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/ Winter 2021/Issue 105

Super Coffee’s high-energy disruption

CEO Jim DeCicco explains how the ready-to-drink coffee startup is eliminating sugar, doubling down on purpose, and fueling growth.

A version of this article appeared in the Winter 2021 issue of strategy+business.

This interview is part of the Inside the Mind of the CEO series, which explores a wide range of critical decisions faced by chief executives around the world.

The number three bottled coffee drink in the US was first brewed in a college dorm. That was back in 2015, when Jordan DeCicco—the youngest of the DeCicco brothers—was a student–athlete at Philadelphia University (now part of Jefferson University) searching for a different kind of energy drink. When he couldn’t find it, he made his own, and soon partnered with middle brother Jake, who was a junior at Georgetown, and eldest brother Jim, a recent Colgate University graduate working on Wall Street. Today, Jim, 28, is CEO of Super Coffee, a startup with a US$500 million valuation; $55 million in sales in 2020 (up from $4 million in 2018); and big-name investors from Hollywood and professional sports such as Jennifer Lopez, Alex Rodriguez, and Aaron Rodgers.

Super Coffee isn’t just differentiated by its origin story. The brand (which is sold by parent company Kitu Life) has gained a loyal following by offering a health-conscious alternative to the traditional sugar-laden energy drink. Super Coffee is naturally sweetened with monk fruit; it is also organic and keto-approved, containing MCT oil from coconut and lactose-free protein. The DeCicco brothers, who all played high school and collegiate sports, are on a mission to reduce people’s sugar consumption. They feature a “counter” on their website that tracks the number of pounds of sugar (currently 4.4 million) removed from the American diet as a result of people choosing Super Coffee over a competitor.

The last few years have been marked by hyper-growth and increased visibility. In 2018, the brothers appeared on Shark Tank, but failed to make a deal; in 2019, they were named to Forbes’s “30 Under 30” list. Super Coffee now sells a variety of other products, including creamers, pods, and ground coffee, and continues to introduce new ingredients and flavors. (Jim DeCicco’s favorite? Smooth mocha, or, as he describes it, “the first out of the dorm room.”) The company recently moved its headquarters to Austin, Tex., and raised another round of funding. In an interview with strategy+business, DeCicco talked about growing and scaling the business, what he’s learned along the way, and what the company is planning for the future.

S+B: Entering a category with established players like Starbucks and Dunkin’, how did you differentiate your brand?
When we started in the dorm room, we really wanted to be the healthy alternative to the [ready-to-drink] Starbucks Frappuccino—but that bottle is on every shelf. We still have a long way to go. In the US, Super Coffee is still available to only 40% of consumers; the Frappuccino is available to 99% of consumers. People buy what’s there, whether they want to or not. We want to empower them with a choice.

We wanted to create something that tastes good, is good for you, and gives you energy. All the other products on the market just tasted good. We realized that we couldn’t ask our customers to sacrifice flavor for health—we wanted to provide both.

S+B: What was it like running the business in those early days?
There is a barrier to entry in the food and beverage industry. Stores will only carry your products if you have a distributor that delivers them, and distributors will only carry your products if you have stores that will bring them there. When we started, we had neither of those things. And manufacturing facilities require distributors and stores, as well, because there are minimum orders.

We started by making every product by hand. We found a makeshift bottling line in the back of an old Domino Sugar factory in Baltimore, which is ironic because our products are sugar-free. The owner rented us the space to use after his last shift ended at 8 p.m., and before his first shift started the next day at 6 a.m. All the grocery stores in the DC area opened at six or seven in the morning, so we would make product all night, load it into the van, and we’d basically do rock–paper–scissors to see which brother would make the deliveries.

It was a grind. But it was the only way we could get started. We didn’t have money for other options. We controlled what we could control, and that was making the product, making the deliveries, and stocking the shelves. We learned quickly how to win in a grocery store because we were there every day—we wanted that premium placement.

S+B: You pitched your company on Shark Tank in 2017. Can you tell us a bit about that experience?
Shark Tank was our big break. We filmed 18 months after we started the company, so it was pretty early on. We were asking for $1 million for 10% of the business, and the previous year, our sales had been only $200,000. It was a ridiculous valuation—$10 million—at the time, and, ultimately, we didn’t get a deal with any of the sharks. We didn’t even get an offer. We were disappointed: as athletes, we felt like we were losing the national championship on television. But we were also motivated, so we got back to work.

The episode aired in February of 2018, and we used it to our advantage, building displays in stores, telling investors about it—the show introduced the brand on a national scale. When we closed our Series A [financing] in December of that year, we raised $15 million at a $50 million valuation.

S+B: Looking ahead three years from now, what is your vision for Super Coffee?
We recently raised another round of funding, and that’ll give us the capital to fuel the next three years of growth. And we want this brand to live on for decades after we’re done with it, whether that means partnering with large, established brands and putting it into their system, or going public.

