Business Monday

Coconut Cartel capitalizes on coconut craze

Coconut Cartel’s is a wholesale retailer of coconuts imported from El Salvador and sold to upscale hotels and restaurants across the U.S.
Coconut Cartel’s is a wholesale retailer of coconuts imported from El Salvador and sold to upscale hotels and restaurants across the U.S. cjuste@miamiherald.com

Company: Coconut Cartel

Service: Wholesale importer of ready-to-drink coconuts from El Salvador, which are sold and served at upscale restaurants, hotels and cruise ships.

Location: Warehouse in Allapattah; 18 coconut farms currently in use.

Years in business: Two.

Management team: Co-founders are a brother-and-sister duo — Mike and Dani Zighelboim, who typically go by the abridged surname Zig. Lena Garrett is director of sales and marketing

Employees: 21 (one Miami-based account manager; production team of 20 in San Salvador, El Salvador).

Major accounts: The Ritz-Carlton Miami Beach and Bal Harbour, Fontainebleau Miami Beach, W South Beach, The Standard Spa and Hotel Miami Beach, Soho Beach House, among others.

Sales: Coconut Cartel ran lean and mean in its first year, employing only its two co-founders, who wore many hats.

“We did everything,” Dani said. “I was taking orders, sending out invoices, all that stuff. Michael was doing deliveries and fulfilling orders. And then after he’d deliver, he’d go home, shower and then go do a brand-ambassador type of thing and service accounts.”

Despite being short-staffed, however, Coconut Cartel did more than $150,000 in sales between September 2013 and September 2014. Sales more than doubled the following year, to about $400,000. The company is projected to bring in more than $2 million in revenue by September 2016, Dani said.

Milestones:

  • January 2013: Incorporated Coconut Cartel.
  • September 2013: The company’s first month of sales was eventful. It gained its first major client, restaurant My Ceviche in Brickell (“Michael just walked in there with a cooler one day and said, ‘Do you mind if I put this in front of your door? I’m gonna come and fill it with coconuts tomorrow,’ ” Dani recalled); served its coconuts at rapper Drake’s album release party in Toronto, exposing the brand to its first crop of celebrity clientele; and embarked on its first strategic relationship with an alcohol brand (Zacapa Rum, a premium rum brand from the Zigs’ native country, Guatemala).
  • Winter 2013: Added Soho House and The Standard Hotel to its list of accounts.
  • May 2014: Partnered with New York-based distribution company, Rainforest Distribution, expanding the company’s logistical reach and resources.
  • August 2014: Signed additional hotel accounts (W Hotels, among them).
  • Summer 2015: Partnership with US Foods, Cheney Brothers and Cisco; debuted at its first food show (Cheney Brothers food show). “We were the stars of the show,” Dani said. “Our booth area was so clogged, they had to shut us down for an hour to navigate foot traffic.”

Keys to success: Coconut Cartel, Mike said, thrives by working somewhat spontaneously. “We don’t push anything down people’s throats,” he explained. “We let the product speak for itself.” But it’s not all spontaneity and good fortune, Dani interjected. “We’re strategic in who we target because our goal is to be an experiential product for hospitality establishments that have certain characteristics.” Coconut Cartel seeks out upscale establishments in hospitality hotspots, like Miami, New York City and, soon, the West Coast, as well as Puerto Rico.

Coconut Cartel also prides itself on the strong ties it has established with farmers in El Salvador who replenish stock each month. The relationships were initially cash-only and bound by handshakes, not contracts, to establish trust. At this point, Coconut Cartel sources its product from 18 farms across El Salvador and has helped to revive the country’s coconut-farming sector, Dani said.

Competitive edge: Multiple factors converge to give Coconut Cartel its competitive edge.

Timing, for one, can be credited for the brand’s initial success. The idea for Coconut Cartel happened upon the brother-and-sister duo amid the coconut craze started by Vita Coco and fueled by consumers’ general desire for “naturally healthy” products, which brought in $223 billion in global sales in 2009, Business Insider reported. Coconut Cartel’s packaging, or lack thereof, makes the product a go-to for health-conscious consumers. “It’s as raw as it gets,” Dani said.

Another timing miracle: the Polar Vortex, which brought New Yorkers down to Miami’s warm climate and sandy beaches in droves. “These people were coming down to Soho House every weekend, miserable that they were living in New York, and what were they drinking by the pool?” Coconut Cartel’s coconuts. Once they migrated back North, the brand’s notoriety traveled with them, facilitating future business partnerships and expansion.

Marketing-wise, Coconut Cartel’s presence in star-studded locales gives the company a leg up. All the advertising work that typically goes into product promotion is done for them, sans solicitation, via celebrities’ Instagram accounts and paparazzi shots. Coconut Cartel-wielding celebs include Prince Harry, supermodel Doutzen Kroes, boxer Floyd Mayweather and Martha Stewart.

The road ahead: A consumer-packaged good is in the works and expected to launch at the end of the first quarter in 2016. The product, Dani said, will be “on-premise heavy” — creating visibility for the product in hotels, restaurants, and other hospitality establishments — so the brand can expand beyond pools and rooftops. The company will also expand into retail and into the West Coast, with new clients in Los Angeles and Las Vegas.

The goal, Dani and Mike said, is to become a product that calls to mind the sensation of being in a tropical locale.

Website: www.thecoconutcartel.com

DEBORA LIMA

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