277. From Locker Room to National Retail: How Coco5 Scaled an Athlete-Owned Hydration Brand

0:01Welcome to Startup to Scale, a podcast by FoodBevy. I'm your host, Jordan Buckner. Join me as I talk to aspiring entrepreneurs, seasoned industry experts, and everyone in between as we unlock the keys to growing from startup to scale.

0:19Today's guest is Marc Doggett, who's the CEO of Coco5, an athlete-owned hydration brand backed by NBA legends and stars including Charles Barkley, Devin Booker, D 'Angelo Russell. Mark has spent nearly two decades helping build some of the biggest names in sports nutrition and functional beverage, including Liquid IV, Glambia Performance Nutrition. In this episode, I want to invite him on to discuss what it takes to build and scale a beverage brand in today's market, why Cocoa 5 is expanding beyond traditional grocery into new channels, and lessons from launching the first new flavor in 15 years, and the whole story.

0:55So there's a lot to get into here, Mark, but welcome to the show today. Thanks for having me, Jordan. Excited to be here. Of course, of course. So, you know, I've known Coco5 for a long time now. The brand actually started out when I was launching my brand, T-Squares, back in the day. And so I kind of saw the brand kind of coming up in Chicago and expanding out from there. But for those who don't know, I'd love for you to just share a little bit about like the story behind the brand and what made you believe in coming on to this brand.

1:22Marc Doggett:Yeah, you know, Cocoa 5 is a special brand in the category in itself. Just by the way we got started, the brand was actually a fill-in for a local hockey team in Chicago. And they were all using another source of hydration formula. And they didn't really like the taste of, you know, the product that they were currently using. So the head trainer introduced them to coconut water as it being a great form of hydration. And they definitely didn't like the taste of coconut water by itself. So it was not a favor of the team. So our founders, Scott Sandler and team, had actually formulated Cocoa 5. It still delivered the same amount of electrolytes that team would need to perform well, but it hit on taste.

2:03Marc Doggett:And from there, the brand in itself just exploded in the marketplace in terms of growth. It's a local market within the Chicagoland area. The product in itself is, like I said before, is an amazing product. It uses 26 % coconut water in the formulation to deliver the five electrolytes, five key electrolytes, hence the name Cocoa 5. So it delivers the five key electrolytes. But the biggest thing is it delivers on taste as well. So you're not getting your everyday coconut water, which is fine, but you're still getting the hydration benefits and getting a refreshing drink at the same time. Yeah, I mean, I think that's key.

2:36And, you know, as you all know, building a sports nutrition beverage in the market is exciting, but also really challenging. Right. Just like you can paint against some really big names out there. But you've helped scale brands like Liquid IV and Glambia Performance Nutrition. So I'm curious, what are the biggest differences that you've experienced kind of building a beverage brand today versus five or even 10 years ago?

2:58Marc Doggett:You know, that's a great question. And for those who are listening, it is a much different market than it was five, 10 years ago. The consumer five, 10 years ago was a little bit more forgiving in terms of what they're putting into their bodies in terms of natural ingredients. If it had natural ingredients in it, great. Some of them were really willing to pay a premium for natural ingredients. So we were able to skirt around that a bit. But I think, you know, what still remains in the space today that was there then was the integrity, right? And consumers were big on integrity, being able to read labels and make sure that they could pronounce the ingredients that were in their bodies, that they were putting into their bodies.

3:34Marc Doggett:Level that out and found the right formula. It really, you know, those brands really had an opportunity to take off versus today where the consumer is a bit more educated about what they're putting into their bodies and are looking for those brands that have the premium ingredients in them. And the integrity, which we talked, which I just talked about, that was there 10 years ago, is even more magnified now because, you know, so you can read about these ingredients on social media and you can, you know, hear about them on a news segment every day. And, you know, it's at the forefront of our government as well in terms of making sure that, you know, some better for you items are in the marketplace to date.

4:07Marc Doggett:So I think that consumers and children alike, where 10 years ago you probably had the average person that was consuming products and really cared about that was probably, you know, 20 to 21 years old and above. Now they're starting younger, where you got a lot of kids that are, you know, 12, 13 years old that are into youth sports that are cognizant about what they're putting in their bodies. Yeah, you know, that's always really interesting, too, because, right, on one hand, sometimes it's the parents driving like, hey, what is it that you're drinking? What are my kids drinking? but at the same time kids are getting more educated on the actual ingredients nutrition and questioning what's in there and you know taste is always one of the number one factors that's going to get someone to come back and purchase again right you can have the healthiest product but if it doesn't taste good then no one's going to actually come back or want to drink it and so i'm kind of tears right because the drink has to span this wide audience of the top professional athletes but then also you know maybe young adults young kids who are aspiring athletes as well.

