NEW YORK (AP) — The makers of Vita Coco have settled a lawsuit claiming its top-selling coconut water drinks do not provide the nutrients promised.
As part of the agreement, All Market Inc. said it will change its labels to more accurately reflect the "natural variability" of coconut water starting in May. The company will also provide up to $5 million in refunds, vouchers and charitable donations as part of the settlement.
In an emailed statement, the company said it stands by its promotion of Vita Coco as "an excellent source of natural hydration."
Labaton Sucharow LLP, the New York law firm that filed the suit, had said Vita Coco marketed its coconut water as "super hydrating," ''nutrient packed" and "super water."
But the firm said an independent study showed that Vita Coco's products do not contain the electrolyte levels indicated on its labels.
"For the millions of consumers who pay for products that claim to improve their health, this settlement sends a message that companies will be held accountable when they exaggerate or misstate the health benefits of their products," said Kellie Lerner, an attorney with Labaton Sucharow.
All Market agreed to an independent testing program to reduce potential variations in the nutritional content of its water. The company will provide up to $2 million in refunds and vouchers to customers who bought its drinks directly from its website in the past two years. It will also donate $3 million worth of its product to charitable groups.
Vita Coco, launched in 2004, is a top-selling coconut water available in over 25,000 retail stores across the country.
Arthur Gallego, a Vita Coco spokesman, said the lawsuit has not affected its relationships with distributors and that it plans to increase its retail presence to 40,000 stores by the first quarter of this year.