ZICO (Pronounced: Zee-Ko) is an interesting company. I grew up drinking coconut water and In my view, none of the U.S based coconut water brands struck me as being worthy of existing in this new category during it’s infancy. Coconut water products in the market today have gotten there due to a few key reasons, namely: having access to a solid chain of distribution in the initial phase and being the first to break into a under utilized market and category. Sure, product quality matters – but It certainly did not have much priority in the early stages of the game. When coconut water started to slowly catch-on back in 2006, I tried almost all the brands out there and quite frankly, I was not that impressed.
I think that may have changed.
Companies like VitaCoco started to show a massive upswing in revenue since around 2007 (sales around $20MM in 2009 and $40MM in 2010 and growing) and product quality among all the leading brands are no longer a factor in selling a product in this category.
These days, it’s mostly a matter of distribution strategy and marketing. Beverage distribution is fairly convoluted to begin with and to call it a impenetrable labyrinth would be a massive understatement. In other words, it’s almost always who you know that will enable you to quickly flood the market with your product through the proper channels (ie: grocery store shelves etc.) when the demand is sprouting at a staggering pace. I think this is how companies like ZICO and VitaCoco managed to become category leaders.
No doubt, one of the reasons ZICO has been successful in this market is because Mark’s strategic alignments with big boy distributors (including Coke by the way) and key celebrities. In this particular category – In my opinion, those elements are the deciding factors. Sure, there was considerable influence from several groups of early adopters (yoga, pilates and fitness crowds) in getting market traction, but I don’t think they were as important as the other two key elements I mentioned earlier. Quite simply, If you fail to get your marketing and distribution right in the early stages, you are going to fucking die. Simple as that.
It’s not an accident that competitors are using a similar strategy with their own positioning.
Recently, I got a case of ZICO from a company rep doing promotions and incidentally – I have been drinking and pissing coconut water this entire week. Not to sound unctuous, but this stuff is quite delicious. I haven’t been paying attention to this category for a while, but after scratching the surface of how and why ZICO managed to slip through the cracks and secure a decent chunk of the market – my curiosity was piqued.
I was curious about how ZICO came into fruition without any previous experience in the beverage industry and had a few questions for the CEO.
Who better to ask than the man who started it all?
The following is a recent brain pick session I had with Mark.
DW: Being able to pay attention to the subtle key changes in an industry is crucial. If you were to elevate yourself a thousand feet above the action – In what direction do you think your industry is moving?
MR: I thought the beverage industry was insanely competitive when we entered it 8 years ago. (2004) Now, it’s even more so. The pace of innovation is faster. The cost to scale is greater. And the window of opportunity before knock offs arrive is shorter. I think it’s more important than ever that new beverages be authentic, healthy and natural; that brands be unique and compelling; that companies be well financed and managed; and that execution be focused, fast and near flawless.
DW: Mark, you have advised many entrepreneurs to find their purpose. In retrospect, why you do think it took you a while to figure out your purpose and would you have done anything different and/or changed course in your life if you had the chance?
MR: I sometimes feel “what took me so long” and at others “I’m so glad I figured it out when I did.” There’s really not much I would do differently in my career or life. My career has been amazing with some crazy twists and turns and still many years ahead. If I changed anything it’s possible, even likely, I would not have stumbled upon ZICO, which is a very large part of my purpose in life…at least for now.
DW: I am very impressed at how you meticulously did your homework (ie: market research, production, sourcing, branding, viability) before launching ZICO. Furthermore, even after launching – you didn’t do a “full launch”, instead a “pilot launch” was done in tradeshows to further validate the idea. This is even before the incorporation stage, which is rare. Can you walk us through your thought process when it comes to validating and testing an idea including the most important elements that one should focus on?
