How This $100 Million Coconut Water Brand Is Betting On Regenerative Agriculture For Its Future

Harmless Harvest was founded with a mission: “to make the most amazing coconut water in the most ethical way possible.” But what happens when the only material used in coconut water – the coconuts themselves – are at risk?

“Earlier this year, our coconut supply was in trouble,” CEO Ben Mand explains. “We were experiencing 12% smaller coconuts yielding 30% less water, and we knew we had to do something bold.”

Thailand, where Harmless Harvest sources its coconuts, has experienced a particularly hard drought this year. The drought has impacted the country’s production of staples like rice and corn, and it is estimated to cost the country up to $840 million in losses, according to the USDA. A low water table, compounded with the fact that up to 90% of the coconut trees in Asia are at the end of their productive cycle, signals there could be coconut supply issues on the horizon.

The coconut water industry has grown tremendously over the last decade, and it is now a $4 billion global market with a forecasted CAGR of 16.1% over the next decade. Harmless Harvest has emerged as a leader in organic coconut water that uses less processing, impacting the flavor of the final product.

The industry has been rife with human rights and environmental issues. An estimated 95% of coconuts are grown by small scale farmers in Asia-Pacific, with little social protections. And, according to the Guardian, “Unsurprisingly, the financial spoils from the coconut craze do not tend to reach growers.” It is estimated that up to half of the coconut farmers in the Philippines live in extreme poverty, making less than $1/day.

Harmless Harvest recognized this as a business threat from the beginning. According to Mand, “Market conditions fluctuate wildly – it is not uncommon to see prices swing by 50% in a matter of weeks…We worked with Fair For Life to determine a price floor to ensure a steady price for farmers. Conventionally sourced coconuts do not have a price floor.”

Investors took notice of their approach. Laurent Marcel, CEO of Danone Manifesto Ventures, shared, “We invested in Harmless Harvest because we believed it had the two key features of long-term brand success: a delicious, organic product, and a thoughtful supply chain that takes care of people and the environment. As the company keeps expanding, we think the latter, which is what makes it ‘harmless,’ is even more relevant for consumers who increasingly expect brands to be caring and transparent.” Danone led a $30 million growth round in Harmless Harvest in 2018.

Today Harmless Harvest is publicly committing to sourcing 50% of its coconuts from certified regenerative organic certified farmland by 2023. This means that the company will invest in restoring soil health and diversifying income for their farm partners. Harmless Harvest is also betting that this will secure their supply of quality organic coconuts.

“We will use all vertical and horizontal layers of the farm ecosystem – from shrimp and fish in the canals, to nitrogen-fixing legumes on the soil, to bee hives that improve pollination, to pepper as a pest deterrent on the tree trunk. All of this [effort] aims to maximize plant density and health, carbon sequestration, soil health, and increased/diversify revenue sources, which improves farmer revenue and helps ensure better financial resiliency,” says Mand.

The mission is a personal one for Mand. He grew up on a conventional farm in Wisconsin, and later saw his father suffer from a neurodegenerative disorder which has links to the chemical used in conventional farming. “My grandparents were farmers, and I lived with my parents on the farm. I understand this livelihood. A few years ago my dad passed away from a neurodegenerative disorder which has links to the chemical used in conventional farming… For me, this mission is deeply personal.”

The company says that it is making the bet on regenerative agriculture because a long-term supply of coconuts is critical to the survival of its business. Mand hopes that others in the industry join in this effort. He says, “we definitely hope that our competitors will get inspired, join the movement, and work on regenerating the soil. All the training material of our program will be open source and available for anyone to use. If all agricultural land on earth would be farmed with regenerative, soil-building practices, we could fix enough carbon in the soil to reverse global warming within 5 years.”

Harmless Harvest plans to publish an annual impact accountability report.

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