I think these past five years, we’ve done a great job with sales execution, and we have good products. We’re the third-largest bottled coffee brand in the United States. But we have a lot of work to do when it comes to creating that emotional connection in the minds of consumers, and when it comes to building the brand. Our brand awareness ranking is 4%. That means 96% of Americans have never heard about Super Coffee. The way we look at it: we’ve got good sales, we’ve got a lot of traction, we have loyal customers who buy our product. And with that, we have so much opportunity to get the brand out there.

S+B: Did you see any shifts in terms of sales during the pandemic? Was there more demand for online purchases?
Five years ago, beverages were mainly sold in stores. When Bai sold to Dr Pepper in 2017 for $1.7 billion, 3% of Bai’s sales happened on the internet. Right now, 20% of our revenue is generated online, and 80% is in stores. I imagine keeping that ratio, or maybe even growing e-commerce to 25% or 30% of revenue. But the bottom line is the world—and shopping habits—has changed in these last 18 months. Grocery stores aren’t going anywhere, so we still need to win there first. But I think we have a lot of work to do to improve our e-commerce and our online business.

The channel that was decimated last year was the convenience store–gas station channel, because there were no commuters, there was no grab-and-go business—and 49% of bottled coffee sales traditionally happen in the convenience channel. But because we’re still a nascent business building out our distribution, we have only 5% of our revenue coming from convenience stores. As a result, the loss of that channel didn’t hurt us that badly. In contrast, we were 60% grocery last year. And even though people were shopping less in stores, they were buying more on each visit, so we benefited a little bit from being in grocery.

Looking ahead, we’re treating international sales as white space. It requires so many resources just to win in the US that we’ll save international for a couple of years down the road. China drinks five times more bottled coffee than the US, so it’s really tempting, but we have to stay disciplined.

S+B: Do you have plans to introduce additional product lines?
Right now, we’re going to stay within the categories that we’re already participating in. Our ready-to-drink coffee bottles and cans make up most of our revenue. And then the creamer line also does really well for us. We’re excited about creamer,because it’s a bigger category than bottled coffee with far fewer players. Nobody’s disrupting that category yet, so we’ve been able to enter with sugar-free products, and vegan and plant-based options, all enhanced with protein, which more and more consumers are looking for.

Last year, as a response to COVID and with at-home consumption through the roof, we launched our K-Cups and our grounds that are loaded with vitamins and antioxidants for immunity-supporting benefits. It’s all a lot for our sales team to manage. The brand has power to translate to other products, but I don’t see us doing that in the next few years.

S+B: Will there be a Super Coffee shop?
Although retail probably won’t be until 2023, I think it’s a necessary part of our expansion. We’re the only top-selling bottled coffee brand that doesn’t have a [brick-and-mortar] store. When I see that orange bottle of Dunkin’ Donuts on the shelf, I smell a Boston cream donut. We don’t have that experience to offer people yet.

But we don’t want it to be a regular café. We have a couple of pieces of technology that we’re working on, for example, a robotic barista that makes six cups of coffee per minute. We’re also working with students at MIT who found a way to convert sugar into electricity. We’re a couple of years away from it, but we want to be able to say that the sugar we’re removing from the American diet is powering the electric baristas in our cafés.

S+B: What about new flavors—how much of your innovation comes from customer feedback versus experimenting in the lab?
It’s a little bit of both, but most of our innovation comes from [my youngest brother] Jordan’s vision. When Henry Ford created the automobile, people weren’t asking for a car; they were asking for a faster horse. If we asked our customers what they wanted, they might say, “We want s’mores flavor.” They just come up with things that they’ve seen before. We need to figure out what people want that they don’t know they want.

Our blueberry latte coffee was the most innovative flavor that we’ve come up with, because it’s a bit of a departure from the most popular bottled coffee flavors like vanilla and mocha and caramel. The blueberry latte did so well that it inspired us to come up with an entire breakfast line of flavors. In January 2022, we’re coming out with blueberry muffin and glazed donut and cinnamon bun. Of course, everything we make is sugar-free, so that’s the tricky part: creating those indulgent flavors that typically would have 50 grams of sugar or more by using monk fruit or alternative natural sweeteners.

S+B: You mentioned Jordan’s role as innovator. What is it like running a business with your brothers?
We couldn’t do it without any one of us, because our skill sets are so complementary. I handle investor relations and marketing because that’s what I’m passionate about. I enjoy networking and finding the right people to solve problems. Jake is sales. He can sell anything to anybody. And then Jordan is this quirky tinkerer and operator. He creates the new products, Jake sells them, and I make sure we have the money to do it.

I know plenty of solo founders, and they don’t have the benefit of what we have—of that built-in trust and love of family. Because at the end of the day, if this doesn’t work out, we’re still brothers and best friends.

