Whether its young kids trying to earn money for a trip to the amusement park or an adult picking up gigs for extra discretionary incomes, side hustles are engrained in American culture. But what happens when what a person views as a side hustle becomes much bigger than that? Do you keep that mentality or settle in to a more traditional business approach?
For Michael (Mike) Kirban, co-founder and executive chairman of The Vita Coco Co., New York, embracing the mindset of the side hustle has helped shape the leader he has become today.
“I would say that I’m competitive and I love to win, but not at any cost,” Kirban explains. “It all starts with my philosophy on life which is ‘it’s short, do shit and have fun.’ My greatest leadership strength is hiring good people who I truly enjoy working with and empowering them by setting clear goals and vision of what success looks like. I’m super proud of what I have been able to build with the team. I have always viewed this as a side hustle, and still do, but we just keep moving the goal posts.”
Those goal post shifts can be credited to the company’s year-to-date success. In the company’s 2023 half year earnings, publically released Aug. 2, net sales increased 18% to $249 million, which was driven by 20% net sales growth and 17% volume growth of Vita Coco Coconut Water, it reported.
“Q2 2023 was our best quarter in the history of our company from both a topline and a bottom-line perspective,” Kirban explains. “Some of that was driven by a strong growth in sales. Vita Coco Coconut Water, our flagship brand, is really the engine of our success here. We feel that after 20 years of laying the groundwork, the coconut water category is finally becoming mainstream.”
Kirban credits that mainstream success to people that have been part of this journey.
“Ultimately though, the success of our company is due to the fact that we have a great team, and that we are really focused on offering great products but also innovating and experimenting in our space,” he says.
(Please note that third quarter and year-to-date sales, which are available to view now, were not available at press time).
Indeed, Kirban allocates much credit to people who have helped build The Vita Coco Co.
“The biggest achievement has been keeping and building a great core team and sharing the company’s success with them,” he says. “There were an awful lot of times in the last 19 or so years where we weren’t sure this would work.”
One of those times was when a rival brand was purchased by a beverage conglomerate. But the Vita Coco brand persevered despite this potential challenge.
“[W]e gathered as a team, figured out a plan and executed against that plan,” Kirban says. “A few years later, we were the undisputed winner of ‘The Coconut Water Wars.’”
Beyond winning out in the competition arena, The Vita Coco Co. has experienced other notable celebratory events, including ringing the opening bell at NASDAQ, as well as achieving some important certifications.
“It was pretty great, two years ago, to stand with the team at NASDAQ and ring the opening bell when our company went public and know that, literally with a press of that button, a lot of our team members became owners of the company,” Kirban says. “That was a great feeling.
“I’d also say becoming a Public Benefit Corporation and becoming a B Corp were, personally, big deals for me,” he continues. “I wanted to make sure that as our company grew, our ethos grew with us, and those two milestones will ensure that’s the case no matter what happens in the future.”
For all these reasons and more is why Beverage Industry has named Kirban the 2023 Executive of the Year.
“Ultimately though, the success of our company is due to the fact that we have a great team, and that we are really focused on offering great products but also innovating and experimenting in our space.”
— Michael (Mike) Kirban, co-founder and executive chairman of The Vita Coco Co.
Possibilities for coconut water
Founded in 2004 by Kirban and Ira Liran, The Vita Coco Co. is a modern functional beverage platform operating in a host of categories and subsets, but its flagship brand, Vita Coco Coconut Water, has been the guiding force.
“Since day one, we’ve tried to build a business around the coconut,” Kirban says. “Our core product is Vita Coco Coconut Water and our focus has always been to build the category. We did that by bringing new people into the category, and that’s what drove our innovation and our partnership strategies.”
With a focus to build the coconut water category, Kirban highlights that coconut water has never been more prevalent, and the company has played an active role in that status.
“Right now we are in one in 10 fridges in America, and we hope that we can continue building that share by getting ourselves in front of as many people as possible,” he says. “We have a long way to go but we’re on the right track.”
Kirban notes that consumers’ interest in products like coconut water stem from a greater focus on what ingredients people are putting in their bodies.
“We provide healthier alternatives to conventional beverage brands and sugary drinks that are horrible for you,” he explains. “Coconut water is as natural as it gets. It has hydrating electrolytes and replenishing nutrients and can leave you feeling recharged and rejuvenated.”
Noting coconut water’s popularity in the tropics, Kirban hypothesizes the beverage has the potential to be a multi-use occasion solution on other continents.
“Coconut water is one of the most widely consumed beverages across the tropical world,” he says. “It’s used throughout the day from breakfast to post workout to in a cocktail in the evening. I believe the category is still wildly underdeveloped in North America and Europe.”
This belief plays a key role in Kirban’s aspirations for coconut water and ultimately Vita Coco.
“My aspiration for next year is the same as it was for last year,” he notes. “Introduce more people to this incredible product, share the different occasions [that] coconut water can fit in their lives and eventually to see coconut water become as prevalent in North America and Europe as it is in the tropics.”
Although the development of coconut water in North America and Europe still is in the growing stages, the Vita Coco brand is thriving.
