Zico: an America's Hottest Brands Case Study

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Zico
Coconut water is a category that has seen major growth in the last year, with expected wholesale sales of $35 million this year, up from $20 million a year ago, according to Beverage Marketing Corp. And Zico, which was introduced by Mark Rampolla in 2004, is emerging as one of its leading brands. Sales have doubled each of the last few years, and Mr. Rampolla expects they'll continue to double for at least the next few years. It's no wonder then that the category has attracted the attention of major marketers such as Coca-Cola and PepsiCo. The former led a group of investors taking a less than 20% stake in Zico to the tune of $15 million this fall.

"Our objective in this business is pretty simple. We believe coconut water is a healthier, better product that needs to get out to the world. We want to see that scale globally," said Mr. Rampolla. "[The investment] means we get the resources we need to keep growing."

At this point, Coca-Cola has offered market and consumer insights, as well as research that is proving helpful, Mr. Rampolla said. There are no immediate plans to distribute through Coca-Cola's network, but Zico is getting advice on various channels and partners as it enters new markets, Mr. Rampolla said. Zico, which is made from green coconuts and positioned as a natural sports drink, can be found at Whole Foods, as well as gyms, yoga studios, college campuses and natural-food retailers in markets including New York, Los Angeles, Boston and Chicago. In the coming year there are plans to expand into new markets, including San Francisco, Colorado and Texas.

Mark Rampolla
Mark Rampolla, founder, Zico Beverages
Still, Mr. Rampolla says the brand's strategy, which has worked exceedingly well so far, will remain intact as it expands. When Zico first enters a new market, it heads straight for hot-yoga studios, where it has had success in cultivating a crop of brand evangelists. It also does sampling and events, and recently it plastered ads on NYC pedicabs. The brand works with public relations firm Sandy Hillman Communications, Baltimore, and Suite 850, New York. Jesse Itzler, principal at Suite 850 and founder of Marquis Jet is an investor.

"It's a very guerilla marketing approach," Mr. Rampolla said. "We will start to take that up a notch, in select markets. But we still don't have traditional advertising today. That will come a few years down the road."

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