How Vita Coco founder took on Coca-Cola, built billion-dollar company

This story is part of CNBC Make It’s The Moment series, where highly successful people reveal the critical moment that changed the trajectory of their lives and careers, discussing what drove them to make the leap into the unknown.

Michael Kirban spent five years of his life painstakingly building his business from scratch. Then, his biggest rival struck a deal with one of the most popular brands in the world.

“Holy s—, we’re dead,” he recalls thinking.

Kirban, 48, is the co-founder and executive chairman of The Vita Coco Company, which started selling its namesake coconut water in 2004. After just five years, the business was bringing in at least $15 million in annual revenue, leading the still-nascent coconut water category at the time, says Kirban.

The Coca-Cola Company threatened to abruptly halt that momentum. In 2009, the beverage behemoth bought a 20% stake in Zico, a coconut water brand that launched around the same time as Vita Coco. In 2013, Coca-Cola purchased the rest of Zico outright.

The rivalry between Vita Coco and Zico was already fierce, bordering on dirty. Kirban and co-founder Ira Liran had a choice: Do we find our own big-money partner, or fight one of the world’s biggest companies on our own?

They opted for the latter.

Today, Vita Coco is a behemoth in its own right, sporting a $1.6 billion market cap as of Thursday afternoon. It commands nearly 50% of the U.S. coconut water market, according to the company’s U.S. Securities and Exchange Commission filings.

Meanwhile, Zico struggled to differentiate itself under Coca-Cola’s massive umbrella. It was reacquired by its founder Mark Rampolla for an undisclosed sum in 2021.

Here, Kirban discusses the game-plan he built to take on a giant, how to create your own luck and why he wouldn’t change a thing in retrospect.

CNBC Make It: What was your gut reaction when you first heard that Coca-Cola was buying a stake in your biggest competitor?

Kirban: I was just stunned. Like, I was in shock. I put the phone down, grabbed a bottle of whiskey and a cigar, and went into the bathtub. I remember just sitting there, in this old apartment that I lived in at the time, thinking and thinking and thinking.

Somehow, I went from “Holy s—, we’re dead,” to “How am I going to tell people that work for me?” to “What are we going to do to counteract this? How are we going to remain in business?” to “Holy s—, let’s go and beat the s— out of them.”

I got out of the bath with that mindset. I didn’t know exactly how I would do it. But I’d heard stories when I was thinking about [finding] a strategic partner [like Coca-Cola]. Everybody would say, “You don’t want to do it too early, because there’s a lot of risks. They could not pay attention and you therefore could fail.”

I turned it into: That was going to happen to them, and we were going to keep on driving forward with 100% attention towards building the coconut water category. I started calling the team and telling them: “This is going down, but don’t worry about it. It’s going to work in our favor.”

You could’ve simply put on a confident face for your employees. Was there some self-delusion at play?

100%. There is some delusion, potentially, at times.

But you believe it, right? You believe that you can accomplish this. I think that’s just the way it is — to have that type of confidence and to be able to rally an organization around a goal that might seem far-fetched.

I think that’s what creates success: continuing to believe that you can accomplish what you want, even though everybody else tells you it’s never going to happen.

What was your game-plan for taking on a beverage giant?

The game-plan was just: Fight. How do we grow this business? How do we grow distribution? How do we expand our consumer base?

We didn’t have an answer to that. But around the same time — within weeks, maybe — I was introduced to Madonna’s manager, Guy Oseary. We met for coffee. He had this idea: Madonna loves the product, she drinks it on stage, she talks about it in interviews, we should do a deal together.

I’m like, “An endorsement deal? I don’t have any money to pay Madonna. I don’t have any money for billboards.” I also said, “We need to raise some money, because we’re going to battle with Coke.”

He came back to me the same day with Matthew McConaughey, Madonna, Demi Moore, Anthony Kiedis, Puff Daddy, all of these guys. He put them all together and raised all the money in, like, a day.

And not only did they invest, but they started talking about the brand in interviews, drinking it on stage, all this stuff. We found one of our solutions. This fell in our lap.

You also partnered with North America’s third-largest beverage group, now called Keurig Dr Pepper, a year after Zico’s Coca-Cola deal. You just didn’t trade any equity for it.

That helped a lot, because now we had the third-best distributor — and probably the hungriest because they were the underdog. We went out and built this category. I think we’re still in the early stages of building what will be a really big mainstream category one day.

If you’re focused on something, and it’s all you’ve got, you’ve got to give it 100%. If you work for a big company, you don’t really care: If you sell an extra palette of Coke or Diet Coke, you’re just as well off as if you sold a pallet of Zico, and it’s much easier to sell that pallet of Coke.

Do you ever think about what might’ve happened to Vita Coco without those deals?

Obviously, there’s a lot of luck and timing that goes into any success story. I really believe that.

I would say, however: Creating those moments, that opportunity, is also important. Those inflection points, they don’t just happen.

Every six months, I [look for] the next big inflection point. What’s the next big pillar of growth? What’s the next game-changer for this business? And I focus on achieving that.

Is there anything you wish you’d known at that moment, when you found out about Coca-Cola and Zico?

If I were able to go back and talk to myself in that moment, I wouldn’t say anything — because if I were to say “Everything’s going to be alright,” it probably wouldn’t be.

I’d be too confident. I think I need that sense that failure is possible to be the most successful I can possibly be.

This interview has been edited and condensed for clarity.

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