CPurpose At Work: How Vita Coco Is Starting A COVID-19 Impact Movement
While the coronavirus has devastated many industries, it has created even more demand for others. One of the positive things we are seeing is that these business leaders are stepping up and giving back. While this provides much needed help to society, it also results in consumer goodwill for corporate givers.
A brand demonstrating such leadership is Vita Coco. The privately-owned coconut water company has been experiencing increased sales as consumers stock up on beverages while they stay in quarantine. Co-founder Michael Kirban is using extra profits to give back to people in need. Vita Coco has committed $1 million to Feeding America and No Kid Hungry. Kirban didn’t stop there. He took to Twitter to encourage other companies that are also benefiting from the crisis to donate their extra profits.
I had the opportunity to talk with Kirban about how Vita Coco is leading a purpose-driven movement to support those affected by COVID-19. Here’s what he shared.
Simon Mainwaring: Tell us about the start of Vita Coco.
Michael Kirban: My best friend and I started it. He moved to Brazil to marry a Brazilian girl we met in a bar in New York. He ended up staying down there. We started the business as a side project. He had a few ideas. I liked the coconut water idea. I said I’d invest and find a way to build the market in the U.S.
It was not a purpose-driven business from the beginning. Our goal was to make enough extra money to travel around and have a good time. He wanted to live off of it in Brazil. We were in our twenties. Then the business started to evolve. We went national in the U.S. We were building a big business in Europe and then eventually in Asia. We started to build a supply chain to support the business. We built factories all over Southeast Asia.
We quickly realized that the communities where we were operating were impoverished. Kids were going to school under a tarp between two trees. Farmers were very poor. They didn’t have knowledge about farming. They just inherited some trees from their parents and grandparents that they were harvesting.
We saw an opportunity to help the communities in which we were producing. We got started on the Vita Coco project, which is our project in these communities. We’ve built about 30 schools.
We’ve also taught farmers how to intercrop. We showed them how to take better care of the trees and plant new seedlings. Farmer families that were making $1,700 a year are now making upwards of $7,000 a year, with some farmers even making up to $12,000 a year. Together, we’re transforming people’s lives. It’s rewarding for us and for our team and a meaningful difference to their lives.
SM: So what inspired you to build the purpose-driven model?
MK: Being there and seeing the impact it could have firsthand. When I was younger, and when I was just starting out with the business, I wouldn’t have considered myself overly philanthropic. However, I was raised by a single dad who taught me to treat others well. He encouraged me to take care of the kid that’s always picked on at school and these types of things. I knew I would have an opportunity to make a positive impact with the business.
SM: How has that mindset helped the business?
MK: We have such commitment from the communities that we’ve supported. They’re not going to be selling coconuts to anybody else. It goes a lot deeper than just a business and procurement relationship. It creates a sense of security for them. Not only are we helping their children, we’re offering them a market for this product that didn’t exist before.
We’ve only recently started talking about it with our consumers. When we first started the programs, it wasn’t about looking for credit, it was about doing what felt right for these communities. I hope consumers will appreciate that, and it’ll add value for them. It’s also had a positive effect on our ability to hire and to retain employees. It wasn’t built to be self-serving, but in the long run it has helped the business.
SM: What insight can you share with others who’ve got similar intentions?
MK: I was on the board of another beverage company that was founded as a purpose-driven business. It focused on creating economic growth for tribal women in Ecuador. They invested so much of their energy and time into the purpose side. They were never able to get the business off the ground. Therefore, they weren’t able to make a difference to the community long term.
One thing that’s worked well for us is that the purpose piece has become more important as the business has become more successful. The business is able to sustainably give back as opposed to a business created with the point of being a purpose-driven business.
SM: Explain what you mean by sustainable impact.
MK: There are thousands of these small family farms. Through our model we’re creating sustainable economic value for them. We’re then going one step further and focusing on education and better farming. The more we grow, the more impact we can have.
I have my own children. I’ve personally been financially fortunate. I see the personal impact it has on me. I have the desire to do more. The million dollar donation we just made to Feeding America and No Kid Hungry was different from the type of stuff we’ve done. We’ve focused on the communities where we’ve sourced from a financial standpoint, like in the U.S. and the U.K. Most of our giving is product donations to food banks and these types of things.
I felt now was an opportunity to really dig deep and take $1 million out of our pocket. Hopefully we start a trend for others in the same position as us whose sales are surging to think about how they can be part of the solution. Things are getting nasty here at home.
SM: You’re challenging other brands on Twitter. How did you think that through?
MK: That came together over the course of a day. That’s the difference between us, a private company run by a founder, and a public corporation. We’re able to do things quickly.
I was sitting on LinkedIn watching our sales team post pictures of all the big displays they were getting at retail, which is great. They get really competitive. But it started to feel tone deaf to me. People are in quarantine. People are losing their jobs. People don’t know how to put food on the table next week. People can’t pay the rent. And we’re sitting here talking about our success.
That’s where the idea came from. We need to do something impactful and help make a difference in the communities being most affected. We need to do it quickly. That’s why we went from the idea to actually announcing it in a day.
Then I had the idea to challenge everybody else. I didn’t really expect other brands to come along with us. I hoped it would start internal conversations. If this little company is able to donate $1 million, Pepsi, Coca-Cola and others should be doing something super significant also.
SM: What response have you seen to that end?
MK: The only company that actually came to us was Nestle. A lot of the others have since stepped up. I called out Netflix that same day after seeing their donation. I’m sure they had already been thinking about it, and then they made their announcement. Pepsi is stepping up. A lot of small or entrepreneurial beverage brands on LinkedIn and other places started pledging how they would help. Things like giving product to local hospitals. I think it prompted business leaders to start thinking about how they can have an impact, whether big or small.
SM: The video of yourself makes it very personal. Do you think that’s going to be normal moving forward?
MK: Consumers want to know more about the brands they’re buying from. It creates a personal relationship. As humans, the more contact we have with one another, the deeper the bond. Consumers appreciate it. It helps build the brand. It helps me feel more connected to the brand.
SM: Are there any plans to expand the impact that everyone is creating together?
MK: Employees are able to take a small percentage of their paycheck each year and put it towards a project. The company will additionally match anything the employee puts in. Everybody feels like they’re helping. We’d love to get some results from the organizations that we’re providing this million dollars to. We can then share that internally and possibly externally.
SM: What advice would you give to a brand that’s sitting on the sidelines?
MK: Giving back actually will increase your profits in the long run. Maybe this quarter or this year you’re going to have to take money out of your pocket. Over the long run your business will be more successful, more sustainable and larger if you give back to the places that make the most sense for your business and your consumers.