Xyience Energy Drink Slowly Making An Impact

from www.urbanclimbermag.com

Xyience’s Xenergy energy drink line-up has recently introduced four new flavors (above image – black cans) to supplement their successful energy drink launch.  It’s interesting to see how Xyience has managed to carve out a following among all the other energy drinks.  This success is likely to be directly correlated to their partnership with the Ultimate Fighting Championship (UFC) organization.  As the mixed martial arts sport has grown in popularity, so has the energy drink.  The UFC gradually hit mainstream media and surged in popularity in 2007, and Xyience signed up with a partnership since 2007 as well.

Xyience has benefited enormously from exposure and product placement in the UFC matches, advertisements, and even video games.  As the UFC official energy drink, their logo is featured prominently in the UFC Octogon, round cards, towels, t-shirts, and so forth.  Even from their own website (www.xyience.com), they claim that each pay-per-view UFC broadcast brings in 9 million viewers, which means that there are 9 million captive viewers for Xyience.  In turn,  the UFC’s logo is also featured on all the Xyience energy cans and this lends additional credibility.  Customers that are exposed the UFC will undoubtedly pick Xyience when they choose an energy drink, with the UFC’s logo prominently displayed on the Xyience energy cans.

Of course, the energy drink market leaders are still Red Bull, Monster and Rockstar – controlling nearly two-thirds of the energy drink market.  But just how much has Xyience’s Xenergy grown in the past year?  Nielsen market data had Xyience ranked in the Top 15 energy drinks, behind Sobe, Beaver Buzz, Red Rain and Guru last year.  This year, Xyience has moved into the Top 10 energy drinks, overtaking Sobe, Beaver Buzz, and Guru while growing sales over 80%!  That’s phenomenal growth, and only Amp and Chaser 5 (Living Essentials’ 5 Hour Energy) has managed to sell more energy drinks (in absolute dollars).  So where should Xyience go from here to maintain strong growth?

To continue their growth, Xyience will likely have to expand their product offering or expand into new markets.  Energy shots for Xyience are already available, so product offering growth means either additional flavors or energy multi-packs.  New markets means expanding into other areas where the UFC has a strong fan base – which could likely be anywhere since this sport is internationally televised and holds competitions across various cities.  Multi-packs and additional flavors may be an option, but this will proliferate the brand and dilute the customer base.  Therefore, expanding into new markets is their best option.  By forming solid distribution systems in international countries, Xyience will be able to penetrate into the markets where the UFC holds a strong following and lend credibility toward the energy drink.

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Fuze Beverages to Release Two New Flavors in Canada

Fuze Beverages will be releasing two new flavors under its Shape line of beverages in Canada.  The Fuze Shape line currently has Strawberry Melon and Tropical Punch, and will soon add Blueberry Raspberry and Cranberry Raspberry to the line-up (see left – the image is from the Slenderize line-up in the United States but will be re-positioned to the Shape line-up for Canada).

The Fuze Shape beverages seem to be popular among Canadians, and therefore expanding the product line makes sense.  With consumers being more and more health-conscious, these new products makes a strong case for success.

At the same time, the Fuze Green Tea and Fuze Vitalize Blackberry Grape flavors are being phased out of the Canadian product portfolio.  Fuze Green Tea entered at the time when there were a lot of other green tea options in the Canadian multicultural marketplace, and therefore contributed to its failure.  Fuze Vitalize Blackberry Grape never caught on as a popular flavor and therefore is being phased out.  It seems like while the Shape line-up is popular, other line-ups don’t share the same success.  Some of you might remember that Fuze Vitalize Fruit Punch was around before, but that flavor was discontinued.  The same goes for Fuze Refresh Strawberry Guava.  It seems as though the Vitalize line-up is not succeeding, and the Refresh line-up is barely staying alive.

While the discontinued flavors may not have tasted well, they may not have been given a fair chance to succeed either.  Fuze’s packaging for their Shape line-up looks upbeat, young and hip, whereas the Refresh line-up looks refreshing (no pun intended), but the Vitalize line-up looks plain boring.  Thus it may not come as a surprise that two of the Vitalize flavors are now out of the marketplace, and Orange Mango may soon follow.