5:06How do you kind of think about the formula, taste, and all that to appeal to those groups?

5:11Marc Doggett:Well, you know, I think the most important thing is for kids to do it right. And doing it right is, you know, always make sure that, you know, what you're putting into your body is the right thing for you. So check with mom, check with dad, make sure that the doctor as well, and make sure that it's suitable for you. Our product is in a natural state, so we're confident in that, I think that most of the consumers in today's marketplace are just wanting to find a brand that they can be comfortable with. And I think, you know, for us, it's making sure that the ingredients in itself are things that we would consume.

5:45Marc Doggett:We go through a series of tournament testing when launching new flavors and making sure that the consumer will resonate with the products that we're putting into the marketplace as well. And then we're always, you know, looking to find new areas in which we're starting to see a younger market trend towards. So, you know, that's very important to us because those 12, 13, 14, 15 year olds will someday be 21 year old adults making decisions for, you know, not only themselves, but for their parents as well. What we find though, which is interesting, Jordan, is that 70 % of our consumer base is female.

6:17Marc Doggett:And, you know, there's, there's reasons to believe why that is, but, you know, we're, we know that, you know, in a grocery store setting that mom does most of the shopping. And we know that if choosy mom chooses Coco 5 because she believes in the brand, then it helps with the family usage occasion of the product as well. So as much as we love to give the credit to some of the younger generation in terms of making a decision, it's really mom that's making sure the better for you products are in the household and in lunch boxes and in playgrounds at schools. Yeah, no, I think that's definitely key.

6:50And so, you know, Bark, I'm always curious, right? Like you, when you joined the brand, like what's excited you about coming on to this product, growing it, and how have you started to put your own personal kind of take on where the brand should go?

7:05Marc Doggett:You know, you mentioned earlier about our ownership group and who they were, and you know, I'd be lying to you if I didn't say that, you know, that was an attraction, you know, in terms of, you know, how do you get into this brand, right, that has all this great star power. But once I picked up the bottle and I tried the product and I was able to look at the ingredient profile in it, that became an oh, by the way, right? You know, you're looking at a product in itself that has brand and label integrity. And that doesn't happen much, you know, in any space. Well, you'll have some brands that will say that they have, you know, natural integrity inside their product.

7:38Marc Doggett:And then there's some little outliers and some sneakers inside of there as well. I think the accreditation from the American Cancer Society was another driving factor for me as well. They don't just give anybody an accreditation in terms of letting their logos live on the side of your bottle. That meant that there was some really heavy research inside of the brand itself. So that drew me into the brand. The contents inside the bottle, the celebrity ownership group, more importantly, the accreditation from the American Cancer Society were the things that really drew me in. And so when I was able to come into the organization, it really became an opportunity for us to get the brand out into as many miles as we possibly could.

8:21Marc Doggett:And that was the focal point for us. So the easiest thing to say is let's go scale the brand as quickly as we possibly can and dump it into as many stores as we can, as many doors as we can. But that wasn't the right strategy for us. The right strategy for us was to use the celebrity ownership that we had in a manner which nobody ever has. And we kicked off in February, started with the organization in January, kicked off in February with a huge celebration during All-Star Weekend, NBA All-Star Weekend in L.A. with our partnership with the Hyatt Hotel chain at the Andaz Hotel. And that was really our launching pad to get consumers to try the product, boost social media engagement.

9:01Marc Doggett:We had activations. We had street teams out. We were passing out product. We were driving around in our wrap van. And then that spread around many different cities around the country as we continue to just try to build more brand awareness and really get consumers to try the product. Yeah, I mean, I think that that sounds like a lot of fun. Like launch it and do all that as a way of like getting on to the world. You know, with the brand kind of been around for a while, when you came on, like what were some of the biggest potential challenges or obstacles the brand was facing? And how are you taking about kind of solving that?

