Century Pacific expands and extends coco product supply agreement with Vita Coco

Century Pacific Food [CNPF 35.05, down 2.1%] [link] said that it has entered into a new agreement with The Vita Coco Company (Vita Coco), which CNPF describes as a “global leader in the coconut water category”, to supply Vita Coco with 90 million liters of coconut water over the next five years. This supply contract will require CNPF to spend approximately $40 million (~P2.2 billion) in capex to increase its capacity at its facilities in Mindanao. CNPF expects this agreement to create 1,500 manufacturing jobs.

MB bottom-line: The global coconut water market is huge, and it’s growing at a robust rate. Estimates on its size vary ($2.6 billion to $5.2 billion now), as do estimates of its growth rate (10.8% to 17% CAGR), but nearly all sources agree that this growth should continue until at least 2030. While I experienced a shot of existential dread at the thought that 2030 is only six years away, that’s still a long time for an industry to experience double-digit annual growth and a great chance for CNPF to grow its coco-products segment.

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