MR: I think its important to remember that I was a corporate guy before starting ZICO and I definitely carried many elements, good and bad, from that into ZICO, especially at the early stage. Part of the reason I was so thorough was that I was thinking like a corporate guy. I also had taken in money from family and friends so felt the need to confirm my intuition. I also had to convince my wonderful and smart “show me the data” wife to support me leaving a steady income and clear career path. I’d probably do less homework today. The valuable part of the research was not so much validating the concept as refining our strategy and narrowing our focus. Among the questions it helped us answer were: what consumers should we focus on and why? What specific usage occasion should we target? What retail channels are the best out of the gate? What route to market? It also helped us tweaking certain brand elements to make sure they resonated well with the strategy we developed. Research is good when you know what you need to know. But will it make a difference in your decision? What are you willing to risk? How important is speed? What can you afford to spend and what will you gain? Is this an area where you can fail forward?
I’ll give you an interesting example. Last year we developed ZICO chocolate. We had virtually no market data. We did no consumer research. Many very smart people thought it was a bad idea and didn’t fit with the ZICO brand or our strategy. They also recommended we should trial launch in a small market to gauge consumer feedback. Instead we just went for it. We rolled it out from concept to market in 90 days, introduced it at a major trade show and simultaneously launched in our most important market, New York. We believed it would succeed, but were not certain, and were in a position that we could fail forward: had it been a dog we would have pulled it immediately and not lost a beat.
There’s a time for research and data and there’s a time to trust your gut.
DW: What are the key elements/strategies that helped you bring ZICO into the marketplace and differentiate yourself from your competitors? Also, since there are quite a bit of established products in the “coconut water” category currently – what is your long term strategy for ZICO?
MR: Focus. Focus. Focus. We narrowed our focus to a very specific group of consumers, retailer and even neighborhoods and only when we were successful there did we move on. This forced us to learn, improve and build momentum that we carry with us to this day. Long term we are very clear on what we want to achieve with and through ZICO: to build a new global beverage category anchored around the healthy, natural replenishing properties of coconut water; for ZICO to be the leading coconut water in the world and a billion dollar life-style brand that stands for healthy, natural active living. In the process we want to create one of the best companies in the beverage industry and make a major, sustainably positive impact in the countries across the world that grow coconuts.
DW: You have done a fantastic job with aligning your brand with several key partners – how did you manage to successfully partner up with these key players and what advice would you give other brands attempting to do the same thing?
MR: Know what you want and why. Then go for it with all your heart, but also believe (and make sure) you can survive without it. I wanted to work with The Coca Cola Company before we even launched ZICO. I couldn’t think of a better partner to help us achieve our goals and hoped ZICO would grow to play a part in helping this mega-corporation be more active in health and wellness. We cultivated relationships there early and when the time was right it was easy to establish the right kind of partnership. But we also were never in a position of necessity and always knew we could and would go it alone if the relationship did not work for us. To date, it’s working better than I could have imagined.
DW: I am fascinated by how ZICO initially gained momentum (albeit, slow momentum) without a multimillion-dollar marketing budget or a distribution network like the big boys. You have mentioned earlier that “marketing” was a huge component of ZICO’s success. What are the most important things one should focus on when bringing a brand new product into a brand new category and how should one approach marketing it?
MR: Become relevant in people’s lives. Too often marketers think about segments, demographics, or target audiences and forget that it’s about a single individual, especially when introducing a new brand or trying to create a new category. How is a product or service relevant in their life? How do they use it? What does it replace? Do they welcome it into their homes? Do they tell their friends about it, in fact advocate for it? Do they love it? If you can create passion for your brand even among a very small group of consumers, you have a place to start and potentially the foundation for a strong business.
DW: Can you give us rough estimates of revenue/margins/company size?
MR: We do not disclose sales but we are almost 70 people in ZICO now and 8 years later are still growing by over 50% per year and now ZICO is retailed in over 30,000 stores in the US alone.
DW: What is the single biggest mistake you have made thus far in relation to your venture?
