How Michael Kirban turned a potential disaster into an opportunity
In 2009, the Coca-Cola Company bought a 20% stake in Vita Coco’s rival, Zico, which looked like it might kill the niche coconut water market. However, rather than giving up, Michael Kirban, the co-founder and executive chairman of Vita Coco, saw this as a challenge to overcome. The company had made steady progress since selling its first coconut water in 2004, generating over $15 million in annual revenue after just five years.
The threat from Coca-Cola put Vita Coco in a tight spot. There were two choices: find a big-money partner or fight against one of the world’s biggest companies on our own. Kirban and co-founder Ira Liran decided on the latter and faced Coca-Cola head-on.
The decision turned out to be the right one. Vita Coco is now a force to be reckoned with, reaching a market cap of $1.6 billion and dominating the U.S. coconut water market with a near 50% share, according to the company’s U.S. Securities and Exchange Commission filings. In contrast, Zico, under Coca-Cola’s ownership, struggled to distinguish itself and was eventually reacquired by its founder for an undisclosed sum in 2021.
Kirban reveals that when he first heard about Coca-Cola’s stake in Zico, his gut reaction was one of disbelief, but he quickly shifted to a fighter mentality. After initially being stunned, his mindset changed to inspiring his team to keep pushing forward in the face of adversity.
The company has utilized a variety of strategies, such as partnering with celebrities including Madonna and Matthew McConaughey and linking up with Keurig Dr Pepper, North America’s third-largest beverage group to hold its ground in the market.
Kirban believes that failure is a possibility, and this fuels his determination for success. His ability to focus on creating inflection points in the business has helped it succeed amidst intense rivalry.
When contemplating what might have happened without the strategic moves they made, Kirban credited luck, timing, and the ability to create moments of opportunity. He emphasized the importance of identifying the next big pillar of growth every six months and focusing on achieving it.
In conclusion, Kirban reflected that if he could go back in time and talk to himself when he first found out about Coca-Cola’s deal with Zico, he wouldn’t offer any reassurance since overconfidence could have led to failure. “I think I need that sense that failure is possible to be the most successful I can possibly be,” he said.