and Marketing Our beverages and other products are sold in club stores, supermarkets, convenience stores, drug stores, and e-commerce websites, as well as other outlets.
We have in place reasonable measures to keep the above-mentioned items, as well as our business and marketing plans, customer lists and contracts reasonably protected. Government Regulation Our products are regulated in the United States as conventional foods.
We have reasonable measures in place to keep the above-mentioned items, as well as our business and marketing plans, customer lists and contracts reasonably protected. Government Regulation Our products are regulated in the U.S. as conventional foods.
Our Vita Coco coconut milk product is a plant-based dairy alternative and our PWR LIFT brand competes in the enhanced isotonic category. We also develop and sell other brands in the beverage category, and occasionally in other categories, as we test our ideas for expanding our product portfolio.
Our Vita Coco coconut milk product, which includes our recently launched Vita Coco Treats, is a plant-based dairy alternative and our PWR LIFT brand competes in the enhanced isotonic category. We also develop and sell other brands in the beverage category, and occasionally in other categories, as we test our ideas for expanding our product portfolio.
With our “Give, Grow, Guide” philosophy, we seek to contribute to educational programs and facilities by supporting initiatives to build new classrooms and fund scholarships, with a goal to impact the lives of people in these communities.
With our impact driven philosophy, we seek to contribute to educational programs and facilities by supporting initiatives to build new classrooms and fund scholarships, with a goal to impact the lives of people in these communities.
As we do not own any of these factories, our supply chain is a fixed asset-lite model designed to better react to changes in the market or consumer preferences. We also work with co-packers in America and Europe to support local packaging and repacking of our products and to better service our customers’ needs.
As we do not own any of these factories, our supply chain is a fixed asset-light model designed to better react to changes in the market or consumer preferences. We also work with co-packers across four countries to support local packaging and repacking of our products and to better service our customers’ needs.
Vita Coco is available in over 30 countries, with our primary markets in North America, the United Kingdom, and China. Our primary markets for private label are North America and Europe. Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce, and foodservice channels.
Vita Coco is available in over 35 countries, with our primary markets in North America, the United Kingdom (the "U.K."), and Germany. Our primary markets for private label are North America and Europe. Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce and foodservice channels.
Our well-diversified global manufacturing network spans across 14 coconut water factories in six countries that are operated by our manufacturing partners and five co-packing facilities for products not packaged near source.
Our well-diversified global manufacturing network spans across 17 coconut water factories in seven countries that are operated by our manufacturing partners and six co-packing facilities in four countries for products not packaged near source.
Through achieving Certified B Corporation status, The Vita Coco Company, Inc. joined its subsidiary, All Market Europe Ltd., a United Kingdom company, which had previously achieved Certified B Corporation status.
Through achieving Certified B Corporation status, The Vita Coco Company, Inc. joined its subsidiary, All Market Europe Ltd., a U.K. company, which had previously achieved Certified B Corporation status.
Additional Information 12 Table of Contents The Vita Coco Company, Inc. was incorporated in Delaware as a corporation in January 2007 and as a public benefit corporation in April 2021. We completed an initial public offering of our common stock in October 2021. Our website is www.thevitacococompany.com.
Additional Information The Vita Coco Company, Inc. was incorporated in Delaware as a corporation in January 2007 and as a public benefit corporation in April 2021. We completed an IPO of our common stock in October 2021. Our website is www.thevitacococompany.com.
In the Americas, the sales team focuses on three main areas: (i) DSD management, (ii) national account management (including club, mass food and convenience) and (iii) retail execution. Our European sales team is aligned geographically and by major account or by import partner and is further supported by a small field execution and marketing team in the United Kingdom.
In the Americas, the sales team focuses on three main areas: (i) DSD management, (ii) national account management (including club, mass food and convenience), and (iii) retail execution. Our International sales teams are aligned geographically and by major account or by import partner, and is further supported by small field execution and marketing teams.
Additionally, we compete within the broad non-alcoholic beverage category, and our flagship brand, Vita Coco , is the market leader in the coconut water category in the United States.
Additionally, we compete within the broad non-alcoholic beverage category, and our flagship brand, Vita Coco , is the market leader in the coconut water category in the U.S.
Item 1. Business. Overview The Vita Coco Company is a leading platform for brands in the functional beverage category. We pioneered packaged coconut water in 2004 and have extended our business into other categories. Our mission is to deliver great tasting, natural and nutritious products that we believe are better for consumers and better for the world.
Item 1. Business. Overview The Vita Coco Company pioneered packaged coconut water in 2004 and we have extended our business into other categories. Our mission is to deliver great tasting, natural and nutritious products that we believe are better for consumers and better for the world.
Human Capital As of December 31, 2023, we had 294 full-time employees. Of these employees, 220 were employed in the United States. None of these employees are represented by labor unions or covered by collective bargaining agreements. We have never experienced a labor-related work stoppage. Our people are at the heart of our business.
Human Capital As of December 31, 2024, we had 319 full-time employees. Of these employees, 234 were employed in the U.S. None of these employees are represented by labor unions or covered by collective bargaining agreements. We have never experienced a labor-related work stoppage. Our people are at the heart of our business.
Ever & Ever was launched with a focus on the food service and office channels. PWR LIFT In 2021, we launched PWR LIFT, a beverage targeted at post-workout and recovery occasions with added nutritional benefits. PWR LIFT is a protein-infused sports drink with electrolytes, BCAAs and zero sugar, designed to provide fitness-minded consumers with protein in a hydrating beverage.
PWR LIFT In 2021, we launched PWR LIFT, a beverage targeted at post-workout and recovery occasions with added nutritional benefits. PWR LIFT is a protein-infused sports drink with electrolytes, BCAAs, and zero sugar, designed to provide fitness-minded consumers with protein in a hydrating beverage.
Vita Coco is the coconut water category leader with greater than 50% market share in the United States according to Circana US for the 52 weeks ending December 31, 2023, which over indexes to younger households and to more multicultural shoppers. We offer Vita Coco coconut water as an alternative to sugar-packed sports drinks and other less healthy alternatives.
Vita Coco is the coconut water category leader with greater than 40% market share in the U.S. according to Circana US for the 52 weeks ended December 29, 2024, which over indexes to younger households and to more multicultural shoppers. We offer Vita Coco coconut water as an alternative to sugar-packed sports drinks and other less healthy alternatives.
To further support our public benefit purpose and "Give, Grow, Guide" philosophy, we formed the Vita Coco Community Foundation, a standalone nonprofit corporation in December 2023. Annually, we publish an Impact Report describing the environmental and social impacts of our business.
To further support our public benefit purpose and impact driven philosophy, we formed the Vita Coco Community Foundation, a standalone, 501(c)(3) nonprofit organization, in December 2023. Annually, we publish an Impact Report describing the environmental and social impacts of our business.
Business Operations As of December 31, 2023, we operate in two business segments: (i) the Americas segment, comprised of our operations primarily in the United States and Canada and (ii) the International segment, comprised of operations primarily in Europe, the Middle East, Africa and the Asia Pacific regions.
Business Operations As of December 31, 2024, we operated in two business segments: (i) the Americas segment, comprised of our operations primarily in the U.S. and Canada; and (ii) the International segment, comprised of operations primarily in Europe, the Middle East, Africa and the Asia Pacific regions.
As a public benefit corporation, we are required by Delaware law to provide a biennial statement on our promotion of the public benefits identified in our certificate of incorporation and of the best interests of those materially affected by the corporation's conduct. Our biennial public benefit corporation statement was included in our Impact Report issued in early 2023.
As a public benefit corporation, we are required by Delaware law to provide a biennial statement on our promotion of the public benefits identified in our certificate of incorporation and of the best interests of those materially affected by the corporation's conduct. We intend to use the Impact Report to be issued later this year as such biennial statement.
Our Diversity and Inclusivity Committee works to celebrate all our employees, educate and recommend improvements to our processes to enhance our organization and our culture. As of December 31, 2023, approximately 47% of our employees identified as female, 49% identified as male, and 4% did not disclose their gender identity.
Our Diversity and Inclusivity Committee works to celebrate all our employees, educate and recommend improvements to our processes to enhance our organization and our culture. As of December 31, 2024, approximately 50% of our employees in our global workforce identified as female, 50% identified as male, and 0% did not disclose their gender identity.
We believe the protection of our trademarks, designs, copyrights, patents, domain names, trade dress and trade secrets are important to our success. As of December 31, 2023, we had over 30 registered trademarks and over 10 pending trademark applications in the United States, as well as over 240 registered trademarks and over 10 pending trademark applications in other countries.
We believe the protection of our trademarks, designs, copyrights, patents, domain names, trade dress and trade secrets are important to our success. As of December 31, 2024, we had over 20 registered trademarks and over five pending trademark applications in the U.S., as well as over 230 registered trademarks and over 10 pending trademark applications in other countries.
In addition, at the end of 2023, 38% of our employees identified as Black, Indigenous and/or People of Color or two or more races, 48% identified as white, and 13% did not disclose their race. We strive to reflect the diverse identities and cultures of our consumers.
In addition, at the end of 2024, approximately 30% of our employees identified as Black, Indigenous and/or People of Color or two or more races, 40% 12 Table of Contents identified as white, and 30% did not disclose their race. We strive to reflect the diverse identities and cultures of our consumers.
While ov er 92% of our business is based on sales of coconut water, we have used our access to market to add other beverage brands with a long-term view to building a diversified beverage platform of compatible brands.
While 96% of our business is based on sales of coconut water, we have used our access to market to add other beverage brands, and production innovations such as Vita Coco Treats, with a long-term view to building a diversified beverage platform of compatible brands.
Ever & Ever Launched in 2019, Ever & Ever is a purified water brand packaged solely in aluminum bottles. Given consumer concerns with the disposal or recyclability of plastic water bottles, we created Ever & Ever to respond to the consumer need for a sustainably packaged water product in aluminum bottles with potential infinite recyclability.
Given consumer concerns with the disposal or recyclability of plastic water bottles, we created Ever & Ever to respond to the consumer 9 Table of Contents need for a sustainably packaged water product in aluminum bottles with potential infinite recyclability. Ever & Ever was launched with a focus on the food service and office channels.
Our fixed asset-lite model enhances production flexibility and capacity, and enables us to focus on our core in-house capabilities which include supplier management, logistics, sales and marketing, brand management and customer service.
Supply Chain We engage contract manufacturers, co-packers and third-party logistics providers to manufacture and distribute our products. Our fixed asset-light model enhances production flexibility and capacity, and enables us to focus on our core in-house capabilities which include supplier management, logistics, sales and marketing, brand management and customer service.
Our key strategies for growth for Vita Coco coconut water include: 1) offering more multipacks in coconut water to increase consumption with core consumers, 2) increasing distribution of other product offerings such as Farmers Organic and Vita Coco Coconut Juice, 3) expanding the number of households that purchase our products, and 4) growing opportunities for new usage generally.
Our key strategies for growth for Vita Coco coconut water include: 1) expanding the coconut water category through consumer education of the numerous usage occasions for coconut water, 2) increasing distribution of other product offerings such as Farmers Organic, Vita Coco Coconut Juice, and launching new product innovations, such as Vita Coco Treats, 3) expanding the number of households that purchase our products, 4) growing opportunities for new usage generally, and 5) developing and expanding our markets globally.
We work with our contract manufacturing partners to purchase our raw ingredients from local suppliers in accordance with rigorous standards to assure responsible sourcing, quality and safety.
The principal ingredients and packaging include coconut water, Tetra Paks and caps, cardboard cartons, PET bottles, and aluminum bottles and cans. We work with our contract manufacturing partners to purchase our raw ingredients from local suppliers in accordance with rigorous standards to assure responsible sourcing, quality and safety.
In addition, some of our products are produced and marketed under contract as part of special certification programs such as organic, kosher or non-GMO, and must comply with the strict standards of federal, state and third-party certifying organizations. 11 Table of Contents Public Benefit Corporation Status and Corporate Social Responsibility We operate as a Delaware public benefit corporation, and, therefore, our operational decision-making goes beyond solely maximizing shareholder value.
In addition, some of our products are produced and marketed under contract as part of special certification programs such as organic, kosher or non-GMO, and must comply with the strict standards of federal, state and third-party certifying organizations.
Private Label We expanded into private label coconut water in 2016 as a way to develop stronger ties with select, strategic retail partners and improve our operating scale.
Vita Coco coconut water has a presence in key markets such as China, France, Germany, the Middle East, the Benelux region, Spain, the Nordic Region and Africa. Private Label We expanded into private label coconut water in 2016 as a way to develop stronger ties with select, strategic retail partners and improve our operating scale.
Internationally, our business is anchored by Vita Coco ’s presence in the United Kingdom, where it is the chilled coconut water category leader with 89% market share, according to Circana UK, for the 52 weeks ended December 30, 2023.
Internationally, our business is anchored by Vita Coco ’s presence in the U.K., where it is the coconut water category leader with 82% market share, according to Circana UK, for the 52 weeks ended December 28, 2024. Our U.K. commercial team and our supply chain based in Asia have allowed us to sell into other European and Asian countries.
Private label accounts are handled by each geographic division in close cooperation with supply chain leadership. Our sales and marketing function in China is handled by our importer. We also employ a brand, marketing, e-commerce and insights team with strong creative, social and digital capabilities with a primary focus on the North American and European markets.
Our Coco Ventures joint venture supports sales and marketing of our distributor in China. 10 Table of Contents We also employ a brand, marketing, e-commerce and insights team with strong creative, social and digital capabilities with a primary focus on the North American and European markets.
We also attempt to foster a thriving loyal farming community around our manufacturing partners through our work with charitable organizations to support agricultural education programs and investments in schooling. This community outreach has strengthened our long-term manufacturing relationships and we believe will support our capacity needs for future growth.
Our co-packing facilities, which primarily use concentrate, are located in Canada, Mexico, the U.S., and the U.K. We also attempt to foster a thriving loyal farming community around our manufacturing partners through our work with charitable organizations to support agricultural education programs and investments in schooling.
Our European market is primarily retail and e-commerce operator direct sales, with some countries supported by distributor or importer type relationships. In China, we sell to Reignwood Investment (China) Co., Ltd, which is our import and distributor partner for the territory, and, through its affiliates, was one of our significant shareholders prior to 2023.