MR: We should have gone faster, sooner, mainly by building a better infrastructure. As successful as we’ve been, it’s been much more painful than it needed it be and would have been if I had made the decision earlier to invest in people, infrastructure, supply chain, distribution and marketing all a little earlier than we did.
DW: How do you manage your own mental health/focus and time when distractions run rampant – especially as the guy who is leading the pack?
MR: My wife Maura and I were very clear from the beginning that our definition of success not only included but revolved around both of us staying healthy, sane, happy, connected to each other, our kids and family and friends. We had a great life before ZICO. We’re having one during. And we’ll have one after. Otherwise, what’s the point? To achieve fame and fortune and have a heart attack at 45, be divorced, estranged from my kids and a long list of enemies? That is not winning in my book. So we set out to make ZICO a success while enjoying life in the process.
I work very hard and am intense, probably obsessive about ZICO. I also travel a great deal for work. But I have a life. I meditate most mornings. I do yoga or work out almost every day. I read. I’m home for dinner by 6:30 or 7pm the vast majority of nights I’m not traveling. I play with my girls and am involved in their lives. I take vacation. I do little work on the weekend and if I have a ZICO event take my girls and/or Maura. I’ve found that when I draw boundaries it forces me to prioritize and make my days very efficient and effective…or at least a little shorter!
DW: What is your single biggest challenge/weakness as a CEO?
MR: At the rate we’re growing, my role changes every 4-6 months. What I needed to do early on is so different from the needs today. My focus this year needs to be significantly different from last. My greatest challenges are managing my time; setting priorities for the organization; applying the right resources to the right opportunities and problems; knowing when to get involved to solve a problem and when I’m the problem and need to get out of the way! It’s a constant battle but I learn so much about myself in the process that even if I didn’t love what I’m doing I’d still value it.
DW: What is your company culture like and did you engineer it yourself during the early stages of your venture or was it more of an organic spread from your first few employees?
MR: We have a unique culture that I think might be surmised as passion with a purpose. We all share a passion for achieving the vision of ZICO but want to achieve it in a certain way. We’re competitive but not cut throat. We work hard but have balance. We want to win but with integrity. Everyone has a pretty cool outlook on life and most have a sense of humor (excluding me). Some of it comes from me, but much of it has grown organically from some of the earliest hires and has been reinforced by people we’ve chosen and retained. In fact I’d say there are many stewards of the ZICO culture, and believe me, I hear from many on the Z-Team if they think we or I am doing something out of whack with our culture!
DW: What is the best business & life advice given to you and by whom?
MR: “I don’t know the key to success, but the key to failure is trying to please everybody.” – Bill Cosby
DW: What are some books that have been instrumental in your own development in business and in life and why?
Hmm. I got several.
Sadhana: A Way to God – Anthony De Mello – How I learned to meditate.
The Road Less Traveled – M. Scott Peck – Helped me integrate discipline, personal and spiritual growth into my life and career.
The Success Principles – Jack Canfield –While somewhat canned and simplistic, I found this one of the best self-help books and it has served me very well.
Emotional Intelligence – Daniel Goleman – Gave me added confidence to lead.
Flow – Mihaly Csikszentmihalyi – Helped me understand the creative process and how to get “in the zone” myself.
The Power of Now – Eckart Tolle –Reminded me of the value of being fully present in everything I do.
Churchill – Martin Gilbert and The Life of Mahatma Gandhi – Louis Fisher. Reading these two incredible, intertwined life stories back-to-back showed me how individuals can change the world in such very different ways with focus, discipline and flexibility
Mark Rampolla is the Founder and CEO of ZICO Beverages. In 2004, he left a fast-track corporate career to pursue his dream of bringing the healthy, natural benefits of coconut water to consumers across the world. ZICO has been featured in numerous high-profile media outlets including the Wall Street Journal, Bloomberg and CNBC. You can follow ZICO via facebook and twitter.