5 Questions with Dollar Shots Club’s Darin Alpert

Dollar Shots Club - why pay more than $1 for a shot? Courtesy of facebook.com
Dollar Shots Club – why pay more than $1 for a shot? Courtesy of facebook.com

Most manufactured products are sold through retailers and typically include a mark-up.  This is necessary for the retailer to earn profits from carrying the product on their store shelves.  It also gives consumers a “one-stop shop” to find all products they need.  Online retailers and companies that sell directly to consumers cut out the retailer and thus can sell their wares at lower prices.  This is the case with Dollar Shots Club, an energy drink company that recently sprouted up that cuts out the retailer.  BevWire recently caught up with Darin Alpert, the Chief Marketing Officer of Dollar Shots Club.

BevWire (BW): First of all, what is Dollar Shots Club?  Are you guys product manufacturers, product distributors, or a combination?  How long have you guys been in business?

Darin Alpert (DA):  Dollar Shots Club is a monthly membership for great tasting, affordable energy shots.  We officially launched in September 2014. We are a combination of manufacturers and distributors. We don’t see a reason for consumers to pay for retail markup of their energy shots.

BW: How did you guys come up with the idea for Dollar Shots Club?  Did the success of “Dollar Shave Club” play into the decision and business model?

DA: Dollar Shave Club was a great motivator.  We saw that one company owns 90% market share of the energy shot market and charges $3 each for their shots.  The reason they are $3 each is because of all the layers of distribution.  We cut out those layers and know how much consumers enjoy products online over retail.

BW: Who is your target market, and how do you plan on communicating with them?  And what makes Dollar Shots Club’s energy shots unique from other energy shots on the market?

DA:  Our target market is people that drink energy shots or energy drinks and want to save money.  We communicate with them via social media. The biggest differentiation is price, taste and convenience. Ours cost less, taste better and are shipped right to your door without having to wait in line at the store.

BW: Seeing that cultivating a strong subscription base is critical, and finding new customers are equally important, what are some of your biggest challenges toward business growth?  What are some strategies Dollar Shots Club is using to overcome these challenges?  What consumer marketing campaigns can we expect to see in the future?

DA:  One of the biggest challenges we have is getting consumers to taste our shots since taste is so crucial. We offer our first month for free so people can try the shots. Once people try the shots they love them! As far as customer base, we are signing up 5-10 people per day and have been doing so since September. Our retention rate is currently above 80%.

The biggest strategy for increasing business exposure has been giving away the first month for free. We don’t want to build the infrastructure of going to events and taking on additional costs so our online advertising promotes the first month for free. We’ve also partnered with like minded partners that can help us get the word out. We’ve got a few things in the works that will increase our exposure 🙂 We can’t talk about them yet though.

BW: Seeing that the business model currently supports one flavor and one market (the 48 contiguous states of U.S.),  how would the expansion plans look like?

DA: We chose our one flavor (Berry) because it is the most popular energy shot flavor. We will expand flavors depending on demand from our membership. We’re here to serve our members needs. We don’t want to take on international expansion until we dominate the United States.

Certainly an interesting approach toward selling energy shots revealed in this interview with Darin.  While many people prefer instant gratification from product purchases, there are a growing number of consumers increasingly comfortable with stocking up and buying online.  Certainly looking forward to seeing Dollar Shots Club change up the energy shots segment.

5 “More” Questions with Hard Rock Energy’s David Drow

Hard Rock Energy Image

When people think of the energy drink category, they typically think of Red Bull, Monster, and Rockstar.  To a broader extent, consumers also consider Nos and Xyience.  All of these companies have had to build their brand from the ground up, with very little leverage in the first place.  How would the product’s success change if they had some brand equity they could leverage?  We encounter such a case with Hard Rock Energy, an energy drink licensed through Hard Rock International – the themed restaurant chain with rock and roll memorabilia – to market energy drinks.

BevWire recently connected with David Drow and Brent Campbell for an interview.  David Drow is the Chief Executive Officer and Brent Campbell is the Chief Operational Officer of Enterprise Beverage Group, the licensees for the Hard Rock Energy brand of energy drinks.  What initially was “5 Questions” spiraled into many subsequent questions as BevWire wanted to learn more about the business aspects of Hard Rock Energy.  The below is the second part of the “5 Questions” interview with David Drow.  We will be covering the brand’s marketing tactics, test market results, and David’s views on growth opportunities as well as growth barriers.  Click here for last week’s “5 Questions” piece.