Our European market is primarily retail and e-commerce operator direct sales, with some countries supported by distributor or importer type relationships. In China, we sell through a joint venture with the Jebsen Group, Coco Ventures Limited, which provides for the development, marketing, distribution and branding of coconut water-based products under the Vita Coco brand in China.
Today, we continue to leverage relationships with talent and influencers who are aligned with our values and are genuine fans of our brands.
Today, we continue to collaborate with talent and influencers who we believe share our values and are authentic fans of our brands. We execute across a broad marketing mix to bring our brand to life in creative and engaging ways, ensuring we connect with our audience in genuine and meaningful ways.
In 2022 and 2023, we tested PWR LIFT in select markets including Arizona, North Carolina, South Carolina and Texas. During that time, PWR LIFT became the official sponsor of HYROX, a rapidly-growing competition known as the "World Series of Racing." In early 2024, PWR LIFT will launch in New York City metro area.
In 2022 and 2023, we tested PWR LIFT in Arizona and Texas, while also establishing the brand within fast-growing fitness spaces like HYROX and Spartan. In early 2024, PWR LIFT expanded testing to the New York City metro area.
Removed
Our United Kingdom commercial team and our supply chain based in Asia have allowed us to sell into other European and Asian countries. Vita Coco coconut water has a presence in key markets such as China, France, Germany, the Middle East, the Benelux region, Spain, the Nordic Region, and Africa.
Added
While PWR LIFT has proved to be attractive in online sales channels, we are still forming a successful long-term approach to retail channels.
Removed
The brand targets fitness enthusiasts and consumers seeking healthier beverage options, and we plan to grow the brand by focusing on premium retail execution, brand sponsorships, influencer partnerships and social media advertising. 9 Table of Contents Runa Runa is a plant-based, natural offering for consumers in the energy drink market.
Added
As the protein drink category continues to grow, PWR LIFT will focus growing the consumer base and appeal of the brand through communicating lifestyle occasions and by messaging the broad variety of benefits that protein and hydration have to offer health-seeking consumers.
Removed
A key ingredient in Runa is guayusa, an Amazonian jungle plant. As of December 2023, we ceased offering this brand. Supply Chain We engage contract manufacturers, co-packers and third-party logistics providers to manufacture and distribute our products.
Added
In 2025, we will continue online sales as we redesign PWR LIFT 's approach to succeeding in the protein drink category. Ever & Ever Launched in 2019, Ever & Ever is a purified water brand packaged solely in aluminum bottles.
Removed
The primary goal of our marketing function is to educate consumers about the functional benefits of our products while inspiring consumers to fall in love 10 Table of Contents with our brands. Since the early days, our brands have been sponsored by a roster of celebrity and athlete fans.
Added
We paused production of Ever & Ever in 2024 and are evaluating whether to discontinue the product, as it does not meaningfully contribute to our business. Runa Runa was a guayusa plant-based, natural offering for consumers in the energy drink market. As of December 2023, we ceased offering this brand.
Added
Private label accounts are handled by each geographic division in close cooperation with supply chain leadership.
Added
Our marketing efforts are centered around educating consumers on the functional benefits of our products while fostering a deep emotional connection with our brands. From the beginning, we have been supported by a diverse group of celebrity and athlete enthusiasts.
Added
Public Benefit Corporation Status and Corporate Social Responsibility We operate as a Delaware public benefit corporation, and, therefore, our operational decision-making goes beyond solely maximizing shareholder value.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

81 edited+46 added−8 removed294 unchanged
Biggest changeOur amended and restated certificate of incorporation provides that, subject to limited exceptions, (1) any derivative action or proceeding brought on behalf of the Company, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended or restated) or as to which the Delaware General Corporation Law confers exclusive jurisdiction on the Court 33 Table of Contents of Chancery of the State of Delaware or (4) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware.
Biggest changeOur amended and restated certificate of incorporation provides that, subject to limited exceptions, the following actions must be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware: • any derivative action or proceeding brought on behalf of the Company; • any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders; • any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended or restated) or as to which the Delaware General Corporation Law confers exclusive jurisdiction on the Court of Chancery of the State of Delaware; or • any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware. 35 Table of Contents Additionally, our amended and restated certificate of incorporation provides that the federal district courts of the United States are the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against a defendant to such complaint.
Further, changes in business conditions, pandemics, governmental regulations and other factors beyond our control or that we do not presently anticipate could affect our manufacturing and co-packing partners’ ability to receive components from our existing or future suppliers of such materials or the availability of such components generally.
Further, changes in business conditions, pandemics, governmental regulations and other factors beyond our control that we do not presently anticipate could affect our manufacturing and co-packing partners’ ability to receive components from our existing or future suppliers of such materials or the availability of such components generally.
If our customers suffer significant financial or operational difficulty, they may reduce their orders from us or stop purchasing from us and/or be unable to pay the amounts due to us timely or at all, which could have a material adverse effect on our ability to collect on receivables, our revenues and our results of operations.
If our customers suffer significant financial or operational difficulty, they may reduce their orders from us or stop purchasing from us and/or be unable to timely pay the amounts due to us or at all, which could have a material adverse effect on our ability to collect on receivables, our revenues and our results of operations.
The success of our innovation and product development efforts is affected by our ability to anticipate changes in consumer preferences, the technical capability of our innovation staff in developing and testing product prototypes to meet these consumer needs while complying with applicable governmental regulations, the ability to obtain patents and other intellectual property rights and protections for commercializing such innovations and developments, the ability of our supply chain and production systems to provide adequate solutions and capacity for new products, and the success of our management and sales and marketing teams in designing, branding and packaging and introducing and marketing new products.
The success of our innovation and product development efforts is affected by our ability to anticipate changes in consumer preferences, the technical capability of our innovation staff in developing and testing product prototypes to meet these consumer needs while complying with applicable governmental regulations, the ability to obtain patents and other intellectual property rights and protections for commercializing such innovations and developments, the ability of our supply chain and production systems to provide adequate solutions and capacity for new products, and the success of our management and sales and marketing teams in designing, branding and packaging, introducing and marketing new products.
As a Delaware public benefit corporation, our focus on a specific public benefit purpose and producing positive effect for society may negatively impact our financial performance or increase legal risk.
As a Delaware public benefit corporation, our focus on a specific public benefit purpose and producing a positive effect for society may negatively impact our financial performance or increase legal risk.
Among others, these provisions include that: • the forum for certain litigation against us is restricted to Delaware or the federal courts, as applicable; • our board of directors has the exclusive right to expand the size of our board of directors and to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • our stockholders may not act by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • a special meeting of stockholders may be called only by the chair of the board of directors, a chief executive officer, or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • our amended and restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • our board of directors may alter our bylaws without obtaining stockholder approval; • the required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • stockholders must provide advance notice and additional disclosures in order to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our Company; and • our board of directors is authorized to issue shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer.
Among others, these provisions include that: • the forum for certain litigation against us is restricted to Delaware or the federal courts, as applicable; • the Board has the exclusive right to expand the size of the Board and to elect directors to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board; • the Board is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of the Board; • our stockholders may not act by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • a special meeting of stockholders may be called only by the chair of the Board, a chief executive officer, or the Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; 34 Table of Contents • our amended and restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the Board may alter our bylaws without obtaining stockholder approval; • the required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • stockholders must provide advance notice and additional disclosures in order to nominate individuals for election to the Board or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our Company; and • the Board is authorized to issue shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer.
We may collect, maintain, and otherwise process personal information and other data relating to our employees and customers. Additionally, we sell products directly to consumers from our website and rely on a variety of marketing techniques, including email and social media marketing, and we are subject to various laws and regulations that govern such selling, marketing and advertising practices.
We collect, maintain, and otherwise process personal information and other data relating to our employees and customers. Additionally, we sell products directly to consumers from our website and rely on a variety of marketing techniques, including email and social media marketing, and we are subject to various laws and regulations that govern such selling, marketing and advertising practices.
We may not be successful in our efforts to make acquisitions and successfully integrate newly acquired products or businesses. We have in the past pursued and may in the future consider opportunities to acquire other products or businesses that may strategically complement our portfolio of brands and expand the breadth of our markets or customer base.
We may not be successful in our efforts to make acquisitions and successfully integrate newly acquired products or businesses. We have in the past pursued and intend in the future to consider opportunities to acquire other products or businesses that may strategically complement our portfolio of brands and expand the breadth of our markets or customer base.
Bribery Act) and data privacy laws and regulations (including the EU’s General Data Protection Regulation); • the imposition of differing labor and employment laws and standards; • significant differences in regulations across international markets, including new regulations that could impact requirements applicable to our products and the regulatory impacts on a globally integrated supply chain; 21 Table of Contents • the varying trademark laws and regulations, or difficulties with international intellectual property protection and problems created by counterfeiting; • the bankruptcy or default in payment by our international customers and/or import partners and the potential inability to recoup damages from such defaults, as well as subsequent termination of existing importation agreements; • the difficulty and costs of designing and implementing an effective control environment across diverse regions and employee bases; • the complexities of monitoring and managing compliance with a broad array of international laws related to data privacy and data protection, as well as cross-border transfers of personal data; • the difficulty and costs of maintaining effective data security and meeting different data security regulations; • global cost and pricing pressures; • complex supply chain and shipping logistical challenges; and • unfavorable and/or changing foreign tax treaties and policies.
Bribery Act) and data privacy laws and regulations (including the EU’s General Data Protection Regulation); • the imposition of differing labor and employment laws and standards; • significant differences in regulations across international markets, including new regulations that could impact requirements applicable to our products and the regulatory impacts on a globally integrated supply chain; • the varying trademark laws and regulations, or difficulties with international intellectual property protection and problems created by counterfeiting; • the bankruptcy or default in payment by our international customers and/or import partners and the potential inability to recoup damages from such defaults, as well as subsequent termination of existing importation agreements; • the difficulty and costs of designing and implementing an effective control environment across diverse regions and employee bases; • the complexities of monitoring and managing compliance with a broad array of international laws related to data privacy and data protection, as well as cross-border transfers of personal data; • the difficulty and costs of maintaining effective data security and meeting different data security regulations; • global cost and pricing pressures; • complex supply chain and shipping logistical challenges; and • unfavorable and/or changing foreign tax treaties and policies.
Thus, while we attempt to mitigate the risk by sourcing in multiple geographic areas, the supply of coconuts and other ingredients may be particularly affected by any adverse events in these countries or regions.
Thus, while we attempt to mitigate the risk by sourcing in multiple geographic areas, the supply of coconuts and other ingredients and materials may be particularly affected by any adverse events in these countries or regions.
There is no assurance that we will achieve our public benefit purpose or that the expected positive impact from being a public benefit corporation will be realized, which could have a material adverse effect on our reputation, which in turn may have a material adverse effect on our business, financial condition, results of operations and cash flows. 34 Table of Contents As a public benefit corporation, we are required to publicly disclose a report at least biennially on our overall public benefit performance and on our assessment of our success in achieving our specific public benefit purpose.
There is no assurance that we will achieve our public benefit purpose or that the expected positive impact from being a public benefit corporation will be realized, which could have a material adverse effect on our reputation, which in turn may have a material adverse effect on our business, financial condition, results of operations and cash flows. 36 Table of Contents As a public benefit corporation, we are required to publicly disclose a report at least biennially on our overall public benefit performance and on our assessment of our success in achieving our specific public benefit purpose.
As discussed above under, “If we encounter problems or interruptions with our supply chain, our costs may increase and our or our customers’ ability to deliver our products to market could be adversely affected, impacting our 26 Table of Contents business and profitability,” our systems and those of our third party vendors, service providers, and business partners may be subject to damage or interruption from power outages or damages, telecommunications problems, data corruption, software errors, network failures, acts of war, or terrorist attacks, fire, flood, global pandemics and natural disasters; our existing safety systems, data backup, access protection, user management and information technology emergency planning may not be sufficient to prevent data loss or long-term network outages.
As discussed above under, “If we encounter problems or interruptions with our supply chain, our costs may increase and our or our customers’ ability to deliver our products to market could be adversely affected, impacting our business and profitability,” our systems and those of our third party vendors, service providers, and business partners may be subject to damage or interruption from power outages or damages, telecommunications problems, data corruption, software errors, network failures, acts of war, or terrorist attacks, fire, flood, global pandemics and natural disasters; our existing safety systems, data backup, access protection, user management and information technology emergency planning may not be sufficient to prevent data loss or long-term network outages.
Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.
Because the Board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.
For example: 35 Table of Contents • we may choose to revise our policies in ways that we believe will be beneficial to our stakeholders, including suppliers, employees and local communities, even though the changes may be costly; • we may take actions that exceed regulatory requirements, even though these actions may be more costly than other alternatives; • we may be influenced to pursue programs and services to further our commitment to the communities to which we serve even though there is no immediate return to our stockholders; or • in responding to a possible proposal to acquire the Company, our board of directors has a fiduciary duty to consider the interests of our other stakeholders, including suppliers, employees and local communities, whose interests may be different from the interests of our stockholders.
For example: 37 Table of Contents • we may choose to revise our policies in ways that we believe will be beneficial to our stakeholders, including suppliers, employees and local communities, even though the changes may be costly; • we may take actions that exceed regulatory requirements, even though these actions may be more costly than other alternatives; • we may be influenced to pursue programs and services to further our commitment to the communities to which we serve even though there is no immediate return to our stockholders; or • in responding to a possible proposal to acquire the Company, the Board has a fiduciary duty to consider the interests of our other stakeholders, including suppliers, employees and local communities, whose interests may be different from the interests of our stockholders.
In addition, employees may intentionally or inadvertently cause data or security incidents that result in unauthorized payments, release of personally identifiable or confidential information.
In addition, employees may intentionally or inadvertently cause data or security incidents that result in unauthorized payments, and/or release of personally identifiable or confidential information.
While we believe our public benefit designation and obligation will benefit our stockholders, in balancing these interests, our board of directors may take actions that do not maximize stockholder value. Any benefits to stockholders resulting from our public benefit purposes may not materialize within the timeframe we expect or at all and may have negative effects.