9:35Marc Doggett:Yeah. You know, the brand itself, just like every brand, you know, you'll hear, you know, our chairman, Mr. Jim Reynolds, say quite a bit that, you know, when you're starting out, you lose money. Right. And there's a lot of money that you're losing inside of an organization because you're trying to get branding right and you're trying to get, you know, your packaging right. And, you know, there are a lot of failures that you will have inside of the retail space as well. Right. And you're trying to scale again, you know, a sea of sameness, if you will, in terms of the hydration formulas. formulas and certain hydration sets.

10:06Marc Doggett:And I think that was one of the challenges that we were facing was, hey, there were some headwinds and some adversity around some of the losses that we had prior to the organization coming, prior to the executive team coming to the organization. How we were able to solve for that is we went out and got a team and an executive team that had, you know, combined 120 years of experience in building beverage brands. And I think that's what it really takes in order to have that type of success is making sure you surround yourself with the right people that come with relationships as well. So I think that was one of the biggest things that we had to solve for was how do we compare ourselves to the past and remember the graveyard, but move forward, right?

10:47Marc Doggett:In terms of, you know, having the new leadership team in place and utilizing relationships to not only talk about this great brand, this great formula, but this great ownership as well. You mentioned taking the path of, you know, growing the brand and different distribution channels beyond grocery even. So, you know, tell us to me about the strategy around expanding Coco5 into other channels like hospitals, travel, hotels, maybe specialty, wellness retailers. You know, what kind of opportunities do those channels create for you? Yeah, you know, one of the things that we recognize and just being in the space for as long as I have is that, you know, hydration doesn't stop at the gym, right?

11:23Marc Doggett:And most individuals, when you look at a hydration formula, you think you have to have some type of workout in order to be dehydrated. But in fact, you know, in some cases, you know, in the Chicagoland area where you're more dehydrated in the wintertime than you are in the summertime. But we knew that there were different uses occasions that the product would offer. And so, you know, some of our partnerships with on-premise inside of hotels offer just that for those individuals who were vacationing in the sun and, you know, needed more hydration. And for those individuals that were traveling through airports, we were fortunate enough to have partnerships inside of the 14 different airports to date, you know, where we offer our hydration product inside of it.

12:02Marc Doggett:And then there are hospitals and opportunities there, right? We're currently working back with a big partner of ours to look at inpatient care inside of hospitals when you think food first opportunities inside of hospitals. So, you know, there's many different opportunities for, you know, where this particular product or COCO5 could be used. And we want to make sure that we're hitting on all angles there. Yeah, I think that's exciting. And I think, you know, one of the new retailer partnerships you just launched with and launched with is Costco, right? You just wrapped up a road show and you're going to be launching within Midwest Costco region, which is extremely exciting.

12:38Tell me about how that all came together.

12:40Marc Doggett:Yeah, you know, that's a dream, right? Is, you know, for brands, you know, Costco is kind of the mecca, right? And you kind of want to get there, you know, but you want to be careful in terms of how you get there, right? And, you know, when we came on board here, this executive leadership team had a ton of experience in working directly with Costco. But we knew that we had to prove it first. So we proved out our model through road shows at Costco. The consumer absolutely loved the product during our road shows. We did five of them. And that's a lot of road shows to do. For those who don't know what a road show is, you're picking up and you're moving from city to city, you know, to get consumers to purchase the product inside of Costco.

13:19Marc Doggett:And those are long days. You're like talking the whole time. The whole time you're talking. We had an amazing team that did an amazing job inside those roadshows. And because of that, we were able to land into 112 Midwest stores inside of the Costco ecosystem with opportunities to expand in other regions. So Southeast and LA and San Diego and Northwest are all at the top of mind for us right now. So it's an amazing opportunity for us as a brand. Yeah, I mean, that's exciting to think, right? Like Costco, one, you're moving volume, but two, you can reach a lot of consumers and become part of that habitual purchase, right?

13:56So someone's, what pack size is you selling in Costco?

13:58Marc Doggett:Yeah, so we're doing a variety pack size and it'll be an 18 pack. And, you know, it will feature our new grape flavor, which we're very excited about. So it'll be available July 6th is when product will start to ship into stores. Yeah, right. And then when you're putting an 18 count case in someone's home, either that's someone drinking Coco 5 every day or family of however many people drinking it throughout the week. And that purchase consumption, right, it just drives that behavior change where it's great if someone picks up one bottle. But if they pick up 18, most of them, they're going to go through 18.

14:31And sometimes, especially in this space, right, it's the habit of doing something every day that really drives that behavior adoption. So I think it's, you know, beyond just the initial volume, you're creating, you know, loyal customers and fans just through the drinking occasion.

