Vita Coco is no longer in an Exclusive relationship.
The brand’s co-founder, Mike Kirban, announced today that he was shifting distribution responsibilities for the Manhattan, Brooklyn and Queens regions from specialty house Exclusive Beverage to Dr Pepper Snapple Group’s Eastern Business Unit.
The decision came after Vita Coco achieved a four-year period of massive growth for the brand in New York with Exclusive, which was founded by Steve Gress as an alternative house for entrepreneurial brands in the city beyond the go-to brand-builder Big Geyser.
“They’re awesome,” Kirban said of Exclusive, which he said took the brand from zero to over 500,000 cases annually in New York. “We built the brand with them from the beginning, and it’s a tough decision. If I was starting a new brand, there is no place else I’d rather go.”
The move signals the ongoing alignment of the fast-growing brand with the large-scale direct-store delivery might of DPS, however. Starting with an announcement in June 2010 that the brand was moving to DPS in certain business units, the expansion gradually became inevitable in New York. Earlier this summer, Exclusive was forced to cede distribution to DPS in Long Island, parts of New Jersey and Westchester County, NY, but had held onto its core market in Manhattan.
As part of the termination of its contract with Exclusive, Vita Coco was forced to pay a termination fee. Asked the cost of the buyout, Kirban would only say “it’s a lot of money, and it’s going to put Exclusive into a great position to further invest and build out the business.”
The brand didn’t just change its New York distributor, however. As of Oct. 21, it is moving from one Anheuser Busch Inbev house in Arizona to a larger one, terminating Spike & Golden Eagle Distributors for the fast-growing NA business at fellow Budweiser distributor Hensley & Co in Phoenix. Hensley already carries Xyience’s Xenergy brand, AriZona, and several brands in the Coast Beverage portfolio, but Vita Coco adds another major layer in the company’s NA strategy.
“Again, the reason is that it’s a distributor with more manpower, more bodies, more reach,” Kirban said. “In the early days, we couldn’t go anywhere. Now, we need distributors who can take us everywhere.”
Much of that load will be shouldered by DPS in other parts of the country, as well. According to Kirban, the brand will be shifting to DPS in Texas and Colorado after Jan. 1, while it has begun to move even more of its product onto DPS trucks in the Midwest, including Michigan, Illinois and Wisconsin.
Gress was not available for comment as this breaking story went live; recently the company has seen losses in some of its upper ranks, with the departure of VP of Sales Steve Evangelista, who left with recent addition Ariel Nelson for a dairy distributor in August, as well as the launch of Preferred Beverage by Lou Ferraro, a longtime Exclusive employee.
Exclusive, which has a strong relationship with New York powerhouse drug chain Duane Reade, still stocks strong brands. It currently carries Xyience in Manhatan, along with Langer’s, Purity Organic and Maine Root
According to Kirban, the departures had little to do with the change, as he credited Vita Coco’s success with Exclusive to its drivers and sales reps.
“The turnover didn’t affect it,” he said. “The guys who drove our volume were the street guys.”