The discontinued flavors may make a comeback (at the very least the Strawberry Guava flavor did do well in the market), but not any time soon.  However, if it were to succeed, it will definitely need to have updated packaging to attract the consumer’s attention again.

Glaceau smartwater has arrived in Canada…

In an earlier post BevWire broke news that Glaceau’s smartwater would enter the Canadian market in Toronto and Vancouver.  Glaceau probably decided that those two markets responded well to this product (and why wouldn’t they?) so with that successful entry, smartwater is now being listed nationwide and will soon be found at your local supermarket, grocery store and convenience store (and probably at a bunch of other places as well).

The 591ml size was extremely successful so now it will appear in the 1L bottle also. The company is trying to duplicate the success it has received in the US, where smartwater owns over 45% of the premium water category.  With that in mind, what will the other premium water companies do? Will Fiji, Evian and the likes feel the need to offer promotions or advertise more heavily to combat smartwater’s arrival?  Keep in mind that premium water is not a category where offering price promotions will help the brand.  As a premium product, the more  you lower prices or advertise, the more mainstream your product becomes and thus loses the luxury status.  So what can a premium water brand do to maintain it’s appeal and status, especially when there is a new competitor?  For now, it is too early to see how the market will respond to smartwater.  Even then, lowering prices are not an option.

The solution may be advertising, or marketing strategy in general.  For example, both Evian and Fiji use different marketing strategies to promote their products.  Even though both water brands advertise in the mainstream media through TV and magazines, Evian tends to use sponsorship and designer glass bottles more while Fiji relies on celebrity endorsements more.  The key is to have a unique selling point where no one else can duplicate, and then market it to the target audience.  So Evian will likely have to publicize their sponsorships more or find more sporting events to sponsor.  Fiji will likely need to get their products in the hands of more celebrities when they are out and about.

Time will tell what actually happens, but for now, head down to your 7-Eleven or Whole Foods and pick up a bottle of smartwater to refresh yourself!

Canada’s Enhanced Water Category in 2010

As of November 2009, the Canadian enhanced water beverage market was around $50 million dollars, and nearly half of that was Glaceau Vitaminwater sales.  Aquafina Plus controlled about 35%, and the remaining percentages was divided between Aquafina Flavor Splash, Dasani Essentials, Nestle Pure Life flavors, and the private label brands.

Some notable brand’s disappearing in 2010 include Dasani Flavors and Propel, with Dasani Essentials possibly being discontinued as well.  Not that it’s a surprise, but the overall number of players in this category are mainly Glaceau Vitaminwater and Aquafina Plus.  And Glaceau Vitaminwater has been gaining market share consistently since their release – while the enhanced water category itself grew nearly $20 million dollars, Glaceau Vitaminwater increased by close to $25 million dollars.  Not only is Glaceau Vitaminwater growing this category, they are taking it away from its competitors.  As a result, both Aquafina and Nestle have resorted to compete through pricing promotions, trying to limit their losses and temporary maintain their market share.  In the end however, both Aquafina and Nestle may be perceived as inferior brands because  of this.  They will be selling more product but still make less money, and consumers will still choose Glaceau Vitaminwater because it’s the “premier” brand of enhanced water.

So as we go forward into 2010 (actually when BevWire posts this it will already be 2010), what will happen to the enhanced water category?  BevWire sees the market stabilizing and continued growth, albeit at a slower rate.  Barring any major player coming in the landscape won’t change too much.  Sobe Lifewater does not have an expansion plans into Canada yet (maybe PepsiCo will run Sobe Lifewater and Aquafina Plus in the US, and just Aquafina Plus in Canada) so they aren’t a major factor.  Smartwater is still slowly being launched and promoted across Canada, and they are still not listed at a majority of retail chains which limits their market impact.

Any one want to venture a guess of what might happen to this category in 2010?