Buoyed by a series of endorsement deals and a peek at the company’s overall approach to distribution and marketing, the CEO of Vita Coco today revealed important strategic insights about its future as it pushes for growth and leadership in the coconut water category.
The brand is repositioning itself in terms of spending to accelerate growth, CEO Mike Kirban told BevNET Thursday, three days after announcing during the BevNET Live conference that it was already reconsidering some of its distributor deals in light of the volume of cases Vita Coco has begun to sell. With two high profile athletes on board, it is also hoping to extend its marketing footprint into the sports drink arena. The move comes at a time when rival companies have also gained major wins, including ZICO extending into Target, CVS and other large chains.
“It’s putting the pedal to the metal on the brand big time,” Kirban said. “I’m done – we’ve got a 60 share in the category, we’re three times the size of the nearest competitor, and I’m done having people have any confusion on the category.”
“We want to be synonymous with the coconut water category,” Kirban added. “I don’t care what it costs, I don’t care what we have to do.”
That bold statement came a day after Vita Coco announced the brand had added New York Yankee slugger Alex Rodrigues and Boston Red Sox sparkplug Dustin Pedroia as two new faces of the brand. It also came a few weeks after Vita Coco began working on a summer advertising campaign with superstar pop singer Rihanna.
Kirban made it clear that the marketing moves were designed to deepen the brand’s lifestyle roots but also extend its marketing push into the realm of athletic functionality. To this point, Vita Coco has made big news on the marketing front largely by soliciting investment from actors and singers, including Madonna. But Kirban said the signing of the baseball players was a deliberate move to give his brand a voice in the athletic arena – one that has largely been the realm of its competitor, fast growing ZICO, which has long billed itself as a naturally derived Gatorade alternative.
“It’s another layer on our advertising that goes beyond strictly lifestyle,” Kirban said. “I think these athletes have the ability, when they make a statement, that it’s more functional as opposed to the taste.”
The attempt to spread the Vita Coco message wider arrived at a time when the brand is reaching a new stage in its maturity, one that Kirban alluded to during a speech to entrepreneurs, distributors – some of whom currently carry Vita Coco – and investors during Monday’s BevNET Live conference. Kirban mentioned that he and his company had been looking over agreements and was renegotiating some of them based on the company’s growth, stating that conditions were different when a brand was selling 1,000 or 2,000 cases a month to one that was selling 100,000 cases a year or more with the same distributors.
Speaking with BevNET today, Kirban elaborated on the statement. With buyout clauses in place during early contracts based on a multiple of his sales, he said, it would be more prudent to exercise the buyout now and pay his distributors for terminating their contract than after a period of what he is presuming will bring even more sales volume for the brand.
“We’re saying ‘your contract doesn’t work for a buyout because we’re growing too much now,’” Kirban told BevNET. “So we can renegotiate it now before we get too big to be able to buy you out, or we can buy you out because we need to grow.”
Despite that growth emphasis – as well as a set of co-investors that also includes venture capital fund Verlinvest and a raft of celebrities who are aware of multimillion dollar paydays realized in the $4 billion-plus sale of glaceau to Coca-Cola — there is no push on to sell the company, Kirban insisted.
“Absolutely not,” Kirban said. “We’re building a brand, the goal is a billion dollars in revenue right now, it has nothing to do with building an exit.”
Kirban also addressed one minor irony — that Vita Coco, in announcing the addition of both Pedroia and Rodriguez, had put its fate in the hands of opposing players in the traditionally intense Yankee/Red Sox rivalry.
“Irony is my middle name,” Kirban said. “I’m a big Yankee fan and there’s no better slugger in the game today than Alex. The only thing I like about Boston is Pedroia. I love his fighting, take-no-crap attitude and when he came to us looking to do something, I jumped on the opportunity.”