You Mix the Rum with the Coconut

Central American siblings launched Coconut Cartel rum after realizing the potential of blending their coconut water with rum, initially sparked by smuggling coconuts into the U.S. Their unique product gained popularity, attracting celebrity fans and expanding globally, capitalizing on the rising demand for premium rum, particularly through successful e-commerce strategies.

How two Central American siblings started a U.S. rum company

By Katelin Stecz

The story is that Coconut Cartel rum began with coconuts smuggled into the U.S. It was 2012, the height of the coconut water craze, and after comparing coconut water sold in the U.S. with fresh coconut water that Mike Zig grew up drinking in El Salvador, he realized there was an opportunity.

Mike’s sister Dani explains that the first time her brother brought coconuts into the U.S., “He literally loaded up his suitcase with 300 Coconuts, [each] like the size of a softball, and just flew up. He didn’t know anything about importing or agricultural laws. He got pulled over, obviously, with the TSA asking, ‘What is in your suitcases?’ And so, it felt very much like he was smuggling.”

From there, the brother-sister duo began peddling their coconuts in Miami. At least twice a week, Mike (now licensed) would fly to El Salvador and return with a suitcase full of coconuts to sell at various juice bars and hotel bars on trendy South Beach. The Zigs’ coconuts quickly became a celebrity favorite after Mike sent some to Drake’s table at Soho Beach House. Martha Stewart, Cristiano Ronaldo, Kendall Jenner, and Floyd Mayweather soon became fans.

After bar directors saw how popular the Zigs’ coconuts were, they began to experiment with using them in drinks. “The bar directors were mostly interested in seeing how they could use the coconuts as a cocktail vessel. They would ask us for suggestions like, you know, what cocktails can you make in this?” says Dani.

Growing up between Guatemala, El Salvador, and Miami, the Zigs had lots of exposure to rum culture from a young age, so blending their coconut water with Central American rum seemed only natural. At the end of 2018, they launched Coconut Cartel, proofing the rum with coconut water instead of regular water. “It’s sort of this Frankenstein product that’s really delicious and natural. It’s different from other brands,” says Dani. “What’s on the market today is suntan lotion. It’s not real rum. It’s not real coconut.”

Coconut Cartel’s entrance into the rum market proved timely. Rum, especially premium rum, has been steadily growing in popularity throughout the U.S. and Europe. According to the International Wines and Spirits Record (IWSR), the global rum market was worth $15 billion in 2021, and it is expected to reach $21.5 billion by 2027.

 Dani says the company initially found success during the pandemic with e-commerce. Through Facebook ads and online marketing, they were able to understand who their consumer was and reach out to comparable rum-drinking demographics. According to Dani, small alcohol companies normally focus on selling to bars and restaurants. This strategy, while traditional in the industry, doesn’t give companies the same kind of insight or consumer data that e-commerce and online marketing does.

“Our business went from a few bars to now selling hundreds of cases a month,” says Dani. Coconut Cartel rum is currently sold in over 3,500 locations across the world, and the company recently announced its expansion to the European market. Their ultimate secret? “We come from a rum-drinking family,” says Dani.

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