KO Coca Cola Company

By Isaac Taylor 

Zico Beverages LLC founder Mark Rampolla is bringing his beverage baby back home after seven years apart.

PowerPlant Ventures, a venture-capital firm co-founded by Mr. Rampolla that backs emerging plant-based products and brands, acquired coconut water-based beverage brand Zico from the Coca-Cola Co. and will rename it Zico Rising.

The deal reunites Mr. Rampolla with a beverage brand he created in 2004 after discovering the benefits of coconut water while serving in Central America with the Peace Corps.

He ultimately sold the brand to Coca-Cola in 2013, several years after the beverage giant's corporate venturing arm invested in Zico.

But last year, when Coca-Cola announced it would scrap nearly 200 brands, including Zico, Mr. Rampolla saw an opportunity to rebuild the brand he had created.

"2021 is going to be about making sure we've got the right foundation," Mr. Rampolla said, adding that he plans to re-establish partnerships with retailers and ensure Zico's supply chain is ready to scale.

Although he said he believes Coca-Cola is an amazing organization, he added that he thought the beverage giant's skill set is probably better suited to supporting large, core brands rather than smaller emerging ones.

In the years since he sold Zico, Mr. Rampolla and his firm PowerPlant have gotten plenty of experience nurturing up-and-coming new brands in the plant-based food sector.

"I've had the good fortune over the last seven years to personally invest in [over 40 companies]," Mr. Rampolla said. "We look at about 600 deals a year. What has helped is my pattern recognition...Staying ahead of trends, not only just with products but ways to communicate with consumers."

PowerPlant raised around $42 million for its first fund in 2015 from previous investors in Zico as well as large family offices and institutions. The firm backed 17 companies out of that fund, taking relatively small positions. At least four of those brands have grown into companies valued at more than $1 billion, including plant-based alternative meat brand Beyond Meat Inc., online food retailer Thrive Market and Eat JUST Inc., which produces plant-based egg substitute brand JUST.

The firm's success with its early fund helped it raise a much larger second fund, which closed in 2019.

"Our second fund [closed at] $167 million and that was much more growth capital-like," Mr. Rampolla said. "We're investing out of that fund right now. We'll only make 10 to 12 investments out of that fund."

The firm plans to take more concentrated positions out of its second fund -- typically 20% to 100% stakes -- which is what it has done with Zico, according to Mr. Rampolla.

The fund targets companies with annual revenue ranging from $5 million to $25 million. So far it has backed 10 companies from the second fund, including Zico.

Write to Isaac Taylor at issac.taylor@wsj.com

(END) Dow Jones Newswires

January 14, 2021 07:44 ET (12:44 GMT)

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