While we believe our public benefit designation and obligation will benefit our stockholders, in balancing these interests, the Board may take actions that do not maximize stockholder value. Any benefits to stockholders resulting from our public benefit purposes may not materialize within the timeframe we expect or at all and may have negative effects.
Cross-border data transfers and the use of data transfer mechanisms now involve additional compliance steps and in the event any court blocks personal information transfers to or from a particular jurisdiction on the basis that certain or all such transfer mechanisms are not legally adequate, this could give rise to operational interruption in the performance of services for customers and internal processing of employee 28 Table of Contents information, greater costs to implement alternative data transfer mechanisms that are still permitted, regulatory liabilities, or reputational harm.
Cross-border data transfers and the use of data transfer mechanisms now involve additional compliance steps and in the event any court blocks personal information transfers to or from a particular jurisdiction on the basis that certain or all such transfer mechanisms are not legally adequate, this could give rise to operational interruption in the performance of services for customers and internal processing of employee information, greater costs to implement alternative data transfer mechanisms that are still permitted, regulatory liabilities, or reputational harm.
The 2020 Credit Facility contains, and agreements governing any future indebtedness may contain, a number of covenants which put some limits on our ability to, among other things: • sell, transfer or dispose of assets; • engage in mergers, acquisitions, and other business combinations; • make dividends and distributions on, or repurchases of, equity; • incur, assume, or permit to exist additional indebtedness; • make loans, advances or investments, or give guarantees; • incur liens; and • enter into transactions with affiliates.
The 2020 Credit Facility contains, and agreements governing any future indebtedness may contain, a number of covenants which put some limits on our ability to, among other things: • sell, transfer or dispose of assets; • engage in mergers, acquisitions, and other business combinations; • make dividends and distributions on, or repurchases of, equity; • incur, assume, or permit to exist additional indebtedness; • make loans, advances or investments, or give guarantees; • incur liens; and 32 Table of Contents • enter into transactions with affiliates.
Although we seek to forecast and plan our product needs sufficiently in advance of anticipated requirements to facilitate reserving production time at our manufacturing and co-packing partners, and arranging for the availability and supply of packaging and ingredient materials, our product takes many weeks to arrive at our warehouses from our manufacturing partners, which reduces our flexibility to react to short term or unexpected consumer demand changes and can require planning as much as six months in advance to coordinate all materials for production.
Although we seek to forecast and plan our product needs sufficiently in advance of anticipated requirements to facilitate reserving production time at our manufacturing and co-packing partners, and arranging for the availability and supply of packaging and ingredient 14 Table of Contents materials, our product takes many weeks to arrive at our warehouses from our manufacturing partners, which reduces our flexibility to react to short term or unexpected consumer demand changes and can require planning as much as six months in advance to coordinate all materials for production.
It also requires public companies in the United States to keep books and records that accurately and fairly reflect those companies’ transactions and maintain internal accounting controls to assure management’s control, authority, and responsibility over a company’s assets. OFAC, CBP, the U.S. Department of Commerce and the U.S.
It also requires public companies in the U.S. to keep books and records that accurately and fairly reflect those companies’ transactions and maintain internal accounting controls to assure management’s control, authority, and responsibility over a company’s assets. OFAC, CBP, the U.S. Department of Commerce and the U.S.
Any data security breach, attack, virus or other incident could result in additional financial losses, costly investigations and litigation exceeding applicable insurance coverage or contractual rights available to us, civil or criminal 27 Table of Contents penalties, operational changes or other response measures, loss of consumer confidence in our security measures, and negative publicity that could adversely affect our business, reputation, financial condition, results of operations and cash flows.
Any data security breach, attack, virus or other incident could result in additional financial losses, costly investigations and litigation exceeding applicable insurance coverage or contractual rights available to us, civil or criminal penalties, operational changes or other response measures, loss of consumer confidence in our security measures, and negative publicity that could adversely affect our business, reputation, financial condition, results of operations and cash flows.
Additionally, an additional risk inherent in any acquisition is that we fail to realize a positive return on our investment. Climate change, or legal or market measures to address climate change, may negatively affect our business and operations.
Furthermore, an additional risk inherent in any acquisition is that we fail to realize a positive return on our investment. Climate change, or legal or market measures to address climate change, may negatively affect our business and operations.
Unexpected side effects, illness, injury or death 22 Table of Contents related to allergens, food-borne illnesses or other food safety incidents caused by products we sell or involving our suppliers or manufacturers, could result in the discontinuance of sales of these products or cessation of our relationships with such suppliers and manufacturers, or otherwise result in increased operating costs, lost sales, regulatory enforcement actions or harm to our reputation.
Unexpected side effects, illness, injury or death related to allergens, food-borne illnesses or other food safety incidents caused by products we sell or involving our suppliers or manufacturers, could result in the discontinuance of sales of these products or cessation of our relationships with such suppliers and manufacturers, or otherwise result in increased operating costs, lost sales, regulatory enforcement actions or harm to our reputation.
We depend in large part on the orderly operation of this receiving and distribution process from these third party partners, which depends, in turn, on timely arrival of product from ports or co-packers, availability of outbound and inbound shipping, real-time tracking information on our products location, and effective operations at the warehouses or distribution centers and the ports through which our product flows.
We depend in large part on the orderly operation of this receiving and distribution process from these third party partners, which depends, in turn, on timely arrival of products from ports or co-packers, availability of outbound and inbound shipping, real-time tracking information on our products location, and effective operations at the warehouses or distribution centers and the ports through which our products flow.
Any 31 Table of Contents change in interest rates could affect the income from our cash equivalent balance and such investments, and might impact the market value of such holdings Risks Related to the Ownership of Our Common Stock Concentration of ownership of our shares among our existing executive officers, directors and principal shareholders may prevent new investors from influencing significant corporate decisions.
Any change in interest rates could affect the income from our cash equivalent balance and such investments, and might impact the market value of such holdings Risks Related to the Ownership of Our Common Stock Concentration of ownership of our shares among our existing executive officers, directors and principal shareholders may prevent new investors from influencing significant corporate decisions.
We may be unable to identify suitable targets, opportunistic or otherwise, for acquisition in the future at acceptable terms or at all. In addition, exploring acquisition opportunities may divert management attention from the core business and organic 19 Table of Contents innovation and growth, which could negatively impact our business, financial condition, results of operations and cash flows.
We may be unable to identify suitable targets, opportunistic or otherwise, for acquisition in the future at acceptable terms or at all. In addition, exploring acquisition opportunities may divert management attention from the core business and organic innovation and growth, which could negatively impact our business, financial condition, results of operations and cash flows.
Based upon our shares of common stock outstanding as of December 31, 2023, our executive officers, directors and shareholders who own more than 5% of our outstanding share capital, in the aggregate, beneficially own over 30% of our outstanding shares of common stock.
Based upon our shares of common stock outstanding as of December 31, 2024, our executive officers, directors and shareholders who own more than 5% of our outstanding share capital, in the aggregate, beneficially own over 30% of our outstanding shares of common stock.
Although the FDA and the USDA each have issued statements and adopted policies regarding the appropriate use of the 24 Table of Contents word “natural,” there is no single, universal definition of the term “natural” for various categories we sell, which is true for many other adjectives common in the healthy or sustainable products industry.
Although the FDA and the USDA each have issued statements and adopted policies regarding the appropriate use of the word “natural,” there is no single, universal definition of the term “natural” for various categories we sell, which is true for many other adjectives common in the healthy or sustainable products industry.
Our confidentiality agreements with our employees and certain of our consultants, contract employees, suppliers and independent contractors, including some of our manufacturers who use our formulations to manufacture our products, generally require that all information made known to them be kept strictly confidential. 29 Table of Contents Nevertheless, trade secrets are difficult to protect.
Our confidentiality agreements with our employees and certain of our consultants, contract employees, suppliers and independent contractors, including some of our manufacturers who use our formulations to manufacture our products, generally require that all information made known to them be kept strictly confidential. Nevertheless, trade secrets are difficult to protect.
Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements. 30 Table of Contents We may be unable to generate sufficient cash flow to satisfy our future debt service obligations, which would adversely affect our financial condition and results of operations.
Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements. We may be unable to generate sufficient cash flow to satisfy our future debt service obligations, which would adversely affect our financial condition and results of operations.
Such climate changes may also require us to find manufacturing partners in new geographic areas if the location for best production of coconuts changes, which will require changes to our supply network and investing time and resources with new manufacturing partners, thereby potentially increasing our costs of production.
Such climate changes may also require us to find manufacturing partners in new geographic areas if the location 20 Table of Contents for best production of coconuts changes, which will require changes to our supply network and investing time and resources with new manufacturing partners, thereby potentially increasing our costs of production.
We believe that our ability to compete successfully in this market depends upon many factors both within and beyond our 17 Table of Contents control. If we fail to compete successfully in this market, our business, financial condition, results of operations and cash flows would be materially and adversely affected.
We believe that our ability to compete successfully in this market depends upon many factors both within and beyond our control. If we fail to compete successfully in this market, our business, financial condition, results of operations and cash flows would be materially and adversely affected.
Any increase in transportation costs (including 13 Table of Contents increases in fuel costs), increased shipping costs or shipping transit times, increased warehouse costs, issues with overseas shipments or port or supplier-side delays, reductions in the transportation capacity of carriers, labor strikes or shortages in the transportation industry, disruptions to the national and international transportation infrastructure, decreased warehouse availability including due to labor shortages, and unexpected delivery interruptions or delays may increase the cost of, and adversely impact, our logistics, and our ability to provide quality and timely service to our distributor or retail-direct customers.
Any increase in transportation costs (including increases in fuel costs), increased shipping costs or shipping transit times, increased warehouse costs, issues with overseas shipments or port or supplier-side delays, reductions in the transportation capacity of carriers, labor strikes or shortages in the transportation industry, disruptions to the national and international transportation infrastructure, decreased warehouse availability including due to labor shortages, and unexpected delivery interruptions or delays may increase the cost of, and adversely impact, our logistics, and our ability to provide quality and timely service to our distributors or retail-direct customers.
These laws and 25 Table of Contents regulations relate to a number of aspects of our business, including but not limited to the activities of our suppliers, distributors and other partners. Similar laws in non-U.S. jurisdictions, such as EU sanctions or the U.K.
These laws and regulations relate to a number of aspects of our business, including but not limited to the activities of our suppliers, distributors and other partners. Similar laws in non-U.S. jurisdictions, such as EU sanctions or the U.K.
There is no guarantee that these arrangements will be effective, or that disputes will not arise as to the sharing of the costs of such activity, which could impact our relationship with the distributors or impose additional costs on us.
There is no guarantee that these arrangements will be effective, or 16 Table of Contents that disputes will not arise as to the sharing of the costs of such activity, which could impact our relationship with the distributors or impose additional costs on us.
Further, if we fail to ensure the efficiency and quality of new production processes and products before they launch, we may experience uneven product quality and supply, which could negatively impact consumer acceptance of new products 18 Table of Contents and negatively impact our sales and brand reputation.
Further, if we fail to ensure the efficiency and quality of new production processes and products before they launch, we may experience uneven product quality and supply, which could negatively impact consumer acceptance of new products and negatively impact our sales and brand reputation.
We are subject to risks related to sustainability and corporate social responsibility. Our business faces increasing scrutiny related to environmental, social and governance issues, including sustainable development, product packaging, renewable resources, environmental stewardship, supply chain management, climate change, diversity and inclusion, workplace conduct, human rights, philanthropy and support for local communities.
We are subject to risks related to sustainability and corporate social responsibility. 22 Table of Contents Our business faces increasing scrutiny related to environmental, social and governance issues, including sustainable development, product packaging, renewable resources, environmental stewardship, supply chain management, climate change, diversity and inclusion, workplace conduct, human rights, philanthropy and support for local communities.
We may need to assist that manufacturing partner in purchasing and installing packaging and processing capability which may further delay and increase the financial costs of including them in our supply network and increase the financial risk of that relationship.
We may need to assist that manufacturing or co-packing partner in purchasing and installing packaging and processing capability which may further delay and increase the financial costs of including them in our supply network and increase the financial risk of that relationship.
In addition, we rely upon these parties to maintain adequate quality control, quality assurance and qualified personnel. Furthermore, there are an increasing number of state and local regulations in the United States related to, among other things, beverage packaging, labeling requirements, container deposits, recycling, or beverage taxes.
In addition, we rely upon these parties to maintain adequate quality control, quality assurance and qualified personnel. Furthermore, there are an increasing number of state and local regulations in the U.S. related to, among other things, beverage packaging, labeling requirements, container deposits, recycling, or beverage taxes.
If consumer demand for our products decreased, our business, financial condition, results of operations and cash flows may be adversely affected.
If consumer demand for our products decreases, our business, financial condition, results of operations and cash flows may be adversely affected.
Although we do not rely on our co-packing partners for the sourcing of raw materials, we face similar risks related to the operations and quality of services provided by such partners.
Although we do not rely on our co-packing partners for the sourcing of raw materials, we face similar risks related to the operations and 13 Table of Contents quality of services provided by such partners.
It is possible that customers may contest their contractual obligations to us, whether under bankruptcy laws or otherwise. 16 Table of Contents Further, we may have to negotiate significant discounts and/or extended financing terms with these customers in such a situation.
It is possible that customers may contest their contractual obligations to us, whether under bankruptcy laws or otherwise. Further, we may have to negotiate significant discounts and/or extended financing terms with these customers in such a situation.
Our products and operations are subject to state and government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements, or to respond to changes in regulations applicable to our business could adversely affect our business, financial condition, results of operations and cash flows.
Our products and operations are subject to state and government regulation and oversight both in the U.S. and abroad, and our failure to comply with applicable requirements, or to respond to changes in regulations applicable to our business could adversely affect our business, financial condition, results of operations and cash flows.
