I’m a Sanzo drinker. I’m also a Sanzo angel investor. The order is important because I fell in love with the product before I even knew about the company, and the hustle of its founder/CEO Sandro Roco. Over the last few years he’s been a diligent company-builder, brand steward, and community leader. Watching the boom/bust cycle of DTC brands that were running on just the sugar high of venture dollars has given me even more appreciation for those who, yes, require investment capital along the way, but are playing the long game. Here are Five Questions with Sandro.

Hunter Walk: Backstory time! Tell us a bit about Sanzo and how it was founded?

Sandro Roco: I had the idea for Sanzo in 2018. I was working at a venture-backed apparel startup for 4 years and saw the power of building digitally-native brands through Facebook and Instagram (TikTok was still nascent).

Living in New York City and finding pockets of other Asian Americans, I grew to appreciate my own identity as an Asian American. Crazy Rich Asians became the No. 1 film at the box office that year. BTS, the K-pop group, was going on a nationwide tour where they were literally selling out football stadiums.

At the same time, 2018 was the summer of LaCroix and other flavored sparkling water brands across a larger $45 billion carbonated soft drink category that has been in decline in the U.S. as consumers reduce their sugary soda intake. The big thing I noticed, though, was that across all brands it would just be the same lemon, lime, grapefruit and mixed berry flavors and so I felt like there was room.

That said, I knew nothing about this industry. A lot of consumer goods entrepreneurs either worked at Procter & Gamble or Coca-Cola or Unilever.  So getting into the industry was a bit of a process. I would go into specialty and natural food stores in New York City and look at the other independently owned and smaller brands and just cold-Instagram DM or cold-LinkedIn message the founders. Oftentimes the people behind the Instagram accounts were literally the founders.

Through this process, I was able to piece together bits of information, like where to manufacture products and which distributors to work with. Over the course of 18 months, I built up an initial knowledge set as I was developing the underlying thesis for the brand. It was very much a gradual process of getting 1% better each day.

HW: What’s something you believed about the beverage business, or consumers, when you started which turned out to be completely wrong. How/when did you realize it?

SR: So many to choose from! With my previous experience in DTC, there is/was an underlying assumption that growth resembles a “hockey stick”. In tech, there are many reasons why this dynamic exists, but the world of physical goods is not quite as exponential/logarithmic.

In truth, if it’s going well, the curve is more like a step function because a lot of the growth comes from gains in retail distribution (think launching in Whole Foods or Target, which only happens 1x-2x / year).

It may seem academic, but living it means building a business much differently. It has required a balance of aggressiveness and patience, managing cash flow, building fundraising processes around these distribution gains and many more things that I’ve had to get better at over time.

HW: Sanzo was founded, and thrived, through a time where traditional venture capital firms got excited about – and then became more disillusioned – with DTC brands. What was it like seeing some folks raise tens of millions of dollars, and where has your financing mostly come from?

SR: One of the things I loved about beverage was that because it was more retail distribution focused, it was not as subject to Meta’s algorithmic whims as other categories. And how in many ways, once you reached scale, you could build a brand and business for the long-term (think Coca-Cola as the ultimate example).

From a financing perspective, to borrow from Peter Thiel I believe there is now more clarity between those who invest in and operate in the “bits” space vs. the “atoms” space.

One is not necessarily “better” or “worse” than the other, but I think the era where founders and investors blurred these lines created unrealistic expectations and in some cases, incentivized bad behavior. So in many ways, I think it’s healthier for everyone that the lines have been re-drawn.

As for Sanzo, we’ve been fortunate to have the support early on of incredible angel investors (like Hunter Walk!) who believe in our mission of bridging cultures.  And more recently, we’ve attracted strategic capital that has either 1) experience building the brands in this space or 2) the ability to help us accelerate distribution and revenue gains.

To the former, Convivialite Ventures, the venture arm of Pernod-Ricard, the 2nd largest wine and spirits seller in the world, has invested in multiple rounds. To the latter, the venture arms of DJ Steve Aoki and actor Simu Liu co-led our most recent round and both Steve and Simu have been extremely helpful behind the scenes as we build more distribution.

HW: You’ve done some collaborations – for example, comarketing with Disney, and a Jeremy Lin limited edition flavor. How do you evaluate whether these can help Sanzo or just become distractions? Are there common asks from brands, influencers or celebrities which you say ‘no’ to right away?

SR: It may seem counterintuitive, but each partnership for better or worse has really been bespoke. But among all collaborations, we have a couple specific guidelines:

1. First and foremost, the partnership has to authentically fit the brand and pass the “eye test”. If it doesn’t pass the eye test, consumers generally can cut through the BS and any numbers you’ve run just won’t end up netting out.
2. We don’t “pay to play”. We’ve found the types of prospective partners who mandate this tend to propose very cookie-cutter types of partnerships, which just end up becoming ineffective.
3. There has to be a strategic value either in the way of bringing in a new audience or being additive to our retail distribution strategy.

HW: Sanzo prides itself on ‘Asian-inspired flavors’ – when you’re drawing from your own heritage and celebrating other regional fruits, how do you navigate marketing to consumers from those cultures versus trying to reach and educate non-Asian people? Especially staying away from stereotypes that perhaps the average American expects to see when they hear “Asian-inspired?”

SR: Honestly, it’s a process that requires intentionality and constant conversation across our entire team that ultimately shows up everywhere in our company from our retail distribution strategy (we are merchandised in the sparkling beverage aisle vs. the international goods aisle) to social media, PR and partnerships.

As people and culture evolves, so does Sanzo’s place in it. But if we do it correctly, I think it’s the secret sauce of the capital B “Brand”,  and it’s ultimately what I love about building a brand. And I’m proud that our team, especially our marketing team, indexes highly in cultural dexterity to deliver on that brand.

That said, perhaps the best way we benchmark our progress is through our first and third-party studies which have found that in just the last month, 70% of Sanzo consumers are not Asian or Asian American Pacific Islander (AAPI).

While we want to pay proper homage to our heritage and authentic background as an Asian-owned brand (I am FIlipino American), Sanzo is at its best when we serve as a bridge across cultures for both AAPI and non-AAPI.

Thanks Sandro! You can find Sanzo at many local supermarkets, corner stores or order directly.