BevWire: How successful has Hard Rock Energy been in its test markets of Chicago and Florida?  Has there been strong trial and subsequent repeat purchases?

David Drow:  It is still too early to tell at this point.  Initial sales have done well with limited support.  Our first test stores went “live” in early December and have done very well with the product.  We have enjoyed 15% share of energy drink sales and have had multiple repeat customers.

BW:  For subsequent expansion beyond Chicago and Florida, will cities with Hard Rock branded properties taken precedent over ones that do not have Hard Rock branded properties?

DD:  The initial test market was originally Chicago only.  It was selected with a couple of key criteria in mind: there was a local Hard Rock presence (this guaranteed brand awareness and would also allow us to utilize those resources in the launch), Chicago has a sizable population base that would allow us to gauge the acceptance of the product, and the population is considered a microcosm of the remainder of the country.  South Florida was added to the initial launch as a way to support our Seminole Tribe of Florida partners.  And let’s face it…. It’s a lot more pleasant marketing a beverage in the dead of winter in Miami than it is Chicago (no offense Chicago!)

BW:  How do you plan on reaching your core demographic target audience (males 18-24)?  What type of specific grassroot and social media tactics will you be implementing that caters to this audience?

DD:  While this is our core demographic, the category is ever expanding.  My direction to my team is “everything social”.  All marketing must have some type of social media exposure for each event or promotion.  We are focusing on music and music related events.  It is not only a good fit for the brand, it plays a major roll in the lives of our key customers.  We are developing both a strong social media presence and a robust website at hardrockenergydrink.com.

BW:  With regard to “everything social”, does that mean Hard Rock Energy’s marketing tactics differ differently between Twitter, Facebook, Instagram and other social tools?

DD:  Our goal is to utilize each social media vehicle to capture certain niches within our target demographics.  Hard Rock Energy’s website and mobile sites are our central hub for all main/universal information on our product and brand.  The Facebook page is used as the main communicator for large-scale communications.  We utilize Twitter for communication to capture current industry trends as well as generate a broader international reach; as we’ve noticed that most of our international audience is on Twitter.  Instagram is utilized to gather information on what the current trends are within the industry as far as collateral goes; but is also our “wild card” resource for reaching our audience.

BW:  What do you see the top three biggest opportunities toward growing of Hard Rock Energy?

DD:  The energy drink category continues to grow, yet there are very few new entries with the power and branding of Hard Rock.  There also appears to be some fatigue with the two majors.  As such, consumers appear poised to consider alternatives.  The levels of interest both domestically and internationally is greater than I ever anticipated.

BW:  What do you see the top three biggest challenges toward growing of Hard Rock Energy?

DD:  Competitors with unlimited budgets, regulatory intrusion, and growing too fast.  We need to ensure support to our partners.

Great insights on this second part of the “5 Questions” with David Drow.  You’ll notice it was actually six questions among this great conversation with David.  As we touched upon the core demographics and how the company’s marketing plan, it’s definitely an indication that the energy drink is focused on building the lifestyle brand that connects with the consumer both online and offline.  Understanding the top barrier to growth of competitors with unlimited budgets ensures that David’s team focuses on delivering success at the most tactical of levels first.  And leveraging on the presence of Hard Rock properties certainly helps as a competitive advantage.  A great “walk before run” recognition to grow their business.  Hopefully we will see this energy drink brand in Canada soon enough.

Thanks again for David’s time, and Brent for arranging this interview!

5 Questions with Hard Rock Energy’s David Drow

Courtesy of amazonaws.com

When people think of the energy drink category, they typically think of Red Bull, Monster, and Rockstar.  To a broader extent, consumers also consider Nos and Xyience.  All of these companies have had to build their brand from the ground up, with very little leverage in the first place.  How would the product’s success change if they had some brand equity they could leverage?  We encounter such a case with Hard Rock Energy, an energy drink licensed through Hard Rock International – the themed restaurant chain with rock and roll memorabilia – to market the beverage.