These risks include: • facing difficulties, such as legal, regulatory, personnel, technological, and consumer preference variation risks, as we operate in countries where we have limited experience or presence, or expand our operations into countries in which we have no prior operating history; • restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences; • unfavorable changes in tariffs, quotas, trade barriers or other export or import restrictions, including navigating the changing relationships between countries such as the United States and China and between the United Kingdom and the European Union; • unfavorable foreign exchange controls and variation in currency exchange rates; • exposure to foreign currency exchange rate fluctuations; • increased exposure to general international market and economic conditions and uncertainty; • political, economic, environmental, health-related or social uncertainty and volatility; • the potential for substantial penalties, litigation and reputational risk related to violations of a wide variety of laws, treaties and regulations, including food and beverage regulations, anti-corruption regulations (including, but not limited to, the U.S.
These risks include: • facing difficulties, such as legal, regulatory, personnel, technological, and consumer preference variation risks, as we operate in countries where we have limited experience or presence, or expand our operations into countries in which we have no prior operating history; 21 Table of Contents • restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences; • unfavorable changes or proposed changed in U.S. trade policies, including with respect to treaties, tariffs, quotas, trade barriers or other export or import restrictions, including navigating the changing relationships between countries such as the U.S. and China and between the U.K. and the European Union ("EU"); • unfavorable foreign exchange controls and variation in currency exchange rates; • exposure to foreign currency exchange rate fluctuations; • increased exposure to general international market and economic conditions and uncertainty; • political, economic, environmental, health-related or social uncertainty and volatility; • the potential for substantial penalties, litigation and reputational risk related to violations of a wide variety of laws, treaties and regulations, including food and beverage regulations, anti-corruption regulations (including, but not limited to, the U.S.
Such competitors may be able to use their resources and scale to respond to competitive pressures and changes in consumer preferences by introducing new products, reducing prices or increasing promotional activities, among other things.
Such competitors may be able to use their resources and scale to respond to 17 Table of Contents competitive pressures and changes in consumer preferences by introducing new products, reducing prices or increasing promotional activities, among other things.
Recently, we have experienced spoofing and social engineering incidents and have taken measures such as third-party forensic consultant reviews to ensure that no compromises of our systems have occurred and to mitigate risks of future harm.
Previously, we have experienced spoofing and social engineering incidents and since then, we have taken measures, such as third-party forensic consultant reviews, to ensure that no compromises of our systems have occurred and to mitigate risks of future harm.
For instance, recently our shipping routes and costs, have been impacted by ocean carriers avoiding the Red Sea and Gulf of Aden, due to concerns that Houthi forces based in Yemen have been attacking freighters. It is hard to predict where ocean freight rates and capacity will be in the future and what long-term rates could be.
As disclosed above, our shipping routes and costs, have been impacted by ocean carriers avoiding the Red Sea and Gulf of Aden, due to concerns that Houthi forces based in Yemen have been attacking freighters. It is hard to predict where ocean freight rates and capacity will be in the future and what long-term rates could be.
In recent years, there has been an increase in attention to and regulation of data protection and data privacy across the globe, including the FTC’s increasingly active approach to enforcing data privacy in the United States, as well as the enactment of the European Union’s General Data Protection Regulation (“GDPR”), which took effect in May 2018, the United Kingdom’s transposition of GDPR into its domestic laws , which took effect September 2021, the California Privacy Rights Act (“CPRA”), which took effect January 1, 2023 and expands the California Consumer Privacy Act (“CCPA”) of 2020, Virginia’s Consumer Data Protection Act, which also took effect January 1, 2023, and similar comprehensive privacy laws adopted in other states and jurisdictions including Colorado, Connecticut, and Utah.
In recent years, there has been an increase in attention to and regulation of data protection and data privacy across the globe, including the FTC’s increasingly active approach to enforcing data privacy in the U.S., as well as the enactment of the EU’s General Data Protection Regulation (“GDPR”), which took effect in May 2018, the U.K.’s transposition of GDPR into its domestic laws, which took effect September 2021, the California Privacy Rights Act (“CPRA”), which took effect January 1, 2023 and expands the California Consumer Privacy Act (“CCPA”) of 2020, Virginia’s Consumer Data Protection Act, which also took effect January 1, 2023, and similar comprehensive privacy laws adopted in other states and jurisdictions including Colorado, Connecticut, and Utah.
Our products and operations and those of our manufacturing and co-packing partners are subject to oversight by multiple U.S. and international regulatory agencies including the USDA, the FDA, the FTC, the Environmental Protection 23 Table of Contents Agency (“EPA”), the European Commission and the U.K.’s Food Standards Agency, Health and Safety Executive, Environment Agency, Environmental Health Officers and Trading Standards Officers and the Singapore Food Agency, among others.
Our products and operations and those of our manufacturing and co-packing partners are subject to oversight by multiple U.S. and international regulatory agencies including the USDA, the FDA, the FTC, the EPA, the European Commission and the U.K.’s Food Standards Agency, Health and Safety Executive, Environment Agency, Environmental Health Officers and Trading Standards Officers and the Singapore Food Agency, among others.
In addition, our largest distributor customer and the largest retail-direct customer together accounted for approximately 53% of our total net sales as of December 31, 2023. No other customer or distributor represented more than 10% of our total net sales as of December 31, 2023.
In addition, our largest distributor customer and the largest retail-direct customer together accounted for approximately 48% of our total net sales as of December 31, 2024. No other customer or distributor represented more than 10% of our total net sales as of December 31, 2024.
Governmental authorities, including in the European Union and the United Kingdom, continue to evaluate the privacy implications inherent in the use of third-party “cookies” and other methods of online tracking for behavioral advertising and other purposes, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tracking tools or the use of data gathered with such tools.
Governmental authorities, including in the EU and the U.K., continue to evaluate the privacy implications inherent in the use of third-party “cookies” and other methods of online tracking for behavioral advertising and other purposes, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tracking tools or the use of data gathered with such tools.
In addition, we and our third party vendors and business partners may upgrade our existing information technology systems or choose to incorporate new technology systems from time to time in order for such systems to support the increasing needs of our expanding business.
In addition, we and our third party vendors, 27 Table of Contents service providers, and business partners may upgrade our existing information technology systems or choose to incorporate new technology systems from time to time in order for such systems to support the increasing needs of our expanding business.
In the United States, for example, we are subject to the requirements of the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, packaging, testing, labeling, marketing, promotion, advertising, storage, distribution and safety of food.
In the U.S., for example, we are subject to the requirements of the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the 24 Table of Contents manufacturing, composition and ingredients, packaging, testing, labeling, marketing, promotion, advertising, storage, distribution and safety of food.
Our coconut water accounted for approximately 92% of our revenue for the year ended December 31, 2023. We believe that sales of our coconut water will continue to constitute a significant portion of our revenue, income and cash flow for the foreseeable future.
Our coconut water accounted for 96% of our revenue for the year ended December 31, 2024. We believe that sales of our coconut water will continue to constitute a significant portion of our revenue, income and cash flow for the foreseeable future.
For example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, establishes specific requirements for commercial email messages in the United States.
For example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, establishes specific requirements for commercial email messages in the U.S.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to 32 Table of Contents replace members of our board of directors.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of the Board.
As of December 31, 2023, we derived 13% of our net sales from our International segment. In addition, we source all of our coconut water internationally.
As of December 31, 2024, we derived 14% of our net sales from our International segment. In addition, we source all of our coconut water internationally.
The USDA enforces federal standards for organic production and use of the term “organic” on product labeling. These laws prohibit a company from selling or labeling products as organic unless they are produced and handled in accordance with the applicable federal law. By definition, organic products are not genetically modified or do not include genetically modified (bioengineered) ingredients.
The USDA enforces federal standards for organic production and use of the term “organic” on product labeling. These laws prohibit a company from selling or labeling products as organic unless they are produced and handled in accordance with the applicable federal law.
Our business is primarily focused on the development, manufacturing, marketing and distribution of coconut water branded and private label products and other “better-for-you” beverages.
Our business is primarily focused on developing, manufacturing, marketing and distributing coconut water branded and private label products and other “better-for-you” beverages.
While we seek to enter into strategic partnerships with retailers to capitalize on private label supply opportunities, we cannot guarantee that we will be awarded this private label business in future years or that the business will be profitable.
While we seek to enter into strategic partnerships with retailers to capitalize on private label supply opportunities, we cannot guarantee that we will be awarded this private label business in future years or that our existing supply relationships may not be downsized or cease.
Our financial performance depends in large part on their ability to arrange for the purchase of raw materials, including coconuts, coconut water and other natural ingredients, in sufficient quantities. 14 Table of Contents The coconuts from which our products are sourced, and the harvesting and transportation of them to our manufacturing partners, are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, earthquakes, hurricanes, typhoons, pestilence and other shortages and disease, as well as political events and other conditions which can adversely impact quantity and quality, leading to reduced coconut yields and quality, which in turn could reduce the available supply of, or increase the price of, our raw materials.
The coconuts from which our products are sourced, and the harvesting and transportation of them to our manufacturing partners, are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, earthquakes, hurricanes, typhoons, pestilence and other shortages and disease, as well as political events and other conditions which can adversely impact quantity and quality, leading to reduced coconut yields and quality, which in turn could reduce the available supply of, or increase the price of, our raw materials.
Our potential inability to affect a recall quickly and effectively, or manage the consumer and retailer communication in a way that mitigates concerns, might create adverse effects on our business and reputation, including large recall and disposal costs and significant loss of revenue. We believe our consumers, retailers and distributors rely on us to provide them with high-quality products.
Our potential inability to affect a recall quickly and effectively, or manage the consumer 23 Table of Contents and retailer communication in a way that mitigates concerns, might create adverse effects on our business and reputation, including large recall and disposal costs and significant loss of revenue.
We currently intend to retain any future earnings to finance the operation and expansion of our business and we do not expect to declare or pay any dividends in the foreseeable future.
Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases. We currently intend to retain any future earnings to finance the operation and expansion of our business and we do not expect to declare or pay any dividends in the foreseeable future.
For example, a failure to incorporate new technology, like artificial intelligence (“AI”), or marketing practices may reduce our ability to compete and operate efficiently. Our competitors also may create or obtain similar formulations first that may hinder our ability to develop new products or enter new categories, which could have a material adverse effect on our growth.
Our competitors also may create or obtain similar formulations first that may hinder our ability to develop new products or enter new categories, which could have a material adverse effect on our growth.
In addition, any such departure could be viewed in a negative light by investors and analysts, which may cause the price of our common stock to decline.
In addition, any such departure could be viewed in a negative light by investors and analysts, which may cause the price of our common stock to decline. We do not currently carry key-person life insurance for our co-founder or senior executives.
In May 2020, we entered into a five-year credit facility ("2020 Credit Facility") with Wells Fargo Bank, National Association consisting of a revolving line of credit, which currently provides for committed borrowings of $60 million. As of December 31, 2023, we have no outstanding debt under our 2020 Credit Facility.
In May 2020, we entered into a five-year credit facility ("2020 Credit Facility") with Wells Fargo Bank, National Association, which we amended and extended for five years on February 14, 2025, consisting of a revolving line of credit, which currently provides for committed borrowings of $60 million.
We are dependent on distributor and retail customers for most of our sales, and our failure to maintain these relationships or further develop our sales channels could harm our business, financial condition, results of operations and cash flows. 15 Table of Contents We derive a significant portion of our revenue from our network of domestic and international distributors and retail customers (whether serviced directly or through distributors), including club stores, major mass merchandisers, online marketplaces such as Amazon, drug store chains, supermarkets, independent pharmacies, health food stores, and other retailers.
We derive a significant portion of our revenue from our network of domestic and international distributors and retail customers (whether serviced directly or through distributors), including club stores, major mass merchandisers, online marketplaces such as Amazon, drug store chains, supermarkets, independent pharmacies, health food stores, and other retailers.
Our brands and Company image is based on perceptions of subjective qualities, and any incident that erodes the loyalty of our consumers, customers, suppliers or manufacturers, including adverse publicity or a governmental investigation or litigation, could significantly reduce the value of our brands and significantly damage our business, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our brands and Company image are based on perceptions of subjective qualities, and any incident that erodes the loyalty of our consumers, customers, suppliers or manufacturers, including adverse publicity or a governmental investigation or litigation, could significantly reduce the value of our brands and damage our business, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. 18 Table of Contents Failure to introduce new products or successfully improve existing products or adopt new technology or marketing practices effectively, may adversely affect our ability to continue to grow and may cause us to lose market share and sales.
We do not currently carry key-person life insurance for our co-founder or senior executives. 20 Table of Contents Additionally, our success depends on our ability to attract, train and retain a diverse workforce who understand and appreciate our culture and can represent our brand effectively and establish credibility with our business partners and consumers.
Additionally, our success depends on our ability to attract, train and retain a diverse workforce who understand and appreciate our culture and can represent our brand effectively and establish credibility with our business partners and consumers.
Additionally, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot assure ensure that our insurance will be adequate to cover costs and liabilities related to an incident.
Moreover, we or our third-party vendors or business partners may be more vulnerable to such attacks in remote work environments, which have increased in recent years. Additionally, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot ensure that our insurance will be adequate to cover costs and liabilities related to an incident.
We also rely on proprietary expertise, recipes and formulations and other trade secrets and copyright protection to develop and maintain our competitive position.
There is no guarantee that these coexistence settlement agreements will foreclose future trademark disputes. We also rely on proprietary expertise, recipes and formulations and other trade secrets and copyright protection to develop and maintain our competitive position.
We use suppliers and manufacturing partners who can certify that they meet the standards needed for each applicable product or ingredient specification.
By definition, organic products are not genetically modified or do not include 25 Table of Contents genetically modified (bioengineered) ingredients. We use suppliers and manufacturing partners who can certify that they meet the standards needed for each applicable product or ingredient specification.
Furthermore, given our supply chain is dependent on ocean freight for shipping coconut water from the source countries to the end use markets, we are particularly exposed to ocean freight cost changes, and availability of containers, and to changes or disruptions in global trade.
Furthermore, given our supply chain is dependent on ocean freight for shipping coconut water from the source countries to the end use markets, we are particularly exposed to ocean freight cost changes, availability of containers and to changes or disruptions in global trade. 19 Table of Contents We could suffer product inventory losses or markdowns and lost revenue in the event of the loss or shutdown of a major manufacturing partner, a local raw materials supplier of a manufacturing partner, or a co-packing partner, due to pandemic conditions in their respective locales.
