Danone Details Growth Plans for Harmless Harvest

Brad Avery

Danone Manifesto Ventures (DMV) announced this week that it has acquired a majority ownership stake in coconut products maker Harmless Harvest. Speaking to BevNET, DMV CEO Laurent Marcel and Harmless Harvest CEO Ben Mand said the deal is primed to help the premium beverage and plant-based food maker to expand its presence in the global market.

Why did DMV increase its stake?

DMV made its initial investment in Harmless Harvest by leading a $30 million funding round in 2017. With the added resources, the coconut water brand has since opened a new factory in Thailand, where it sources its coconuts, and launched a plant-based coconut yogurt line. According to Marcel, DMV’s decision to increase its stake comes as the brand’s sales accelerate and Danone seeks to become more active in growing Harmless Harvest’s business.

Marcel said Danone will become more hands-on in growing Harmless Harvest’s sales and distribution and will work to strengthen the brand’s supply chain.

The deal comes as Harmless Harvest, and the coconut water category at large, is seeing renewed velocity growth as the pandemic winds down and American consumers return to old shopping habits, Mand said. The brand currently has a roughly 50% ACV in MULO, and is now making headways into mass retail with multipack formats while continuing to build out its ecommerce business.

According to Mand, the brand is on track to surpass $100 million in sales this year as refrigerated coconut water enjoys a sales resurgence. While category leader Vita Coco considers a potential IPO this year, Mand said he believes Harmless Harvest has positioned itself as a key player in the category and is benefitting from the rising interest in the space.

“If I ground this in consumer behavior, we’re seeing a renewed interest in coconut water in general,” Mand said. “And there’s never been a dip in interest in Harmless and the coconut water that we bring. So we think it’s only upside. The long term trends really facilitate a strong business potential for Harmless Harvest.”

Although he declined to specify the exact size of DMV’s stake in the company, Marcel said the French multinational corporation will continue to incubate Harmless Harvest before deciding on whether to outright acquire the rest of the brand in the future.

“We want to give time to these young brands and young companies to flourish before rushing to any kind of more integrated platform,” Marcel said. “So that will come later when we decide together with Ben, his team and the other investors.”

AF Ventures, which participated in Harmless Harvest’s 2017 financing round, declared its investment in the brand “Realized” on its website. Mand said the firm remains a shareholder in the company.

How will Danone help Harmless Harvest grow?

Over the past 18 months, Harmless Harvest has turned towards innovation to expand the brand, introducing its “Hint Of” flavored line, functional Energizing coconut waters, coconut smoothies and the aforementioned yogurt alternatives. Working with Danone will allow the brand to increase its marketing spend, Mand said, while the return of in-store sampling, he said, will be key to driving consumer conversion.

“Our biggest challenge is just that people don’t even know Harmless Harvest,” Mand said. “Once they try our products they’re continually hooked, we have really high repeat and loyalty rates compared to almost any other product. Our issue is just making people try the products.”

The brand plans to make numerous new hires “on all fronts” of the business, Mand said, with particular attention to its ecommerce and sales and marketing teams.

Danone’s long-standing experience in dairy yogurt will also benefit Harmless Harvest’s plans to grow into food sector. Mand noted that the company’s R&D has been essential to developing a plant-based product with the proper taste and texture, while Marcel said the brand’s crossover between “healthy hydration” and plant-based dairy alternatives will play an important role in Danone’s strategic focus on “the future of food.”

Marcel added that Harmless Harvest’s emphasis on sustainability — the brand is both organic and Fair for Life certified — is also an area of focus for Danone. The company will aim to help Harmless increase its use of regenerative agriculture, with a goal of converting the brand’s coconut supply to 50% regenerative farms by 2023.

“We believe [sustainability] is a big part of the success of the company,” Marcel said. “It’s not just a brand, it’s a brand built on a very strong fundamental, which is the unique mission.”