14:46Marc Doggett:Absolutely. Yeah. You get an opportunity to really become part of the trusted family of Costco. Right. I mean, consumers trust Costco and we're a trusted partner, trusted brand inside of Costco. So we're really excited about that opportunity. And, you know, you know, for what it's worth, I mean, like it's like I told you earlier, one of the things that really drew me to the brand was an opportunity that they had with the American Cancer Society and a nickel of every bottle that's purses goes back towards cancer research. So not only do you get a better for you opportunity inside of Costco, you get an opportunity to do good, too.

15:18Marc Doggett:So I'm really, really proud and excited for for that opportunity inside of club. Yeah, I think that's really exciting. You know, one thing I'm always curious about is that athlete-backed brands are kind of growing everywhere today, just celebrity-backed brands as well. For you and the team, how do you think about leveraging the partnership with some of the athlete owners in a way that creates long-term value beyond just, you know, initial headlines? Yeah, you know, that's a great question. And it's funny you say that, right, because there are a lot of brands in the marketplace that are athlete-backed or endorsed.

15:51Marc Doggett:Our product is athlete-owned, right? So these are actually owners of the brand. So Charles Barkley will appear, you know, and make sure that he is talking about the brand. And we were just at an event in D.C. with Michael Wilbon, where, you know, he was actually standing at the booth with us and working. And Derrick Rose is involved in doing some of these Rose shows in which we're doing, getting out there, shaking hands and talking through and talking about the product. So it's a little different when you're when you have an ownership group, even a Richard Denon and Otis Wilson here in Chicago.

16:22Marc Doggett:They're always out and about. But it's a little different when you have a group that owns the brand and loves the brand and willing to work hard for the brand versus just sitting in a photo shoot and taking some photos and saying, drink this particular formula. So we've used them. They've used us and we've used them. And the matter in which we use them has been just help us to get out and talk about the brand that they love so much. Yeah, I mean, I think that does make a big difference, especially when it's a product that they themselves can drink that's aligned with who they are and what they do.

16:55Right. Like if you have a celebrity brand where someone might own something, but they don't use the product or it doesn't really make sense of what they do, it's not going to lead to as much, you know, sense for the consumer. But if it's like, hey, these are athletes who are investing in this product that they themselves consume, drink for their own performance, you know, something that they're putting their weight behind because they actually believe in how it affects them.

17:18Marc Doggett:Absolutely. I mean, Devin Booker has a refrigerator in his basketball court full of Cocoa 5. We deliver there quite a bit. And Charles Barkley is, you know, always drinking Cocoa 5. Inside of that mug, it's not coffee. It's Cocoa 5 inside of that mug. And DeAndre Russell is constantly, I don't know if you've seen his clips on ESPN, but he'll come on and remove the other beverage off the podium, put Cocoa 5 in. And then Charles Barkley and Devin Booker will have some Cocoa 5 banter back and forth on national television around, hey, make sure you get your Cocoa 5 after your game, you know. So it is cool to have that ownership group that believes and actually does consume the product on a daily basis.

17:59Yeah, that makes a big difference. So looking ahead, what do you believe is going to separate Cocoa 5 from the other kind of beverage brands over the next, you know, five years as you continue to get that retail success? Yeah.

18:13Marc Doggett:Innovation. Innovation is going to be the key for growth, right? And innovation with integrity and continue to use, you know, natural ingredients from natural sources. And I think we, you know, when we started with the organization, our innovation pipeline was non-existent. But because you bring that much experience with an executive leadership team, innovation pipeline has grown to five years, right? So now we're looking at a three to five year outlook in terms of what's next. And, you know, we're excited about new flavor systems. We're excited about, you know, new opportunities with added ingredients and cognitive benefits.

18:46Marc Doggett:You know, there's opportunities there for us. And then just continue to expand within those on-premise locations that we talk through. So hotel chains and airport opportunities for us and continue to do good inside of hospitals and use research that we've been working back with our partners to make sure that, you know, it's better for you. Options are available for those individuals that need it. So I think that's a big part of our growth is just continue to innovate both on-stand and marketplace. place. I like that. Mark, thanks so much for being on the day, for sharing the story of Coco5 and where you are today.

19:20I'm excited to see where the brand continues to grow under your leadership.

19:23Marc Doggett:Thanks, Jordan. Appreciate you having us.