S+B: And the challenges?
Starting, one, as a family, and two, as a very team-oriented culture, we built close friendships with the people that we work with. Now that we have more than 110 employees, naturally, we’re going to be closer to some people than others. I think that comes with inherent whisperings of nepotism. “So-and-so’s in his position because he knew the brothers.”

The best way to combat that is to really think of ourselves, for lack of a better term, as bosses rather than as friends. There have to be clear boundaries. The other piece of it is being very clear about our principles and guardrails so that subjective bias can’t come into play.

S+B: What other organizational changes have you implemented as you’ve scaled up?
We employ a lot of young people, who tend to have aggressive expectations when it comes to promotion. This might be a generational thing, and it might be because the three of us are young leaders so people naturally think, “If the brothers can do this, I can too.”

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We just hired a VP of people operations from Whole Foods to help us establish formal HR systems. For example, what do compensation structures look like within each band: manager, director, VP, and above? What specifically do you need to achieve to get a promotion? It’s not that we were wrong because we didn’t have those things before; it’s that they hadn’t been built yet. We’re still building this business together.

Jake, Jordan, and I share an executive coach, and we do one-on-one sessions and group sessions. We also have a great group of investors and advisors around the table. I think that’s one of our biggest strengths as leaders—we know that we don’t know everything, and we’re not afraid to ask for help. We’re truly eager to learn from everybody. At the same time, if as a leader you’re not clear about where you’re headed or where you want to be as an organization—from a revenue standpoint, a product standpoint, an ethical standpoint, a cultural standpoint, and so on—then you’ll waver. Getting that input and advice from many different sources informs our ability to make our own decisions.

When you start a company without experience, you have no choice but to get the most out of every hour. I say all the time that one year working in a startup is like five years anywhere else, in terms of the amount of time and energy and lessons learned and mistakes that you make. We’ve grown up a lot.

S+B: What have you learned about creating a diverse and inclusive organization?
Our diversity journey started back in 2018. We had about 20 employees then. In the early days, we didn’t have the ability to recruit talent; we just brought in people who were willing to do the work. And a lot of those folks looked like us. They were young white guys, sometimes college teammates, people that we knew worked hard and were loyal. But as the team reached that 20-person size, I realized that we needed to address this.

If as a leader you’re not clear about where you want to be as an organization—from a revenue standpoint, a product standpoint, an ethical standpoint, and a cultural standpoint—then you’ll waver.”

We hired an ethicist, who was my college philosophy professor, to help us define what is important, what our values are, and what we want this company to stand for. We agreed that diversity is a necessary part of a successful business, not just to check boxes, but because we want diverse ideas. If we all look alike and we all come from the same place, we’re all going to think the same things. In the interest of building the best business possible, it pays to have a diverse team. This should be table stakes for all companies. We also became a signatory to CEO Action, which has helped, because I know I’m not alone in this. I can collaborate with other CEOs and founders to learn what they are doing to solve problems, what forums they have created, and so on.

In the summer of 2020, at the height of the social uprisings following George Floyd’s killing, we brought in a diversity and inclusion coach to work with me and my brothers and some members of our leadership team to make sure that we weren’t missing things. Up until that summer, I always thought, “We come from a good family, we’re good people.” But I didn’t see all the subtleties of being a white male leader; I didn’t realize how some of my actions or some of my words landed on other people within the organization.

We also learned from listening to our employees. We had a couple of really moving calls that summer in which some of the African-American parents on our team said, “Every time my 16-year-old son leaves the house, I’m nervous. My heart is pounding.” And that’s something I’ve never experienced before. That’s not a part of my daily life. My brothers and I are putting in the work on ourselves as young leaders to be the best leaders for everybody who follows us.

S+B: How has the pandemic stress-tested the way you’ve set out to run your company?
In March of 2020, once COVID lockdowns started, we were faced with the tough decisions that many other CEOs were faced with: What do we do with our team? Do we furlough them? How long is this going to last?

We told our people, if you don’t feel comfortable doing your job, we’ll save your job for you. But if you choose not to work, we can’t afford to pay you. We’re burning $1 million a month as it is. Thankfully, we didn’t furlough anybody; we didn’t let anybody go throughout the process. We actually grew our team by 40% last year.

We also made it clear to our people that our job was to help the helpers. For example, our field marketing team wasn’t doing events, so they set to work donating 1.2 million bottles of Super Coffee to hospitals across the country. It enabled our team to shift their focus, to enable them to help and feel like they were part of the solution. Our goal as an organization is to add something positive, so this was true to our mission.

Author profiles:

  • Brian Caisman advises companies on a range of financial, operational, and people-related issues for PwC. Based in the New York area, he is a partner with PwC US.
  • Laura W. Geller is a senior editor of strategy+business.
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