Error occurred during initialization of VM

When issuing zeppelin-daemon.sh start. My Zeppelin process dies:
Zeppelin start [ OK ]
Zeppelin process died [FAILED]

The log says:
Error occurred during initialization of VM
Could not reserve enough space for object heap
Error: Could not create the Java Virtual Machine.
Error: A fatal exception has occurred. Program will exit.

Apparently I have to allocate more RAM to Java. I can do this by setting the java options to -Xmx512m or higher. Where do I have to change/add this options? Or should I do something else?