BevWire recently connected with David Drow and Brent Campbell for an interview.  David Drow is the Chief Executive Officer and Brent Campbell is the Chief Operational Officer of Enterprise Beverage Group, the licensees for the Hard Rock Energy brand of energy drinks.  What initially was “5 Questions” spiraled into many subsequent questions as BevWire wanted to learn more about the business aspects of Hard Rock Energy.  The below is the first “5 Questions” interview with David Drow.  We will be covering the brand’s market differentiation, choice of test markets, and expansion plans.  Next week, BevWire’s interview with Hard Rock Energy will touch on marketing tactics, test market results, and David’s views on growth opportunities as well as growth barriers.

BevWire: What differentiates Hard Rock Energy from other energy drinks on the market like Red Bull and Monster?

David Drow:  When designing the flavor profile, we tried to formulate a product that could be identified as an energy drink, but have a more pleasant taste.  Also, the can graphics prominently display the iconic Hard Rock logo.  At 100mg of caffeine per serving, we have about 25% more caffeine than our major competition.  Our original product is pale blue in color, is slightly sweeter than Red Bull and not as syrupy as Monster.  The carbonation is slightly less than both major brands as well.  Our Paradise Punch has a tropical fruit flavor.  It is pleasant to drink on its own or as a mixer in “adult” beverages.  The Sugar free has 6 calories per serving, no color additives (the liquid is clear) and we use Sucralose as the sweetener.

BW: Hard Rock Energy is currently available in the regional test markets of Chicago and Florida, what do these two test markets have in common?

DD: Both Chicago and Miami (South Florida) markets have substantial population bases and have Hard Rock branded properties.  The Chicago market is really a snapshot of America at large.  They have a big city life, but Midwest culture and values.   Miami (S. Florida) has international flair and culture.  It makes for a good international test without leaving the US.

BW: How soon would international (Canadian) expansion appear on the Hard Rock Energy radar?  And if it’s not international expansion, what are some other test markets that you are planning to enter?

DD:  Upon completion of the two test markets, we intend to seek approval for international expansion to coincide with our continued domestic expansion.  Canada is certainly on the radar for expansion.  On the continued domestic expansion front, we will continue to expand into all major US markets and have personnel presence in each market area.  Internationally, we are working with co-manufacturing partners to develop products and distribution.  The Pan Pacific region looks attractive, as does most of the European market.

BW: How has Hard Rock International’s equity helped leverage growth so far, and how do you plan on leveraging this equity for future growth?

DD: Distribution and acceptance at major retail are the lifeblood of consumer products.  The introduction of any new product encounters intense scrutiny before distributors and retailers will take a product.  The Hard Rock brand has opened doors that would be closed to most new products.  Overseas production will play a big part of future growth.  We also intend to utilize the Hard Rock properties for events and promotions.  What better way to support the brand, then to send people to Hard Rock venues all over the globe?

BW:  Beyond the Original, Sugar Free, and Paradise Punch flavors, is Hard Rock Energy exploring other flavor extensions?

DD:  While we will be looking at line and flavor extensions, we feel that we really need to focus on these three products to create product awareness in the category.

Certainly a great first “5 Questions” session with David Drow.  It shows that taste is one of the most critical defining attributes of the product.  Even with a strong lifestyle brand in Hard Rock International, Hard Rock Energy is building the product’s awareness and momentum the right way, through representative test markets.  Tune in next week for the second part of my interview, where we explore David’s views on growth potential and challenges, marketing tactics.

Thank you David for spending the time to answering the questions, and Brent for arranging the interview!

BevWire Interviews Zevia CEO Paddy Spence

Courtesy of Zevia.com
Courtesy of Zevia.com

After my coverage that compared Zevia with vitaminwater, Extension PR (Zevia’s PR agency) noticed the post and offered BevWire an opportunity to interview with Paddy Spence, Chief Executive Officer (CEO) of Zevia.  What started as a 5-question interview lasted nearly 25 minutes with many insightful answers and comments by Mr. Spence.  Click through to listen to the interview, which is BevWire’s first post to a newly started YouTube channel.