In addition to purchasing coconut materials and other ingredients, we negotiate the terms and specifications for the purchase of significant quantities of packaging materials and pallets by our manufacturers and co-packing partners from third parties. The majority of our products are produced and packaged with materials sourced from a single supplier, Tetra Pak.
We are dependent on our existing suppliers for materials used to package our products, the costs of which may be volatile and may rise significantly. 15 Table of Contents In addition to purchasing coconut materials and other ingredients, we negotiate the terms and specifications for the purchase of significant quantities of packaging materials and pallets by our manufacturers and co-packing partners from third parties.
However, at the request of this customer, we expect to continue the supply relationship through 2024 for a significant portion of their private label coconut water needs.
While we continued the supply relationship for a significant portion of their private label coconut water needs in 2024 at the customer's request, we are expecting in 2025 the loss of further regions that we serviced for this customer in 2024.
Our ability to make principal and interest payments on and to refinance any indebtedness we incur in the future will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.
This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.
Any of these factors could impact our ability to supply our products to customers and consumers and may adversely affect our business, financial condition, results of operations and cash flows. We are dependent on our existing suppliers for materials used to package our products, the costs of which may be volatile and may rise significantly.
Any of these factors could impact our ability to supply our products to customers and consumers and may adversely affect our business, financial condition, results of operations and cash flows. The success of our financial performance is closely tied to our Americas operating segment.
Over the long term, if we are unable to successfully register our trademarks and trade names and establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.
Over the long term, if we are unable to successfully register our trademarks and trade names and establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. 30 Table of Contents In order to resolve certain trademark disputes, we have entered into coexistence or settlement agreements that permit other parties certain uses of marks similar to ours for certain categories and countries, and restrict the use of our marks in certain categories and countries.
Our manufacturing partners may have general difficulties in obtaining raw materials, particularly coconut derived products, due to our high quality standards. Our current manufacturing partners operate in the Philippines, Sri Lanka, Malaysia, Thailand, Brazil and Vietnam and source coconuts from owned trees and networks of many independent small farmers.
Our current manufacturing partners operate in the Philippines, Sri Lanka, Malaysia, Thailand, Brazil, Vietnam, and Indonesia, and source coconuts from owned trees and networks of many independent small farmers, while some of our co-packers operate in Canada, Mexico, the U.S., and the U.K. and source co-packing materials from these regions.
We anticipate that federal, state and international regulators will continue to enact new legislation related to privacy and cybersecurity.
If a federal privacy law passed, it would likely supersede the new state privacy laws and establish uniform privacy protections across the country. 29 Table of Contents We anticipate that federal, state and international regulators will continue to enact new legislation related to privacy, cybersecurity and the use of personal information within AI technologies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSignificant findings related to cybersecurity, data and technology risks or incidents are regularly reported to and discussed at the Board level. Three members of our Board, included two of our Audit Committee members, are currently pursuing or have received certifications in cyber-risk oversight through the National Association of Corporate Directors.
Biggest changeSignificant findings related to cybersecurity, data and technology risks or incidents are regularly reported to and discussed at the Board level. Three members of our Board, two of which are Audit Committee members, have received certifications in cyber-risk oversight through the National Association of Corporate Directors.
Management, in coordination with our information technology department, is responsible for assessing the risk of cybersecurity threats and hiring appropriate personnel and third-party consultants to oversee the cybersecurity program. Specifically, these processes are overseen by our multidisciplinary Technology Risk and Information Security Committee, which consists of leaders from our Information Technology, Operations, Internal Audit and Legal teams.
Management, in coordination with our information technology department, is responsible for assessing the risk of cybersecurity threats and hiring appropriate personnel and third-party consultants to oversee the cybersecurity program. Specifically, these processes are overseen by our multidisciplinary Technology Risk and Information Security Committee, which consists of leaders from our Information Technology, Operations, Finance, Internal Audit and Legal teams.
For more information, see "Risk Factors —Risks Related to Our Information Technology and Intellectual Property" in Part I, Item IA of this Annual Report on Form 10-K. Cybersecurity Governance Risk assessment and oversight are an integral part of our governance and management processes. Our Board of Directors (the "Board") has ultimate oversight of the Company's risk management.
For more information, see "Risk Factors —Risks Related to Our Information Technology and Intellectual Property" in Part I, Item IA of this Annual Report on Form 10-K. Cybersecurity Governance Risk assessment and oversight are an integral part of our governance and management processes. The Board has ultimate oversight of the Company's risk management.
Based on the information available as of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are 36 Table of Contents reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Based on the information available as of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are 38 Table of Contents reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
An internal team, led by our Chief Operating Officer, oversees and works collaboratively with this third party vendor to evaluate the strength of our cybersecurity protocols and the results of testing to determine what additional actions, such as trainings or remedial actions, are necessary to lessen cybersecurity risks.
An internal team, led by our Vice President of Information Technology, oversees and works collaboratively with this third party vendor to evaluate the strength of our cybersecurity protocols and the results of testing to determine what additional actions, such as trainings or remedial actions, are necessary to lessen cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2023, we leased office facilities totaling approximately 29,400 square feet in the United States, Singapore and London, with the Singapore and London facilities primarily supporting our International segment.
Biggest changeAs of December 31, 2024 , we occupied office facilities totaling approximately 29,400 square feet in the U.S., Singapore, and London, with the Singapore and London facilities primarily supporting our International segment and global supply chain.
Item 2. Properties. Our corporate headquarters is located in Manhattan, New York, at 250 Park Avenue South, where we lease office space, which provides support to both our Americas and International segments.
Item 2. Properties. Our corporate headquarters is currently located in Manhattan, New York, at 250 Park Avenue South, where we lease office space that provides support to both our Americas and International segments.
Removed
We believe that our corporate headquarters and other offices are adequate for our immediate needs and that we will be able to obtain additional or substitute space, as needed, on commercially reasonable terms.
Added
In August 2024, we entered into a lease agreement, effective January 1, 2025, to relocate our New York corporate headquarters within Manhattan, and will enter the new premises later in 2025. We have also leased a new space in London and will relocate this office later in 2025.
Added
W e believe that these new office spaces will be adequate to support our requirements in New York and London..

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNot Applicable. 37 Table of Contents PART II
Biggest changeNot Applicable. 39 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShares of Common Stock may be repurchased under the Program from time to time through open market purchases, block trades, private transactions or accelerated or other structured share repurchase programs. To the extent not retired, shares of Common Stock repurchased under the Program will be placed in the Company's treasury shares.
Biggest changeOn October 30, 2023, the Company's Board approved a share repurchase program ("Program") authorizing the Company to repurchase up to $40 million of common stock. Shares of common stock may be repurchased under the Program from time to time through open market purchases, block trades, private transactions or accelerated or other structured share repurchase programs.
Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant.
Any future determination related to our dividend policy will be made at the discretion of our Board after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the Board deems relevant.
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser The Company did not sell any equity securities during the three months and year ended December 31, 2023 that were not registered under the Securities Act.
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser The Company did not sell any equity securities during the three months and year ended December 31, 2024 that were not registered under the Securities Act.
The comparisons reflected in the graph are not intended to forecast the future performance of our stock and may not be indicative of our future performance. Item 6. [Reserved]
The comparisons reflected in the graph are not intended to forecast the future performance of our stock and may not be indicative of our future performance. 40 Table of Contents Item 6. [Reserved]
The graph assumes that $100 was invested on October 22, 2021 in our common stock, the Russell 2000 1 38 Table of Contents Index, the NASDAQ Composite Index, and the NASDAQ US Smart Food & Beverage Index, and that any dividends were reinvested.
The graph assumes that $100 was invested on October 22, 2021 in our common stock, the Russell 2000 Index, the NASDAQ Composite Index, and the NASDAQ US Smart Food & Beverage Index, and that any dividends were reinvested.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our stock currently trades on The Nasdaq Stock Market LLC under the ticker symbol "COCO". Holders As of February 26, 2024, there were 40 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our stock currently trades on The Nasdaq Stock Market LLC under the ticker symbol "COCO". Holders As of February 24, 2025, there were 33 holders of record of our common stock.
Performance Graph The following graph illustrates the total return from October 22, 2021 through December 29, 2023, for (i) our common stock, (ii) the Russell 2000 Index, (iii) the NASDAQ Composite Index, and (iv) the NASDAQ US Smart Food & Beverage Index.
Approximately $27.2 million remained available for future purchases under the Program as of December 31, 2024. Performance Graph The following graph illustrates the total return from October 22, 2021 through December 31, 2024, for (i) our common stock, (ii) the Russell 2000 Index, (iii) the NASDAQ Composite Index, and (iv) the NASDAQ US Smart Food & Beverage Index.
The extent to which the Company repurchases shares of Common Stock, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by the Company. The Program has no time limits, and may be suspended or discontinued at any time.
To the extent not retired, shares of common stock repurchased under the Program will be placed in the Company's treasury shares. The extent to which the Company repurchases shares of common stock, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by the Company.
During the year ended December 31, 2023, the Company repurchased 30,000 shares at a cost of $0.8 million under this program.
The Program has no time limits, and may be suspended or discontinued at any time. During the years ended December 31, 2024 and 2023, the Company repurchased 504,246 shares at a cost of $12.0 million, and 30,000 shares at a cost of $0.8 million under the Program, respectively.
Removed
The following table provides information regarding repurchases of our common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May be Purchased Under the Plans or Programs (In millions) October 1, 2023 - October 31, 2023 — $— — $— November 1, 2023 - November 30, 2023 — $— — $— December 1, 2023 - December 31, 2023 30,000 $25.78 30,000 $39.2 ( 1 ) On October 30, 2023, the Company's Board of Directors approved a share repurchase program ("Program") authorizing the Company to repurchase up to $40 million of Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022, respectively: Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Net sales $ 493,612 $ 427,787 $ 65,825 15.4 % Cost of goods sold 312,883 324,426 (11,543) (3.6 %) Gross profit 180,729 103,361 77,368 74.9 % Operating expenses Selling, general and administrative 124,236 100,306 23,930 23.9 % Total operating expenses 124,236 100,306 23,930 23.9 % Income from operations 56,493 3,055 53,438 n/m Other income (expense) Unrealized gain (loss) on derivative instrument (872) 6,606 (7,478) (113.2 %) Foreign currency gain (loss) (251) 1,387 (1,638) (118.1 %) Interest income 2,581 51 2,530 n/m Interest expense (31) (258) 227 (88.0 %) Total other (expense) 1,427 7,786 (6,359) (81.7 %) Income before income taxes 57,920 10,841 47,079 434.3 % Provision for income taxes (11,291) (3,027) (8,264) 273.0 % Net income $ 46,629 $ 7,814 $ 38,815 496.7 % n/m—represents percentage calculated not being meaningful Net Sales The following table provides a comparative summary of the Company’s net sales by operating segment and product category: 43 Table of Contents Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Americas segment Vita Coco Coconut Water $ 317,221 $ 275,964 $ 41,257 15.0 % Private Label 103,166 88,173 14,993 17.0 % Other 9,858 9,485 373 3.9 % Subtotal $ 430,245 $ 373,622 $ 56,623 15.2 % International segment Vita Coco Coconut Water $ 41,829 $ 38,570 $ 3,259 8.4 % Private Label 18,713 12,855 5,858 45.6 % Other 2,825 2,740 85 3.1 % Subtotal $ 63,367 $ 54,165 $ 9,202 17.0 % Total net sales $ 493,612 $ 427,787 $ 65,825 15.4 % The primary driver of the consolidated net sales increase of 15.4% was increased case equivalents ("CE") volume growth of 13.4%.
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023, respectively: Year Ended December 31, Change 2024 2023 Amount Percentage (in thousands) (in thousands) Net sales $ 516,013 $ 493,612 $ 22,401 4.5 % Cost of goods sold 317,230 312,883 4,347 1.4 % Gross profit 198,783 180,729 18,054 10.0 % Operating expenses: Selling, general and administrative 124,963 124,236 727 0.6 % Total operating expenses 124,963 124,236 727 0.6 % Income from operations 73,820 56,493 17,327 30.7 % Other income (expense): Unrealized gain (loss) on derivative instrument (8,176) (872) (7,304) n/m Foreign currency gain (loss) (1,571) (251) (1,320) n/m Interest income 6,715 2,581 4,134 160.2 % Interest expense — (31) 31 n/m Total other income (expense) (3,032) 1,427 (4,459) n/m Income before income taxes 70,788 57,920 12,868 22.2 % Provision for income taxes 14,836 11,291 3,545 31.4 % Net income $ 55,952 $ 46,629 $ 9,323 20.0 % n/m—represents percentage calculated not being meaningful Net Sales The following table provides a comparative summary of the Company’s net sales by operating segment and product category: 45 Table of Contents Year Ended December 31, Change 2024 2023 Amount Percentage (in thousands) (in thousands) Americas segment Vita Coco Coconut Water $ 343,288 $ 317,221 $ 26,067 8.2 % Private Label 89,900 103,166 (13,266) (12.9) % Other 9,155 9,858 (703) (7.1) % Subtotal $ 442,343 $ 430,245 $ 12,098 2.8 % International segment Vita Coco Coconut Water $ 50,318 $ 41,829 $ 8,489 20.3 % Private Label 19,324 18,713 611 3.3 % Other 4,028 2,825 1,203 42.6 % Subtotal $ 73,670 $ 63,367 $ 10,303 16.3 % Total net sales $ 516,013 $ 493,612 $ 22,401 4.5 % The increase in net sales was driven by higher coconut water CE volumes across both the Americas and International segments, including Vita Coco Coconut Water volume growth of 5.8% and improved Vita Coco Coconut Water pricing due to reduced retailer promotional activity, partially offset by the transition of private label oil business.
Our other brands include Ever & Ever , a sustainably packaged water, and PWR LIFT , a protein-infused fitness drink. We also offered Runa , a plant-based energy drink inspired by the guayusa plant native to Ecuador, which we ceased selling in December 2023.
Our other brands include Ever & Ever , a sustainably packaged water, and PWR LIFT , a protein-infused fitness drink. We also previously offered Runa , a plant-based energy drink inspired by the guayusa plant native to Ecuador, which we ceased selling in December 2023.
