Italian MBA's Start-Up Takes On Red Bull With Caffeine Gum

MBA and former diver Nazareno Mario Ciccarello is making a splash in the start-up world – his company seeks to energize the consumer goods sector.

As a manager in a cadre of leading healthcare and pharmaceuticals companies, Nazareno Mario Ciccarello used to spend his time travelling across South America, the Middle East and Asia, scouting out licensing deals or new drugs to bring to market.

“I was spending most of my time on planes,” says Nazareno, a former professional diving champion.

He relied on coffee and coke to combat jetlag – until he was flown to Hong Kong and while in transit from the airport realized that all the local taxi drivers were chewing gum. Fascinated, he looked into clinical studies which proved that the simple act of chewing helps people to stay awake. “You always need to find a way to fight sleepiness,” says Nazareno, an MBA graduate.

He sensed potential. “It was at the same time that Red Bull and the energy drinks were ramping up [demand],” he says. Companies behind energy drinks such as Monster and Red Bull, which increased sales by 5% this year according to Beverage Digest, have been gaining in popularity. But the consumer goods sector has come under scrutiny by health authorities. “On the other side, we are starting to see some concerns about the vitamins and the huge amount of sugar.”

Nazareno came up with a solution to appease both sides: Drivegum. The caffeinated chewing gum he developed is set to be sold in thousands of convenience outlets in Italy, Spain and Romania.

He co-founded Functional gums s.r.l., the company which manufactures the gum, in March 2013, a few years after completing an MBA program at Spain’s IE Business School. The founders have invested about €40,000 into the company, but Nazareno hopes to raise an initial round of investment of about €500,000.

The company is targeting drivers. Nazareno says sleepiness is a problem that kills: he points to research which shows that 86% of drivers would not stop to take a rest even when tired.

So far Drivegum has struck deals to supply motorway convenience stores with REPSOL and TOTAL-ERG – companies which operate petrol stations in Europe – among others.

Nazareno seems confident that his product can emulate the success of the energized drinks giants but admits it will not be easy. Marketing the gum is a balancing act: “On one side we believe our product helps with concentration... [But] if you’re tired while driving, our advice is to stop and take a rest.”

He has tried to develop a unique brand. Drivegum is “bittermint” flavoured – a cross between mint and the bitter taste associated with coffee. If that sounds unappetising, Nazareno knows he cannot please everyone. “Not even Nutella can do this,” he laughs.

He says his market research showed that 85% of people like the taste. “We tried different developers and ended up with a leading European company which is producing exclusively for us,” says Nazareno. “We wanted to find a characterising taste.”

He spent years in the healthcare sector but it was his professional career as an athlete that provided inspiration for his business. Nazareno Mario Ciccarello is a name synonymous with diving in Italy, the entrepreneur’s native country.

He spent about 25 years as a sportsman before retiring as vice-national champion in Italy for the 10-meter platform. “I’ve spent until now more time in Speedos than with a suit on,” he laughs. “I’ve been diving since I was eight or 10 years old.”

A fellow athlete’s father owns a confectionary distribution company. “I started with him and a couple of other shareholders including a nutritionist. Our mission is to use chewing gum as the main active ingredient [in consumer goods products]. We have been developing other products,” says Nazareno.

He thinks the product can adapt to different markets and consumers. They are looking into targeting students and specific athletes with a similar caffeinated product. “There is potential, we just need to push it and [we] need funds.”

The Italian-based company is lean with only a handful of employees and two interns. The founders pooled personal savings into the business, and have received help from family and friends. “If you have to take a flight it’s going to be with Ryanair,” Nazareno says.

He describes his Bolzano base, a city in northern Italy, as “extremely efficient in providing support to start-ups”. But his background has the hallmarks of a globetrotter.

After a stint in the Italian Army, Nazareno landed a job at Johnson & Johnson, the drugs giant, before moving onto other healthcare companies where he has been responsible for regions in EMEA.

The political science graduate enrolled in an MBA program at IE, the Spanish business school, in 2007. “Even if I didn’t find the job I dreamt [of] at the beginning, it was an amazing experience,” he says. “It’s a solid base where you can build your success,” Nazareno adds.

He values the global nature of the program – “image being in a class with people from 49 different countries” – but has also leveraged his MBA network. He signed a network agreement with REPSOL, the energy major which has petrol stations across Spain, after introductions by IE alumni.  “It’s what you learn, but also the network you build up,” Nazareno says.

He may be running a promising European start-up but the MBA graduate isn’t your archetype up-start. “I’m not the type of entrepreneur who would sell his house to set up a start-up,” he admits.

But he puts his motivation to pursue an entrepreneurial career down to his MBA – as well as a harsh jobs market during the financial crisis, among other factors.

“I finished my MBA in December 2008; Lehman Brothers collapsed in September, so it was impossible to find a job. I started to found a company because I couldn’t find a job,” says Nazareno.

Last week Drivegum started supplying TOTAL-ERG, the energy company which has 76 service areas on its motorway network. That follows a deal with REPSOL which could see the caffeinated gum stocked in up to 2,500 petrol stations across Spain.

Nazareno, however, is unashamedly cautious. “It’s not a business which will boom in a week,” he says. “You need to get in one chain, get a good result [and] then expand step by step. Let’s see how it goes.”

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