Scott Mendelsohn and Natural Raw C: The coconut water craze, partnering with Pete Evans and building a $3 million business

Scott Mendelsohn believes we’re only at the beginning of what he calls the “heath revolution”. As one of the co-founders of coconut water brand Natural Raw C, the 37-year-old Sydneysider is at the coalface of the growing preference among Australian consumers for healthier food and beverages.

Natural Raw C expects to double its $3 million in revenue in the next 12 months as it builds on its recent expansion into Japan and forthcoming launches in South Africa and Kuwait.

We launched Natural Raw C in January 2013. We’ve grown organically in Australia and then we branched out overseas. Two months ago we launched in Japan, and Kuwait and South Africa will be next.

Our products are made from 100% coconut water from Thailand. We saw a gap in the market in Australia for good quality coconut water. Some of the other brands of coconut water are not 100% natural or they add sugar and vitamin C. Most of the other brands also use different types of coconut water for their different package sizes, so they are sourcing it from different companies.

We spent a good year trying to come up with the perfect blend of coconut water. We wanted something that tasted really good, really fresh and was really natural.

We were also the first to use a resealable cap on a 330ml bottle of coconut water and to include the recipe on the packaging. We were looking for a point of difference.

Co-founder Dennis Ghetto and I are the majority owners. We self-funded the business and later received some investment from celebrity chef Pete Evans.

Before Natural Raw C, I worked for some time at Macquarie Bank and then I had a manufacturing business that imported clothing from China.

My experience has given me a good, wide base of skills. Working in Asia is certainly different to working in Australia and working at Macquarie gave me insight into big business. And then having my own business, you tend to do all the smaller things.

Business plans are important but when you’re in a new market, you have to be flexible. As a small, private company we can make changes quickly.

When we choose new markets to enter into, we look for where there is not big saturation of coconut water. In Australia there are a lot of competitors but some other markets are quite immature.

There will be challenges in new markets. The interesting thing about Japan is that it is going through a health revolution like Australia. There is a real effort to stay healthy, drink healthy and a realisation that eating western food has been quite detrimental.

We will definitely consider going into more markets and we’re always open to launching other products. But we’re concentrating on building the Raw C brand. We’ve grown quickly in the first 18 months and there’s huge opportunity here to grow more.

Raw C is currently sold in health food stores and delis. If we had the opportunity to be distributed by Coles and Woolies we would certainly look at it, but I think they are currently driven by price.

The challenge with growing so quickly is being able to plan and forecast. Because we use a natural product, we can’t just turn on a tap and it appears. We have to plan our production three-to-six months ahead of time. It can be quite tricky.

We tend to pare our marketing back to grass-roots, although we are planning to rebrand our packaging soon.

We use lots of social media and we post new coconut water recipes each day on Facebook and Instagram, which are mostly provided by members of the general public. It allows us to interact with our followers.

I think we are just at the start of the health revolution. With more and more people finding out about intolerances and more media coverage of products and their health benefits, I think the health area will grow dramatically in Australia.

There will be consolidation among the brands of coconut water as there are just so many. All of the coconut water comes from overseas and there are only a few Australian-based companies.

We’re really excited about continuing to grow our market in Australia and we’re very lucky to have someone like Pete as a partner, who is so passionate about getting the product out there.