Key Factors Affecting Our Performance We believe that the growth of our business and our future success are dependent upon many factors, including the key trends and uncertainties highlighted below: Risks Associated with our Supply Chain and Shipping Our global asset lite supply chain model has been an integral part of our ability to efficiently scale our business and compete in the marketplace, and to support our private label business.
Key Factors Affecting Our Performance We believe that the growth of our business and our future success are dependent upon many factors, including the key trends and uncertainties highlighted below: Risks Associated with our Supply Chain and Shipping Our global asset-light supply chain model has been an integral part of our ability to efficiently scale our business and compete in the marketplace, and to support our private label business.
Discussions of the periods prior to the year ended December 31, 2022 that are not included in this Annual Report on Form 10-K are found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 and the discussion therein for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Discussions of the periods prior to the year ended December 31, 2023 that are not included in this Annual Report on Form 10-K are found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 and the discussion therein for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Our asset-lite operating model has historically provided us with a low cost nimble, and scalable supply chain, which allows us to adapt to changes in the market or consumer preferences while also efficiently introducing new products across our platform.
Our asset-light operating model has historically provided us with a low cost nimble, and scalable supply chain, which allows us to adapt to changes in the market or consumer preferences while also efficiently introducing new products across our platform.
Since there is no alternative use for these products and the Company has the right to payment for performance completed to date, the Company recognizes the revenue for 42 Table of Contents the production of these private label products over time as the production for open purchase orders occurs, which may be prior to any shipment. • Other— This product category consists of all other products, which includes Runa (until we ceased selling it in December 2023) , Ever & Ever and PWR LIFT product offerings, Vita Coco product extensions beyond coconut water, coconut milk products, and other revenue transactions (e.g., bulk product sales).
Since there is no alternative use for these products and the Company has the right to payment for performance completed to date, the Company recognizes the revenue for the production of these private label products over time as the production for open purchase orders occurs, which may be prior to any shipment. • Other— This product category consists of all other products, which included Runa (until we ceased selling it in December 2023) , and includes Ever & Ever and PWR LIFT product offerings, Vita Coco product extensions beyond coconut water, coconut milk products, and other revenue transactions (e.g., bulk product sales).
As of December 31, 2023, we also have inventory purchase commitments, which include any raw material or packaging commitments with our suppliers to secure our needs for future orders, which are generally due to be paid within one year.
As of December 31, 2024, we also have inventory purchase commitments, which include any raw material or packaging commitments with our suppliers to secure our needs for future orders, which are generally due to be paid within one year.
We also have production purchase commitments from our manufacturers based on our production plans, forecasts and contracts, that might result in costs if we were to reduce our purchases significantly in 2024 or for some relationships, in future years.
We also have production purchase commitments from our manufacturers based on our production plans, forecasts and contracts, that might result in costs if we were to reduce our purchases significantly in 2025 or for some relationships, in future years.
The Company will recognize an impairment for the amount by which the carrying amount exceeds a reporting unit’s fair value. For the years ended December 31, 2023 and 2022, there were no impairments recorded.
The Company will recognize an impairment for the amount by which the carrying amount exceeds a reporting unit’s fair value. For the years ended December 31, 2024 and 2023, there were no impairments recorded.
This asset-lite model allows us to effectively manage total delivery costs and afford greater ability to shift volume between our suppliers to optimize our supply chain, and better manage our supply levels.
This asset-light model allows us to effectively manage total delivery costs and afford greater ability to shift volume between our suppliers to optimize our supply chain, and better manage our supply levels.
We expect that our gross margin will fluctuate from period to period depending on the interplay of these variables. Management believes gross margin provides investors with useful information related to the profitability of our business prior to considering all of the operating costs incurred.
We expect that our gross margin will fluctuate from period to period depending on the interplay of these variables. 43 Table of Contents Management believes gross margin provides investors with useful information related to the profitability of our business prior to considering all of the operating costs incurred.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements elsewhere within this Annual Report on Form 10-K. 52 Table of Contents
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements elsewhere within this Annual Report on Form 10-K.
This section of this Annual Report on Form 10-K generally discusses the years ended December 31, 2023 and 2022 and year-over-year comparisons between the years ended December 31, 2023 and 2022.
This section of this Annual Report on Form 10-K generally discusses the years ended December 31, 2024 and 2023 and year-over-year comparisons between the years ended December 31, 2024 and 2023.
Ability to Generate Growth Through Product Innovation 40 Table of Contents The beverage industry is subject to shifting consumer preferences which present opportunities for new beverage occasions, tastes and functional benefits. Our future success is therefore partially dependent on our ability to identify these trends and develop products and brands that effectively meet those needs.
Ability to Generate Growth Through Product Innovation The beverage industry is subject to shifting consumer preferences which present opportunities for new beverage occasions, tastes and functional benefits. Our future success is therefore partially dependent on our ability to identify these trends and develop products and brands that effectively meet those needs.
Any material negative change to consumer demand for our products or coconut water generally, or failure to grow the coconut water category, could adversely affect our business. Consumer demand between branded products and private label may vary over time.
Any material negative change to consumer demand for our products or coconut water generally, failure to grow the coconut water category, or loss of significant private label demand, could adversely affect our business. Consumer demand between branded products and private label may vary over time.
We are one of the largest brands globally in the coconut and other plant waters category, and a large supplier of private label coconut water. Our branded portfolio is led by our Vita Coco brand, which is the leader in the coconut water category in the United States, and also includes coconut oil, juice, and milk offerings.
We are one of the largest brands globally in the coconut and other plant waters category, and a large supplier of private label coconut water. Our branded portfolio is led by our Vita Coco brand, which is the leader in the coconut water category in the U.S., and also includes coconut oil, juice, and milk offerings.
These non-GAAP measures are key metrics used by management and our board of directors, to assess our financial performance.
These non-GAAP measures are key metrics used by management and our Board, to assess our financial performance.
Income Tax Expense We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions in which we operate. We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates.
Income Tax Expense We are subject to federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates.
Except as otherwise noted, all references to 2023 refer to the year ended December 31, 2023, all references to 2022 refer to the year ended December 31, 2022 and all references to 2021, refer to the year ended December 31, 2021.
Except as otherwise noted, all references to 2024 refer to the year ended December 31, 2024, all references to 2023 refer to the year ended December 31, 2023 and all references to 2022, refer to the year ended December 31, 2022.
Marketing and promotional expenses consist primarily of costs incurred promoting 41 Table of Contents and marketing our products and are primarily driven by investments to grow our business and retain customers.
Marketing and promotional expenses consist primarily of costs incurred promoting and marketing our products and are primarily driven by investments to grow our business and retain customers.
Consumer Demand and Relationships with Key Customers Coconut water accounted for approximately 92% of our revenue for the year ended December 31, 2023 and we believe that sales of coconut water will continue to be a significant portion of our business in the foreseeable future.
Consumer Demand and Relationships with Key Customers Coconut water accounted for 96% of our revenue for the year ended December 31, 2024 and we believe that sales of coconut water will continue to be a significant portion of our business in the foreseeable future.
Income Taxes The Company accounts for income taxes under Accounting Standards Codification 740, Income Taxes ("ASC 740"), which requires an asset and liability approach to financial accounting and reporting for income taxes.
Income Taxes The Company accounts for income taxes under ASC Topic 740, Income Taxes ("ASC 740"), which requires an asset and liability approach to financial accounting and reporting for income taxes.
As a result, beginning with this Annual Report on Form 10-K for the year ending December 31, 2023, the Company will not be able to rely on the extended transition period noted above and will be required to adopt all new accounting pronouncements within the same time periods as public companies.
As a result, beginning with the Annual Report on Form 10-K for the year ended December 31, 2023, the Company was not able to rely on the extended transition period noted above and was required to adopt all new accounting pronouncements within the same time periods as public companies.
Contractual Obligations and Commitments We have contractual obligations to repay indebtedness and required interest payments and unused commitment fees under our Revolving Facility and vehicle loans. As of December 31, 2023, we had no outstanding balance on the Revolving Facility. Any future outstanding balances on the Revolving Facility will be required to be repaid by May 2026.
Contractual Obligations and Commitments We have contractual obligations to repay indebtedness and required interest payments and unused commitment fees under our Revolving Facility and vehicle loans. As of December 31, 2024, we had no outstanding balance on the Revolving Facility. Any future outstanding balances on the Revolving Facility will be required to be repaid by February 2030.
We supply private label products to key retailers in both the coconut water and coconut oil categories. Additionally, we generate revenue from bulk product sales to beverage and food companies. 39 Table of Contents We source our coconut water from a diversified global network of 14 factories across six countries supported by thousands of coconut farmers.
We supply private label products to key retailers in both the coconut water and coconut oil categories. Additionally, we generate revenue from bulk product sales to beverage and food companies. We source our coconut water from a diversified global network of 17 factories across seven countries supported by thousands of coconut farmers.
We lease certain assets under noncancelable operating leases, which expire through 2025. The leases relate primarily to office space in addition to machinery and equipment. Future minimum commitments under these leases are $1.7 million as of December 31, 2023.
We lease certain assets under noncancelable operating leases, which expire through 2025. The leases relate primarily to office space in addition to machinery and equipment. Future minimum commitments under these leases are $0.4 million as of December 31, 2024.
Overview The Vita Coco Company is a leading platform for brands in the functional beverage category. We pioneered packaged coconut water in 2004 and have extended our business into other categories. Our mission is to deliver great tasting, natural and nutritious products that we believe are better for consumers and better for the world.
Overview The Vita Coco Company pioneered packaged coconut water in 2004 and we have extended our business into other categories. Our mission is to deliver great tasting, natural and nutritious products that we believe are better for consumers and better for the world.
Our DSD network is an important asset in executing physical retail programs and ensuring product availability and visibility in the United States. In 2023, we offered more multi-packs in coconut water in US retail to increase consumption with core consumers, and increased distribution of our other product offerings.
Our DSD network is an important asset in executing physical retail programs and ensuring product availability and visibility in the U.S. In 2024, we offered more multi-packs in coconut water in U.S. retail to increase consumption with core consumers, and increased distribution of our other product offerings.
During the year ended December 31, 2022, we recorded an unrealized gain of $6.6 million relating to outstanding derivative instruments for forward foreign currency exchange contracts. All forward foreign currency exchange contracts were entered to hedge some of our exposures to the British pound, Canadian dollar, Brazilian real, Malaysian ringgit, European Union euro, and Thai baht.
During the year ended December 31, 2023, we recorded an unrealized loss of $0.9 million relating to outstanding derivative instruments for forward foreign currency exchange contracts. All forward foreign currency exchange contracts were entered to hedge some of our exposures to the British pound, Canadian dollar, Brazilian real, Malaysian ringgit, Euro, and Thai baht.
The LIBOR-based loans bore interest at LIBOR plus the Spread. The unused commitment fee prior to the December 2022 amendment was the same. The outstanding balance on the Revolving Facility was zero as of December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023, we were compliant with all financial covenants.
The LIBOR-based loans bore interest at LIBOR plus the Spread. The unused commitment fee prior to the December 2022 amendment was the same. There were no amounts drawn on the Revolving Facility as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, we were compliant with all financial covenants.
We must make assumptions and judgments to estimate the amount of valuation allowances to be recorded against our deferred tax assets, which take into account current tax laws and estimates of the amount of future taxable income, if any.
We must make assumptions and judgments to estimate the amount of valuation allowances to be recorded against our deferred tax assets, which take into account current tax laws and estimates of the amount of future taxable income, if any. Changes to any of the assumptions or judgments could cause our actual income tax obligations to differ from our estimates.
Vita Coco Coconut Water net sales increased by $41.3 million, or 15.0%, to $317.2 million for the year ended December 31, 2023, from $276 million for the year ended December 31, 2022. The increase was primarily driven by a combination of increased CE volume growth and benefits from pricing actions.
Vita Coco Coconut Water net sales increased by $26.1 million, or 8.2%, to $343.3 million for the year ended December 31, 2024, from $317.2 million for the year ended December 31, 2023. The increase was primarily driven by a combination of increased CE volume growth and benefits from pricing actions.
In addition, the Company is currently subject to an unused commitment fee ranging from 0.10% and 0.20% on the unused amount of the line of credit, with the rate being based on the Company’s leverage ratio (as defined in the credit agreement).
In addition, the Company was subject to an unused commitment fee ranging from 0.10% and 0.20% on the unused amount of the line of credit in the year ended December 31, 2024, with the rate based on the Company’s leverage ratio (as defined in the credit agreement).
The coconut water category has been growing steadily in recent years and our Vita Coco brand has successfully gained over 50% market share in the US and over 80% market share in the UK in this category. We are also a significant supplier of private label coconut water and coconut oil products in the US and in Europe.
The coconut water category has been growing steadily in recent years and our Vita Coco brand has successfully retained over 40% market share in the U.S. and over 82% market share in the U.K. in this category. We are also a significant supplier of private label coconut water and coconut oil products in the U.S. and Europe.
The borrowings made before December 2022 bore interest at rates based on either: 1) London Interbank Offered Rate ("LIBOR"); or 2) a specified base rate (determined by reference to the greatest of the prime rate published by Wells 49 Table of Contents Fargo, the federal funds effective rate plus 1.5% and one-month LIBOR plus 1.50%), as selected periodically by the Company.
Beginning on February 14, 2025, the unused commitment fees will range from 0.125% to 0.225%. 51 Table of Contents The borrowings made prior to December 2022 bore interest at rates based on either: 1) London Interbank Offered Rate ("LIBOR"); or 2) a specified base rate (determined by reference to the greatest of the prime rate published by Wells Fargo, the federal funds effective rate plus 1.5% and one-month LIBOR plus 1.50%), as selected periodically by the Company.
Our primary use of cash in operating activities are for cost of goods sold and SG&A expenses. During the year ended December 31, 2023, cash from operating activities increased $118 million as compared to the year ended December 31, 2022.
Our primary use of cash in operating activities are for cost of goods sold and SG&A expenses. During the year ended December 31, 2024, cash provided by operating activities decreased $64.3 million as compared to the year ended December 31, 2023.
