While the CBD industry may not be a rich man’s game, Deep Patel is proving that it’s definitely a young man’s game.
Though he’s just 22 years old, he has already built and sold his first company: The Gen Z entrepreneur’s wildly successful CBD brand Penguin was recently acquired by the leading CBD gummy brand Verma Farms. Rated the No. 1 CBD brand of 2020 by Snoop Dogg’s Merry Jane, named one of the best CBD oils by major health publications like Healthline and Medical News Today, and praised by Buzzfeed and Rolling Stone, Penguin is one of the fastest growing, most popular brands on the market.
Even more remarkable is that Penguin was bootstrapped by a 20-year-old; no investment capital was raised. Georgia native Patel started Penguin in October 2019, shortly after he dropped out of college. He calls the past 18 months “an unforgettable journey.”
“I was already running a successful marketing agency when it was time to decide on where to go to college,” says Patel, who made the decision to drop out of university the day classes began. “I realized that I’d be paying hundreds of thousands of dollars for a degree — but I’ve always believed that experience is the best teacher.” A decision many would consider risky ended up being not just sound, but exceptionally lucrative.
He decided to base his business on CBD because of his personal experience with the plant-derived supplement. It makes sense that someone who ran a successful marketing company in high school might also be the kind of person who has trouble turning off their mind to get some rest… and this was the case for Patel, who first came to CBD as a sleep aid. “My mind is always turned on and moving at a million miles an hour, which interferes with my getting a good night’s rest,” he says. He set out to find a remedy — one that would allow him to continue to harness all that mental energy and have the capacity to actually sleep.
“CBD became a part of my nightly routine before going to bed, and eventually my daily routine, too,” he says, but he found it difficult to get more information on what was in the different hemp products he was consuming. “I was doing all this research, and kept coming up against walls and roadblocks,” he says. “It was impossible to find detailed information about these products — and when I did find information, it wasn’t always great. Often, there were questionable chemicals, or lower amounts of CBD than advertised. The whole thing was off-putting.”
In the failings of the burgeoning industry, Patel saw opportunity. “The industry was skyrocketing in popularity, and here was this major gap,” he recalls. “It was a no-brainer for me. I decided to start Penguin immediately.”
Though new to the hemp industry, Patel already had marketing chops from years running his marketing agency and doing consulting for the likes of Cellucor and A.T. Kearney — experience that would be invaluable as he entered an extraordinarily competitive market.
While most brands set their sights on health-focused millennials, Patel’s brand targeted his own generation: the older segment of Gen Z. This has been another key to his success in what has been a challenging year; Penguin launched just before the onset of the COVID-19 pandemic in 2020.
“The [CBD] market is saturated, and competition is fierce,” says Patel. “So we took a different branding approach than most brands, and focused on vibrance, approachability and trustworthiness.”
Because he was aiming his products at a hyper-curious generation who loves to #LearnOnTikTok, Patel ensured that education was a primary focus. “Once we’ve caught a customer’s attention, we start building a relationship through education,” he says. “We earn trust through providing a myriad of educational information, prompt and thorough communication, and full transparency.”
Patel explains that his customers build their daily routine around CBD products — whether that’s his best-selling cookies & cream CBD oil, CBD capsules, topical cream or the decidedly youthful sour worm CBD gummies. While whimsical in nature, each provides significant benefits, and they’ve been incorporated into the daily routines of his clientele. “Fostering a trustworthy and intentional relationship with them is key,” says Patel. “This is what brings customers back to Penguin time after time, and allows us to create that long-term relationship.”
As part of their efforts to promote transparency, Patel’s business peels back the curtain and allows their consumers to see what the company sees: lab test results. “We regularly send our products to third-party laboratories to be tested. Then we post these lab results on our websites so our customers know exactly what they’re getting.”
This may not seem like a major differentiator at first glance, but considering the nature of the unregulated supplement industry, it can be hard for a consumer to differentiate between a bona fide health product and a sketchy supplement. With the FDA taking a hands-off approach to this sector, it’s up to the brands to not only self-regulate, but to educate their audience as well — and Patel was up to the task.
Patel notes that transparency has been the top contributing factor to the success of his brand. “It builds trust,” he says. “And there is nothing more valuable to a brand than their customer’s trust.”
By focusing on the differentiation, deliberate Gen Z marketing and ethical brand foundation, Patel was able to grow Penguin during a time in which thousands of CBD brands went out of business (primarily due to the pandemic and COVID-triggered economic hardships). He says these adversities are simply par for the course. “Being an entrepreneur means that you’re constantly trying to overcome obstacles,” he says. “Sometimes you know about these obstacles — like entering a saturated market, for instance — and other times they are unforeseen and sudden, as was the case with COVID. I don’t think there is a single biggest challenge or obstacle, but instead it is the sum of all these obstacles that is the most challenging.”
His solution to surmount said obstacles? “The challenge is to find the motivation and attitude inside of you to keep pushing forward, no matter how high the peak is, and to understand that these obstacles are just a part of the path toward success.”
Patel is thrilled that his company has been acquired by Hawaiian hemp brand Verma Farms in an all-cash deal, but he’s even prouder of the educational experience. “Penguin has taught me more in the past year than I would have learned over the course of four years in college,” he says. “I’m most proud of the actual experience and knowledge that I’ve gained by going down this path; I’ve become a more well-rounded entrepreneur.”
“I’m also very proud of the team I’ve built; a team of people I consider my friends,” he says. “They’re incredible individuals who care about the brand, our customers and our mission.” With the recent acquisition by Verma Farms in May 2021, that team will transition but Patel will stay on as an advisor.
“CBD has helped me so much personally, and has been an integral part of my health routine as an entrepreneur,” says Patel. “It helps me sleep and calms my mind, and I’m able to have more energy, think more clearly and be a better person overall. Knowing that I can do the same for my customers through Penguin is something I will always be grateful for.”
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