“Our original Vita Coco Coconut Water, or as we call it ‘the blue one,’ is killing it,” Kirban says. “We’re a leading, fast-growing beverage platform, and our core is healthier than it’s ever been. Household penetration is growing, and we’re focused on continued growth.”
And through expanded partnerships, the company has found ways to reach a broader consumer audience.
“[W]ith Vita Coco Spiked and our partnership with Diageo, we realized we could get Vita Coco branded products on a whole set of beverage aisle shelves we weren’t on before,” Kirban notes. “Vita Coco Barista MLK is available in select coffee shops for your morning or afternoon coffee, while Vita Coco Juice is available in convenience stores to pick up during a road trip for a refreshing pick-me-up. This is our strategy to reach more people in more places with Vita Coco.”
As Kirban notes, earlier this year, the brand released Vita Coco Barista MLK with Alfred Coffee in Los Angeles, San Francisco and Austin, Texas, to serve as an alternative to oat, almond and soy milks. “We wanted to offer a non-dairy alternative with clean ingredients that tastes great and froths for lattes,” he says. “Coconut milk is the fastest growing milk alternative today outpacing almond and oat. Vita Coco Barista MLK is also the perfect choice for carb or calorie conscious coffee drinkers.”
But this wasn’t the only collaboration from Vita Coco this year. The company also launched Coconut Water Cold Brew with Bluestone Lane, marking another successful expansion for the brand and category.
“The Coconut Water Cold Brew was one of the Top 3 selling iced coffee drinks this summer at Bluestone Lane,” Kirban says. “The concept of coconut in coffee beverages is a growing trend internationally. We’ll continue to offer consumers new coconut water cold brew options.”
Kirban adds that expansion into more foodservice and on-premise was prevalent for the brand this summer, allowing it to introduce new occasions to consumers.
“We’ve always been available in many grocery stores, most corner stores, delis and bodegas, but until this summer, we haven’t historically been in restaurants, coffee shops, bars or nightclubs,” he says. “It was a summer of growth, introducing Vita Coco into new consumption occasions and with new partners. Be on the lookout for where we’re coming next.”
Beyond coconut water, The Vita Coco Co., is expanding upon the functional beverage space with clean energy drink Runa, sustainable enhanced water Ever & Ever, and protein-infused water PWR LIFT. All of these brands align with the company’s ‘passion for creating products that are better for you and better for the environment,’” Kirban says.
“We’re focused on growing our core through distribution and innovation and adding new customers and households through better-for-you brands,” he continues. “PWR LIFT is harder working hydration infused with protein and well positioned in the functional fitness space, which has taken off.”
Noting the company’s plans for “building the better beverage platform of the future,” Kirban adds that with the core growth of the Vita Coco brand, the company doesn’t feel it needs to rush expansion with the other brands.
But when it comes to the functional beverage market as a whole, Kirban remains optimistic about the future and The Vita Coco Co.’s position.
“We’re in the functional beverage space, and it’s booming,” Kirban says. “According to [Circana], last year the category grew at a rate of 13% in U.S. measured, tracked channels. It is no longer enough to taste great. People want their beverages to do something for them, and coconut water offers a lot in terms of electrolytes.
“We’re also growing with the right consumer,” he continues. “Right now, across the whole economy, the fastest growing groups of people who have spending power are young people and people of color. Coconut water does best with multicultural consumers and young people. People said, especially when we started, that coconut water is a fad. I said it wasn’t and that it would be a long-term trend. I love it when I’m right.”
To reach consumers, The Vita Coco Co. utilizes direct to retail and a DSD network in the United States, with Keurig Dr Pepper (KDP) serving as it largest DSD partner. To support this network the company features a layer of internal sales officials.
“We layer a large internal sales force on top of our DSD network who manage all national retailer account calls and drive a lot of the retail upselling,” Kirban explains.
And because The Vita Coco Co.’s core business imports is key ingredients, the company works diligently to control costs of these materials.
“We spent a lot of the last year fighting high ocean freight costs, and we took some aggressive action to try to mitigate those risks for our company,” Kirban notes. “But ultimately they affected the entire economy. Those costs have to some extent normalized, which is good news that has certainly positively impacted us.”
Leading with options
Although Kirban credits much of The Vita Coco Co.’s success to the team that built and expanded this brand, his leadership and the advice of his mentors should not be underestimated.
“A mentor of mine told me the secret to success was ‘optionality, optionality, optionality.’ He was right,” Kirban explains. “If you create options for yourself, you can do whatever you want. We have been able to build The Vita Coco Co. in a way that has meant we always have a few paths forward.
“We can do whatever we want,” he continues. “We don’t have a corporate overlord that we have to report into, which has meant we can build a business for the sake of building a good business, not around some other larger concept or goal, like exiting for example. When you’re able to create options for yourself and for your company, it gives you the confidence to experiment and take chances without the fear of failing.”
For the future beverage leaders, Kirban offers some tidbits of advice: “Hire slowly and fire quickly” and “Never follow a single path, create optionality.”
As consumers have an abundance of options from which to choose, it looks as though The Vita Coco Co. and Kirban are eager to deliver those functional beverage options.