Our actual results may differ from these estimates under different assumptions or conditions. 50 Table of Contents While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing within this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing within this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
The increase was driven by CE volume growth of 11.7%, with notable growth in the Europe, the Middle East and Africa ("EMEA") region, in addition to benefits from net pricing actions.
The increased sales were driven by CE volume growth of 12.8%, with notable growth in the Europe, the Middle East and Africa ("EMEA") region, in addition to benefits from net pricing actions.
The shares were sold in an underwritten public offering, which closed on May 26, 2023 and a block trade that was executed on November 9, 2023. The Company did not receive any proceeds from the sale of the shares. (d) Non-cash intangible asset impairment charge related to the Runa trademarks and distributor relationships.
The shares were sold in an underwritten public offering, which closed on May 26, 2023 and a block trade that was executed on November 9, 2023. The Company did not receive any proceeds from the sale of the shares.
Based on the closing share price and the market value of the Company's Common Stock, par value $0.01 per share ("Common Stock"), held by non-affiliates as of June 30, 2023, the Company was deemed a large accelerated public company filer as of December 31, 2023.
Following the IPO, as an emerging growth company, we elected to apply the extended transition period. Based on the closing share price and the market value of our common stock, par value $0.01 per share, held by non-affiliates as of June 30, 2023, the Company was deemed a large accelerated public company filer as of December 31, 2023.
We maintain in-house research and development capabilities as well as strong third-party relationships with flavor development houses, and we monitor the latest advancements to support continued innovation and learning.
In 2025, we intend to expand distribution of Vita Coco Treats to select retailers nationwide. We maintain in-house research and development capabilities as well as strong third-party relationships with flavor development houses, and we monitor the latest advancements to support continued innovation and learning.
Net Sales for Other products increased by $0.1 million, or 3.1%, to $2.8 million for the year ended December 31, 2023, from $2.7 million for the year ended December 31, 2022, driven primarily by CE volume growth in the EMEA region.
Net Sales for Other products increased by $1.2 million, or 42.6%, to $4.0 million for the year ended December 31, 2024, from $2.8 million for the year ended December 31, 2023, driven primarily by CE volume growth in both EMEA and APAC regions.
We had $132.5 million and $19.6 million of cash and cash equivalents as of December 31, 2023 and 2022, respectively.
We had $164.7 million and $132.5 million of cash and cash equivalents as of December 31, 2024 and 2023, respectively.
In order to meet this consumer demand for our products, we also are subject to the risk of overly relying upon our largest customers for both our branded and private label business. In 2023, we announced changes to our supply relationship with a significant private label customer with the expected loss of a significant private label coconut oil business.
In order to meet this consumer demand for our products, we also are subject to the risk of overly relying upon our largest customers for both our branded and private label business.
Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606").
Revenue Recognition 52 Table of Contents The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606").
A reconciliation from net income to EBITDA and Adjusted EBITDA is set forth below: 47 Table of Contents Year Ended December 31, 2023 2022 (in thousands) Net income $ 46,629 $ 7,814 Depreciation and amortization 660 1,901 Interest income (2,581) (51) Interest expense 31 258 Income tax expense 11,291 3,027 EBITDA 56,030 12,949 Stock-based compensation (a) 9,128 7,384 Unrealized (gain)/loss on derivative instruments (b) 872 (6,606) Foreign currency (gain)/loss (b) 251 (1,387) Secondary Offering Costs (c) 1,525 — Impairment of intangible assets (d) — 6,714 Other adjustments (e) $ 363 $ 1,240 Adjusted EBITDA $ 68,169 $ 20,294 (a) Non-cash charges related to stock-based compensation, which vary from period to period depending on volume and vesting timing of awards and forfeitures.
A reconciliation from net income to EBITDA and Adjusted EBITDA is set forth below: 49 Table of Contents Year Ended December 31, 2024 2023 (in thousands) Net income $ 55,952 $ 46,629 Depreciation and amortization 745 660 Interest income (6,715) (2,581) Interest expense — 31 Income tax expense 14,836 11,291 EBITDA 64,818 56,030 Stock-based compensation (a) 8,922 9,128 Unrealized (gain)/loss on derivative instruments (b) 8,176 872 Foreign currency (gain)/loss (b) 1,571 251 Secondary offering costs (c) (324) 1,525 Other adjustments (d) $ 964 $ 363 Adjusted EBITDA $ 84,127 $ 68,169 (a) Non-cash charges related to stock-based compensation, which vary from period to period depending on volume and vesting timing of awards and forfeitures.
Goodwill is not amortized; instead goodwill is tested for impairment on an annual basis on December 31, or more frequently if the Company believes indicators of impairment exist.
Goodwill is not amortized; instead goodwill is tested for impairment on an annual basis on December 31, or more frequently if the Company believes indicators of impairment exist. 53 Table of Contents The Company has determined that there are three reporting units for purposes of testing goodwill for impairment.
Our products are also available in a variety of on-premise locations such as corporate offices, fitness clubs, airports, and educational institutions.
Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce, and foodservice channels. Our products are also available in a variety of on-premise locations such as corporate offices, fitness clubs, airports, and educational institutions.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this 10-K filing. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
As we do not own any of these factories, our supply chain is a fixed asset-lite model designed to better react to changes in the market or consumer preferences. We also work with co-packers in America and Europe to support local packaging and repacking of our products and to better service our customers’ needs.
As we do not own any of these factories, our supply chain is a fixed asset-lite model designed to better react to changes in the market or consumer preferences.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” or in other parts of this Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” or in other parts of this Form 10-K.
Although we saw these transportation costs return to near pre-pandemic levels during 2023, we expect instability in pricing to continue in 2024 caused by recent geopolitical disruption of shipping lanes due to ocean carriers avoiding the Gulf due primarily to concerns that Houthi forces, based in Yemen, may attack freighters.
We expect instability in pricing to continue caused by recent geopolitical disruption of shipping lanes due to ocean carriers avoiding the Gulf of Aden and Red Sea regions due primarily to concerns that Houthi forces, based in Yemen, may attack freighters.
(e) Reflects other charges primarily related to the impairment loss related to assets held for sale in both periods and other non-recurring expenses. Liquidity and Capital Resources Since our inception, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities and term loans.
For the year ended December 31, 2023, the amount relates to the impairment loss of assets held for sale. Liquidity and Capital Resources Since our inception, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities and term loans.
Any loss of business or changes in our relationships with our key customers can impact our operating results in future periods, as may changes in consumer demand for private label versus branded products.
We will continue to service their needs if we are asked and it aligns with our long-term margin targets. Any loss of business or changes in our relationships with our key customers can impact our operating results in future periods, as may changes in consumer demand for private label versus branded products.
Our innovation efforts focus on developing and marketing product extensions, improving upon the quality and taste profiles of existing products, and introducing new products or brands to meet evolving consumer needs. For example, we introduced Vita Coco juice as our first broad based offering of coconut juice with pulp in cans.
Our innovation efforts focus on developing and marketing product extensions, improving upon the quality and taste profiles of existing products, and introducing new products or brands to meet evolving consumer needs. For example, in 2024 we introduced Vita Coco Treats, a refreshingly sweet, flavorful coconutmilk-based drink for consumers looking for an indulgent treat.
On a consolidated basis, gross profit increased by $77.4 million, or 74.9%, to $180.7 million for the year ended December 31, 2023, from $103.4 million for the year ended December 31, 2022.
On a consolidated basis, gross profit increased by $18.1 million, or 10.0%, to $198.8 million for the year ended December 31, 2024, from $180.7 million for the year ended December 31, 2023.
Non-GAAP Financial Measures EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and external users of our financial statements, such as industry analysts, investors and lenders.
The change in effective tax rates between the periods is primarily attributable to state income taxes. Non-GAAP Financial Measures EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and external users of our financial statements, such as industry analysts, investors and lenders.
Volume in Case Equivalent The following table provides a comparative summary of our volume in CE, by operating segment and product category: Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Americas segment Vita Coco Coconut Water 33,021 29,458 3,563 12.1 % Private Label 11,298 9,063 2,235 24.7 % Other 923 1,248 (325) (26.0) % Subtotal 45,242 39,769 5,473 13.8 % International segment* Vita Coco Coconut Water 5,783 5,628 155 2.8 % Private Label 2,481 1,783 698 39.1 % Other 62 46 16 34.8 % Subtotal 8,326 7,457 869 11.7 % Total volume (CE) 53,568 47,226 6,342 13.4 % Note: A CE is a standard volume measure used by management which is defined as a case of 12 bottles of 330ml liquid beverages or the same liter volume of oil. * International Other excludes minor volume that is treated as zero CE.
Volume in Case Equivalent The following table provides a comparative summary of our volume in CE, by operating segment and product category: Percentage Change - Year Ended December 31, 2024 vs. 2023 Americas International Total Vita Coco Coconut Water 4.7 % 12.2 % 5.8 % Private Label (1.9) % 12.6 % 0.7 % Other (10.4) % 76.3 % (4.9) % Total volume (CE) 2.7 % 12.8 % 4.3 % Note: A CE is a standard volume measure used by management which is defined as a case of 12 bottles of 330ml liquid beverages or the same liter volume of oil. * International Other excludes minor volume that is treated as zero CE.
On a consolidated and segment basis, the decrease was primarily driven by significantly lower transportation costs, relating to ocean freight and domestic logistics, which were partly offset by higher CE volume.
On a consolidated and segment basis, the increase was primarily driven by elevated transportation costs relating to ocean freight, which was partly offset by lower finished goods costs, partially driven by private label product mix, and domestic logistics.
Americas Segment 44 Table of Contents Americas net sales increased by $56.6 million, or 15.2%, to $430.2 million for the year ended December 31, 2023, from $373.6 million for the year ended December 31, 2022, primarily driven by CE volume growth of 13.8% with additional benefit from branded pricing, partially offset by private label price/mix.
Americas Segment Americas net sales increased by $12.1 million, or 2.8%, to $442.3 million for the year ended December 31, 2024, from $430.2 million for the year ended December 31, 2023, primarily driven by CE volume growth of 2.7% with additional benefit from branded pricing.
Income Tax Expense Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Income tax expense $ (11,291) $ (3,027) $ (8,264) 273.0 % Tax Rate 19.5 % 27.9 % Income tax expense was $11.3 million for the year ended December 31, 2023, as compared to $3.0 million for the year ended December 31, 2022.
Interest Expense The change in interest expense is immaterial. 48 Table of Contents Income Tax Expense Year Ended December 31, Change 2024 2023 Amount Percentage (in thousands) (in thousands) Income tax expense $ 14,836 $ 11,291 $ 3,545 31.4 % Tax Rate 21.0 % 19.5 % Income tax expense was $14.8 million for the year ended December 31, 2024, as compared to $11.3 million for the year ended December 31, 2023.
Other Income (Expense), Net Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Unrealized gain/(loss) on derivative instruments $ (872) $ 6,606 $ (7,478) (113.2 %) Foreign currency gain/(loss) (251) 1,387 (1,638) (118.1 %) Interest income 2,581 51 2,530 n/m Interest expense (31) (258) 227 (88.0 %) Other Income (Expense), Net $ 1,427 $ 7,786 $ (6,359) (81.7 %) n/m—represents percentage calculated not being meaningful Unrealized Gain/(Loss) on Derivative Instruments During the year ended December 31, 2023, we recorded an unrealized loss of $0.9 million relating to outstanding derivative instruments for forward foreign currency exchange contracts, with the largest loss for the year ended December 31, 2023 related to the contracts hedging the British pound and the Brazilian real.
Other Income (Expense), Net Year Ended December 31, Change 2024 2023 Amount Percentage (in thousands) (in thousands) Unrealized gain/(loss) on derivative instruments $ (8,176) $ (872) $ (7,304) n/m Foreign currency gain/(loss) (1,571) (251) (1,320) n/m Interest income 6,715 2,581 4,134 160.2 % Interest expense — (31) 31 (100.0 %) Other Income (Expense), Net $ (3,032) $ 1,427 $ (4,459) n/m n/m—represents percentage calculated not being meaningful Unrealized Gain/(Loss) on Derivative Instruments During the year ended December 31, 2024, we recorded an unrealized loss of $8.2 million for the mark-to-market changes in the fair value on the outstanding derivative instruments for forward foreign currency exchange contracts, with the largest loss for the year ended December 31, 2024 related to the contracts hedging the Brazilian real, offset by gains in British Pound, Euro, and Canadian dollar.
Private Label net sales increased by $5.9 million, or 45.6%, to $18.7 million for the year ended December 31, 2023, as compared to $12.9 million for the year ended December 31, 2022, which was driven by CE volume growth in both EMEA and the Asia Pacific regions.
Private Label net sales increased by $0.6 million, or 3.3%, to $19.3 million for the year ended December 31, 2024, as compared to $18.7 million for the year ended December 31, 2023, which was driven by CE volume growth in EMEA, which was partially offset by CE volume decline in shipments from APAC.
Changes to any of the assumptions or judgments could cause our actual income tax obligations to differ from our estimates. 51 Table of Contents Goodwill Goodwill represents the excess of the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination and is measured in accordance with the provisions of ASC 350, Intangibles—Goodwill and Other .
Goodwill Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination and is measured in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other (ASC 350").
The Company has determined that there are three reporting units for purposes of testing goodwill for impairment: (i) the Americas reporting unit, (ii) the Europe reporting unit, and (iii) the Asia reporting unit. The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value.
The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value.
Gross Profit Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Cost of goods sold Americas segment $ 267,983 $ 278,130 $ (10,147) (3.6 %) International segment 44,900 46,296 $ (1,396) (3.0 %) Total cost of goods sold $ 312,883 $ 324,426 $ (11,543) (3.6 %) Gross profit Americas segment $ 162,262 $ 95,492 $ 66,770 69.9 % International segment 18,467 7,869 10,598 134.7 % Total gross profit $ 180,729 $ 103,361 $ 77,368 74.9 % Gross margin ( percentage of net sales ) Americas segment 37.7 % 25.6 % 12.1 % International segment 29.1 % 14.5 % 14.6 % Consolidated 36.6 % 24.2 % 12.4 % 45 Table of Contents On a consolidated basis, cost of goods sold decreased $11.5 million, or 3.6%, to $312.9 million for the year ended December 31, 2023, from $324.4 million for the year ended December 31, 2022.
