The Po family’s Century Pacific Food Inc. (CNPF) on Monday said it entered into a new long-term contract with The Vita Coco Co. Inc., a listed US company that sells coconut water.
The agreement covers additional volume requirements by Vita Coco, which will entail new capacity requiring a capital expenditure investment of some $40 million (about P2.2 billion). This is expected to create at least 1,500 manufacturing jobs, CNPF said.
Under the new contract, Vita Coco will require approximately 90 million liters of coconut water over the next five years.
The previous agreement signed in 2020 continues to be in force and is up for renewal discussions in 2025. The new contract is incremental to the existing agreement, the company said. “The expansion of the multi-year agreement with Vita Coco conveys our mutual trust and respect for each other as business partners, a relationship built through consistency, collaboration and excellence,” Noel Tempongko Jr., vice president of CNPF’s Coconut OEM business, said.
The company’s partnership with Vita Coco marked CNPF’s entry into the coconut category. The initial agreement started in 2012, and, since then, the group has produced multiple coconut products for Vita Coco.
With long-term health and wellness trends on the rise, both partners saw a significant increase in sales over the last decade.
During this time, CNPF has become one of the largest suppliers of Vita Coco, augmenting its capacity by 50 percent in 2022, to serve the brand’s growing needs.
“We are thrilled to enter into this new agreement and eagerly anticipate the opportunity to meet the heightened demand. As such, we are planning to invest in additional capacity, which will create more jobs in Mindanao and help stimulate the local economy,” Tempongko said.
“Our mutual ambition to serve consumers better with healthier products has taken us to new heights in innovation and quality. This agreement also creates an avenue by which we collaborate to make a positive impact on society and help build thriving communities among smallholder farmers in the Philippines,” Jonathan Burth, COO of Vita Coco, said.
The companies said the deal will further support the growth of the local coconut industry in the region.
The Philippines is second largest producer of coconuts in the world, home to approximately 2.5 million coconut farmers. Many of them are in Mindanao where CNPF operates.
CNPF works with local smallholder farmers, creating market access for their produce. In 2021, the group partnered with the fintech GCash, and impact organization, HOPE, to plant and donate 1 million coconut trees to smallholder coconut farmers in Mindanao.
These younger seedlings aid in boosting the productivity of their farms, augmenting their income. The program helps secure long-term coconut supply, and, in turn, support the sustainability of the country’s coconut industry. CNPF completed the 1 Million Coconut Trees program in 2022.