Expo West 2018

COCO5 scores $1.5M to expand distribution, production and staff to ensure seamless growth

By Elizabeth Crawford

- Last updated on GMT

COCO5 scores $1.5M to expand distribution, production and staff to ensure seamless growth
An infusion of $1.5 million from new and existing investors announced this month will help Chicago-based COCO5 pursue its mission to bring its lower-sugar, clean-label sports drink to professional and everyday athletes across the US and in Canada.

“In the next 45 days, we will be in two and a half times the amount of doors we are in today,”​ which wouldn’t be possible without the investment from longtime supporters Jim Reynolds and Spiral Sun Ventures, National Basketball Association players Marcus Morris and Markieff Morris and National Hockey League player Andrew Shaw, COCO5 CEO Scott Sandler told FoodNavigator-USA at Natural Products Expo West earlier this month.

He explained that the influx of funds will help the company ramp up production to meet increased distribution and hire additional staff to manage the increased workload.

“We run this company with a very small group of people – probably five to seven who do the job of 20 and now we are finding we need some help,”​ he explained. Specifically, he added, the company is looking to hire someone who can handle the logistics of everything that is “coming in and going out.”

Expanding distribution fast, but not too fast

COCO5’s fundraising success and rapidly increasing distribution is a lot for any brand, but it is especially high for one that originally was not intended for retail distribution.

“We made this product in 2010-2011 for Chicago’s Blackhawks with no intention of going to market. They were looking for an alternative natural product and they were having trouble finding one that was free from yellow dye, red dye, blue dye and some of the other chemicals that are in some of the leading sports drinks. The head trainer contacted me and we worked together to make this – again, with no intention of going to market,”​ Sandler said.

But, he added, when the Blackhawks won the Stanley Cup the year they started drinking COCO5 “it just kind of spring boarded … to the point where we started getting phone calls from grocery store guys”​ asking for the product.

Over the next four years the company slowly refined the product and branding, and expanded distribution, and now it is preparing to launch into grocery giants, including Jewel, Wegmans and Kroger. In addition, it will continue to distribute to Whole Foods, Mariano’s and other smaller retailers, as well as more than 80 professional collegiate teams, Sandler said.

The company also is working with Marsham International Food Brokers Inc. to expand distribution into Canada, which holds “massive”​ opportunity for the brand, he added.

While Sandler says he is excited by this burst of growth, he also is cautious about not over-extending the company. As such, he said, he will hold off – for now – on adding any new large distribution deals.

“We are probably taking a different approach than most. But we are not just running around, trying to sell everyone we can. I’d rather take this nucleus of now three big new customers and work them as hard as we possibly can, support them as much as we possibly can and grow those before we start looking for another customer. And now, for the first time ever, I had to turn down someone because I want to be able to service my customers properly,”​ he explained.  

COCO5 provides demos and merchandising support

One way that COCO5 supports its retail partners – and one way it will spend some of its new funds – is by hiring store merchandisers that ensure products are properly shelved in stores and that retailers have sufficient supply.

The company also “is very big on getting the product into the hands of people to taste”​ through demos, Sander said. “If you don’t taste it – and I don’t care how pretty the bottle is – how are you going to know to buy it? You have got to get in the hand of the consumer. And that is one of the biggest things that we do differently than everyone else: we support the product with demos and merchandising.”

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