Gross Profit Year Ended December 31, Change 2024 2023 Amount Percentage (in thousands) (in thousands) Cost of goods sold Americas segment $ 268,787 $ 267,983 $ 804 0.3 % International segment 48,443 44,900 $ 3,543 7.9 % Total cost of goods sold $ 317,230 $ 312,883 $ 4,347 1.4 % Gross profit Americas segment $ 173,556 $ 162,262 $ 11,294 7.0 % International segment 25,227 18,467 6,760 36.6 % Total gross profit $ 198,783 $ 180,729 $ 18,054 10.0 % Gross margin ( percentage of net sales ) Americas segment 39.2 % 37.7 % 1.5 % International segment 34.2 % 29.1 % 5.1 % Consolidated 38.5 % 36.6 % 1.9 % On a consolidated basis, cost of goods sold increased $4.3 million, or 1.4%, to $317.2 million for the year ended December 31, 2024, from $312.9 million for the year ended December 31, 2023.
We experienced spot cost increases for ocean freight routes from Asia, and then more significant cost increases when carriers began to route away from the Suez Canal. The changes in shipping container prices and service levels and cost increases in shipping and port congestion related costs have materially impacted our financial results in recent years.
The changes in shipping container prices and service levels and cost increases in shipping and port congestion related costs have materially impacted our financial results in recent years.
The effective tax rate for the same period in the prior year is higher than the U.S. statutory rate of 21% primarily as a result of state income taxes for the U.S. operations of the Company and other nondeductible expenses for tax purposes, and is partially offset by lower statutory tax rates in countries outside the U.S. that the Company operates in.
Primarily, the benefit of lower statutory tax rates in foreign jurisdictions is offset by state income taxes. The effective tax rate for the same period in the prior year is lower than the U.S. statutory rate of 21% primarily driven by lower tax rates in foreign jurisdictions and the associated credits available to offset U.S. income tax.
Revolving Credit Facility In May 2020, the Company entered into the five-year credit facility (the "2020 Credit Facility") with Wells Fargo Bank, National Association consisting of a revolving line of credit, which currently provides for committed borrowings of $60 million. The maturity date on the 2020 Credit Facility is May 12, 2026.
Debt We had an immaterial amount of outstanding debt as of December 31, 2024 and December 31, 2023 related to vehicle loans. Revolving Credit Facility In May 2020, the Company entered into the 2020 Credit Facility with Wells Fargo Bank, National Association consisting of a revolving line of credit, which currently provides for committed borrowings of $60 million.
Operating Expenses Year Ended December 31, Change 2023 2022 Amount Percentage (in thousands) (in thousands) Selling, general, and administrative 124,236 100,306 $ 23,930 23.9 % Selling, General and Administrative Expenses SG&A expense increased by $23.9 million, or 23.9%, to $124.2 million for the year ended December 31, 2023, from $100.3 million for the year ended December 31, 2022.
As a result, gross margin increased approximately 1.9% percentage points to 38.5% for the year ended December 31, 2024, as compared to 36.6% for the year ended December 31, 2023. 47 Table of Contents Operating Expenses Year Ended December 31, Change 2024 2023 Amount Percentage (in thousands) (in thousands) Selling, general, and administrative 124,963 124,236 $ 727 0.6 % Selling, General and Administrative Expenses SG&A expense increased by $0.7 million, or 0.6%, to $125.0 million for the year ended December 31, 2024, from $124.2 million for the year ended December 31, 2023.
Vita Coco Coconut Water net sales increased by $3.3 million, or 8.4%, to $41.8 million for the year ended December 31, 2023, from $38.6 million for the year ended December 31, 2022.
Vita Coco Coconut Water net sales increased by $8.5 million, or 20.3%, to $50.3 million for the year ended December 31, 2024, from $41.8 million for the year ended December 31, 2023. The increased sales was driven by higher CE volume, primarily in the European region, and benefits from net pricing actions.
Each segment derives its revenues from the following product categories: • Vita Coco Coconut Water —This product category consists of all branded coconut water product offerings under the Vita Coco labels, where the majority ingredient is coconut water.
Operating Segments We operate in two reporting segments: • Americas —The Americas segment is comprised of our operations in the Americas region, primarily in the U.S. and Canada. • International —The International segment is comprised of our operations primarily in Europe, the Middle East, and the Asia Pacific regions. 44 Table of Contents Each segment derives its revenues from the following product categories: • Vita Coco Coconut Water —This product category consists of all branded coconut water product offerings under the Vita Coco labels, where the majority ingredient is coconut water.
Net Sales for Other products increased by $0.4 million, or 3.9%, to $9.9 million for the year ended December 31, 2023, from $9.5 million for the year ended December 31, 2022.
Private Label net sales decreased by $13.3 million, or 12.9%, to $89.9 million for the year ended December 31, 2024, from $103.2 million for the year ended December 31, 2023.
The change in both years was a result of movements in various foreign currency exchange rates related to transactions denominated in currencies other than the functional currency. 46 Table of Contents Interest Income The increase in interest income for the year ended December 31, 2023 compared to the same prior year period was related to interest income on cash invested with financial institutions, reflecting improved cash balances and higher interest rates versus prior periods.
Foreign Currency Gain/(Loss) Foreign currency loss was $1.6 million for the year ended December 31, 2024, as compared to a $0.3 million loss for the year ended December 31, 2023. The change in both years was a result of movements in various foreign currency exchange rates related to transactions denominated in currencies other than the functional currency.
On October 27, 2021, the Company repaid the outstanding balance on the 2021 Term Loan using the net proceeds from the IPO. Vehicle Loans We periodically enter into vehicle loans. Interest rate on these vehicle loans range from 4.56% to 5.68%. The outstanding balance on the vehicle loans as of December 31, 2023 was less than $0.1 million.
Vehicle Loans We periodically enter into vehicle loans. Interest rate on these vehicle loans range from 4.56% to 5.68%. The outstanding balance on the vehicle loans as of December 31, 2024 was less than $0.1 million. For additional information, see Note 10, Debt, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The higher cash generation was driven by the increase in net income after adjusting for non-cash items and improvements in working capital. Investing Activities During the year ended December 31, 2023 as compared to the year ended December 31, 2022, cash used in investing activities decreased $0.4 million, driven by less expenditures for property and equipment.
Investing Activities During the year ended December 31, 2024 as compared to the year ended December 31, 2023, cash used in investing activities increased $0.4 million due to equipment purchases and technology related capital expenditures.
Private Label net sales increased by $15.0 million, or 17.0%, to $103.2 million for the year ended December 31, 2023, from $88.2 million for the year ended December 31, 2022. The increase was driven by significant CE volume growth of 24.7%, which was partly offset by product price/mix.
The decrease in sales was driven by net CE volume declines of 1.9%, as volume declines of private label coconut oil and the associated product price/mix impact more than offset growth of private label coconut water. 46 Table of Contents Net Sales for Other products decreased by $0.7 million, or 7.1%, to $9.2 million for the year ended December 31, 2024, from $9.9 million for the year ended December 31, 2023, driven by CE volume decline of 10.4%.
If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued product innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition. 48 Table of Contents Cash Flows The following tables summarize our sources and uses of cash: Year Ended December 31, Change (in thousands) 2023 2022 Amount Percentage Cash flows provided by (used in): Operating activities $ 107,155 $ (10,935) $ 118,090 (1079.9) % Investing activities (594) (982) 388 (39.5) % Financing activities 6,290 3,034 3,256 107.3 % Effects of exchange rate on changes on cash and cash equivalents 387 (178) 565 (317.4) % Net (decrease) increase in cash and cash equivalents $ 113,238 $ (9,061) $ 122,299 (1349.7) % Operating Activities Our main source of operating cash is payments received from our customers.
Cash Flows 50 Table of Contents The following tables summarize our sources and uses of cash: Year Ended December 31, Change (in thousands) 2024 2023 Amount Percentage Cash flows provided by (used in): Operating activities $ 42,899 $ 107,155 $ (64,256) (60.0) % Investing activities (974) (594) (380) 64.0 % Financing activities (8,296) 6,290 (14,586) (231.9) % Effects of exchange rate on changes on cash and cash equivalents (563) 387 (950) (245.5) % Net (decrease) increase in cash and cash equivalents $ 33,066 $ 113,238 $ (80,172) (70.8) % Operating Activities Our main source of operating cash is payments received from our customers.
The effective combined federal, state and foreign tax rate decreased to 19.5% from 27.9% for the years ended December 31, 2023, and 2022, respectively.
The effective combined federal, state and foreign tax rate increased to 21.0% from 19.5% for the years ended December 31, 2024 and 2023, respectively. The effective tax rate for the current period is in line with the U.S. statutory rate of 21%, due to offsetting items having minimal net impact on the rate.
We experienced significant inflation on transportation costs over the past three years, which affected our costs and margins significantly.
We experienced significant inflation and instability on transportation costs over the past three years, which affected our costs and margins significantly. Although we saw these transportation costs return to near pre-pandemic levels in the middle of 2023, in 2024, we saw significant cost increases and supply constraints caused by recent geopolitical disruption.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe source a large amount of our finished goods from international countries, which exposes us to international supply chain inflation, particularly ocean freight. Inflation rates varies by country and can impact our costs of operating in those countries. Credit Risk We are exposed to concentration of credit risk from our major customers.
Biggest changeIn recent years, we have seen fluctuating transportation costs caused by global supply chain disruptions or geopolitical instability and general inflation effects, which may cause pressure on our costs and margins. More specifically, we source a large amount of our finished goods from international countries, which exposes us to international supply chain inflation, particularly ocean freight.
As of December 31, 2023, a 1% change in the value of the U.S. dollar compared to foreign currencies would have caused our cash and cash equivalents to decrease or increase by $0.1 million.
As of December 31, 2024, a 1% change in the value of the U.S. dollar compared to foreign currencies would have caused our cash and cash equivalents to decrease or increase by $0.1 million.
We generally target to hedge a majority of our forecasted yearly foreign currency exchange exposure through a 24-month rolling layered approach and leave a portion of our currency forecast floating at spot rate. Our currency forecast and hedge positions are reviewed quarterly.
We generally target to hedge a majority of our forecasted yearly foreign currency exchange exposure through a 24-month rolling layered approach and leave a portion of our currency forecast floating at spot rate. Our currency forecast and hedge 54 Table of Contents positions are reviewed quarterly.
The gains and losses on the forward contracts associated with our balance sheet positions are recorded in “Other income (expense), net” in the consolidated statements of operations. The total notional values of our forward exchange contracts were $121.0 million and $97.4 million as of December 31, 2023 and December 31, 2022, respectively.
The gains and losses on the forward contracts associated with our balance sheet positions are recorded in “Other income (expense), net” in the consolidated statements of operations. The total notional values of our forward exchange contracts were $107.4 million and $121.0 million as of December 31, 2024 and December 31, 2023, respectively.
As of December 31, 2023, the outstanding amounts related to our Revolving Facility incur interest fees at variable interest rates and are affected by changes in the general level of market interest rates. However, there was zero outstanding balance on the Revolving Facility as of December 31, 2023.
As of December 31, 2024, the outstanding amounts related to our Revolving Facility incur interest fees at variable interest rates and are affected by changes in the general level of market interest rates. However, there was no outstanding balance on the Revolving Facility as of December 31, 2024.
As of December 31, 2022, a 1% change in the value of the U.S. dollar compared to foreign currencies would have caused our cash and cash equivalents to decrease or increase by $0.1 million. Inflation Risk Inflation generally affects us by increasing our costs of goods and labor costs.
As of December 31, 2023, a 1% change in the value of the U.S. dollar compared to foreign currencies would have caused our cash and cash equivalents to decrease or increase by $0.1 million. Inflation Risk Inflation generally affects us by increasing our cost of transportation, labor and manufacturing costs.
The derivatives on the forward exchange contracts resulted in an unrealized loss of $0.9 million as of December 31, 2023, and we estimate that a 10 percent strengthening or weakening of the U.S. dollar would have resulted in an approximately $6.2 million gain or loss. Part of our cash and cash equivalents are denominated in foreign currencies.
The derivatives on the forward exchange contracts resulted in an unrealized loss of $8.2 million as of December 31, 2024, and we estimate that a 10% strengthening or weakening of the U.S. dollar would have resulted in an approximately $1.9 million gain or loss. Part of our cash and cash equivalents are denominated in foreign currencies.
As of December 31, 2023, sales to two customers represented approximately 53% of our consolidated net sales. We have not experienced credit issues with these customers. We maintain provisions for potential credit losses and evaluate the solvency of our customers on an ongoing basis to determine if additional allowances for doubtful accounts and customer credits need to be recorded.
We maintain provisions for potential credit losses and evaluate the solvency of our customers on an ongoing basis to determine if additional allowances for doubtful accounts and customer credits need to be recorded. Significant economic disruptions or a slowdown in the economy could result in substantial additional charges. 55 Table of Contents
Removed
During the year ended December 31, 2021, the Company repaid the outstanding balance on the 2021 Term Loan as discussed in the consolidated financial statements included elsewhere in this Form 10-K, using net proceeds received on the closing of the IPO.
Added
During the year ended December 31, 2024, general inflationary pressures continue to increase the other elements of our cost of goods and operating expenses.
Removed
In the three years ending December 31, 2023, we experienced significant inflation on transportation costs compared to 2020 levels, which impacted our costs and margins significantly. While these transportation costs largely returned to historic levels during 2023, we have again seen instability in pricing due to geopolitical disruption of shipping lanes during 2024.
Added
Recently, there have been discussions about potential tariffs and other import related fees, on goods, including those imported from China, Mexico, and Canada, and while the specifics are unclear, if tariffs are implemented on goods from these countries, or other countries where the Company does business, they may raise the Company's cost of importation of coconut water and require the Company to adjust its pricing or strategy.
Removed
Significant economic disruptions or a slowdown in the economy could result in substantial additional charges. 53 Table of Contents
Added
Credit Risk We are exposed to concentration of credit risk from our major customers. As of December 31, 2024, sales to two customers represented approximately 48% of our consolidated net sales. We have not experienced credit issues with these customers.

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