Raw C entrepreneurs; Dennis Ghetto (left) and Scott Mendelsohn (right)

Carving a point of difference in crowded coconut market

It’s an ‘it’ product in certain circles, and just like any other type of beverage, there’s the good, the bad, and the just plain cheap n’ nasty.

Coconut water is of course hardly a new drink, but in Australia the category has boomed in recent years, growing some 150 per cent year-on-year.

The growing popularity of the slightly salty, slightly sweet beverage did not go unnoticed by Sydney entrepreneurs Scott Mendelsohn and Dennis Ghetto, who launched their brand Raw C in January 2013.

With celebrity chef and My Kitchen Rules judge Pete Evans investing in the business shortly thereafter, the brand has carved a niche for itself in a very crowded market. Indeed there are more than 20 brands operating in Australia alone.

But as Mendelsohn and Ghetto tell Dynamic Business, the sustainability of their brand rests on close quality control, and using single origin, young green coconuts. Sourced entirely from Thailand, the coconut water undergoes a pasteurization process, as required by law, and is then bottled and shipped.

“We saw a gap in the market in terms of a coconut water that was just a pure product, with no additives – namely added vitamin C or sugar. We just basically crack it open and bottle it, hence the name ‘raw’,” Ghetto says.

Although coconuts are also a versatile fruit in terms of yielding both the flesh and the husk, Mendelsohn and Ghetto do not on-sell the coconuts. Once the water has been extracted the husks and flesh are used by locals on a contra basis.

“The flesh gets used for various things, people make ice-cream and yoghurt out of it locally, and the shell itself can be used in place of charcoal. So there’s a range of uses, and we don’t get directly involved with that but we certainly make it available for other uses,” Ghetto says. “We’re happy for that investment to go back into Thailand, and for people to make their money by getting that raw product for free from us. We’re just not interested in getting into the other product possibilities,” Mendelsohn says.

The calm demeanor of this entrepreneurial pair belies the young age of their business. Although only in operation since January 2013, the business is already profitable and is projected to turn over $3 million in revenue this year. In no small part, this early success is down to down to their combined years of diverse experience.

Having worked for fifteen years as the chief financial officer in a fast moving consumer-goods company, Ghetto handles the ‘back end’ of the business. Mendelsohn works on ‘front end’ sales, marketing and public relations, drawing on his five years at Macquarie Bank, and six years working in clothing manufacturing in China.

“We’ve got a good set of skills between us, I look after a specific set of areas, and Scott looks after a specific set of areas, and there’s no crossing over,” Ghetto says. “So I think that balance is really good – because what I don’t do, he does, and what he doesn’t do, I do,” Mendelsohn says.

Having met via an old school friend two years ago, both were looking for a new business venture, and Raw C was born. Alongside the backing of Evans, Raw C is now being exported to Japan, and soon to South Africa and Kuwait. But as Mendelsohn attests, “it doesn’t just happen, it’s all come about through a lot of hard work and long hours.”

“Social media has been really important for us, and we don’t have stupid amounts of money to throw at marketing and mainstream advertising, which ultimately gets lost a lot of the time unless you have a really big, national campaign,” Mendelsohn says.

As to the volatility of trading in a natural product at the mercy of offshore political and weather conditions, Mendelsohn says planning months in advance is integral. “Ultimately hindsight is a great thing, but nobody is ever going to be able to sit down and say they’ve never made any mistakes. One thing though that we could have controlled better along the way was our forecasting, but then again we didn’t expect to grow as quickly as we did, and we’ve learned a lot.”

Ghetto adds they’ve been careful to spread out the farms they work with, ‘as far away from each other as possible, so we can use a different port if need be.’

A strong fan base on social media indicates the future is looking strong for Raw C. Updating their Facebook page with daily recipes and content relevant to their consumer demographic also opens the door to regular feedback, and brand engagement.

With a wife and four children, Ghetto says his secret for getting through the work rests firmly in being organised, but also flexible.

“It’s extremely tough but I’m generally up pretty early, about 4am before the kids are up, and we use a cloud-based system so it’s easy to respond to emails and see everything in front of me. It’s more about being organised and we have weekly meetings to touch base, and also meetings at night if we have to,” Ghetto says.

“When you go into your own business you know that you’re giving up time with the family and friends, and especially at the start of the business. You’re a jack of all trades, and like Dennis said it’s about being organised, and there’s really no escaping the 16 hour days, 7 days a week at the beginning,” Mendelsohn adds.

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