AXELUM Resources Corp. signed a 10-year coconut water supply deal Thursday with US customer The Vita Coco Company., Inc.
Axelum Chairman and Chief Executive Officer Romeo I. Chan said that the deal runs until 2033, with an additional option for extension by another five years.
Asked about the value of the deal, Mr. Chan declined to answer.
He added that the supply deal will bolster the company’s “fastest-growing segments,” adding that the company is focused on meeting growing demand from Vita Coco.
Axelum recently constructed a new facility to bolster production and meet the long-term volume requirements of Vita Coco.
“We are buying coconuts up to a 200-kilometer radius all over Mindanao, and we’ve augmented the income of farmers by buying 187 million coconuts every year, that’s valued at P1.12 billion,” Mr. Chan said.
Axelum has business interests in manufacturing coconut water and other such products for the domestic and international markets.
It ships its products to the US, Canada, Australia, New Zealand, Europe, the Middle East, Japan, and elsewhere in Asia.
Mr. Chan said that the company has supplied about 260 million liters of coconut water since 2009, when Axelum became the first non-Brazilian supplier to Vita Coco.
Citing a report by SkyQuest Technology, Mr. Chan said that the global coconut water market is set to expand to $25.18 billion by 2031, with a compounded annual growth rate of 16.1%.
“As far as supply, we strive for the highest number. But our goal is to double and then redouble the business. We want to grow,“ Jonathan Burth, Vita Coco chief operating officer said.
Mr. Burth added that Axelum supplies around 40% of the company’s coconut water requirements.
Vita Coco’s products include Original Coconut Water, Farmers Organic and Pressed Coconut Water. — Adrian H. Halili