For those that do not have the time to listen to the entire interview, here are some quick highlights that the chat touched upon:

  • 4:50 – Mr. Spence describes the differences between Canadian and American consumers, and why Zevia is well-positioned for growth in the Canadian marketplace.
  • 6:16 – Zevia’s distribution method is dual-pronged and retailer-friendly.  With sales data uncovering insights that customers were buying multiple cans each shopping trip in conventional grocers, this channel was their first arena for market penetration.
  • 14:27 – Zevia’s competitive set was initially benchmarked against steaz, Hansen’s and Dry Soda in the natural soda segment.  As their market status evolved, it now compares itself to the larger subset of the diet and zero-calorie soda segments.
  • 11:02 Zevia’s barriers to growth is a combination of building awareness, availability, and affordability.  Paddy describes that having the stevia ingredient regulated has helped improve awareness.  For availability, it is secured distribution across major Canadian retailers like Loblaws, Sobeys, and Safeway.  On affordability, Zevia’s consumers are willing to pay a slightly higher price given its healthier enhancements.
  • 16:44 – Paddy Spence comments on product proliferation, stating that Zevia is unlike vitaminwater in a few different aspects.  For one, Zevia’s marketed as a platform brand.  Also confirmed during Paddy’s ending comments were that they will have dedicated advertising and promotion support to feature the entire Zevia product line.
  • 21:33 – Zevia’s describes their marketing strategy and the evolution from a heavy digital component to the inclusion of traditional media.

There were certainly more insights from the interview itself, but I tried to note down the above as a quick summary.  Should you find time to listen to the whole thing, you will find out more about Zevia’s next steps in terms of entering the Canadian marketplace.

Stay tuned for more Zevia developments and more BevWire interviews in the future!

5 Questions with Nika Water’s Jordan Mellul

Nika Water logoThere are many companies that embrace driving social causes with their products, aiming to make the world a better place by donating a portion of their profits to for sustainability initiatives.  Nika Water is one such company that does this, and really tries to help as much and as quickly as possible with their social mandate.  Nika Water’s website details that the company donates 100% of their profits for clean water, education, and sanitation projects in developing nations.  BevWire was given an opportunity to interview Jordan Mellul, VP Operations for Nika Water – and through this interview you will see that their focus is really on improving sustainability and environmental causes.  Read about my insightful interview with Jordan below, ranging from Nika’s product positioning, to their marketing strategy, and their distribution strategy.

BevWire:  While Nika’s unique selling proposition is a social mandate to not only be carbon neutral, but also to donate profits to help solve environmental problems in developing countries, what makes Nika better than other products?

Jordan Mellul: To be honest, we try to keep it simple at Nika Water.  While our product is a reverse osmosis/UV light purified water, we really do want the focus to be on the brand and message that it carries.  Our aim is to reach the mass population and appeal to the widest demographic possible.  After all, Nika is set to donate our profits.  By specializing, and thus limiting, our consumers, we have less of a chance of creating larger funds to donate.  Compared to those that are benefiting from our efforts, we are humbled to even be able to discuss water choice in such detail.

Courtesy of Nika Water & Olive PR Solutions.
Courtesy of Nika Water & Olive PR Solutions.

BW: Nika Water’s website mentions that part of your strategy is to leverage marketing partnerships and social media to raise awareness of these environmental causes.  As such, Nika Water has partnered with World Vision and Free the Children among other organizations.  What type of inventive marketing partnerships and social media activities has Nika Water implemented?

JM: Unlike most typical and traditional water companies, Nika has always set itself apart by how we promote and share our brand’s message.  We know that educating the consumer on what choosing Nika Water means is the primary goal.  By marketing in the way that young, energetic juice, tea, and energy drinks go about things, we are able to show that the water category has the opportunity to be relevant and cool as well.  By speaking face to face with people at street fairs, festivals, and other events, we can share our story directly.  We have partnered, not only with world-class NGOs to show how social entrepreneurialism is a new way to make global change, but also clothing, accessory, and lifestyle brands that help make a difference too.  Social media has been used at every level and intertwined into all of our efforts to create awareness.  By holding contests, promoting other like-minded groups, and keeping open, honest conversations active with supporters, Nika does what no other bottled water does to be in touch.

BW: In terms of product availability, the website mentions that Nika can be found in natural food stores, delis, cafes among other distribution channels.  Is there any particular retailers stores I can direct the readers to go if they would like to purchase Nika water?  Also, what is Nika’s plan for expansion into the traditional grocery/drug/mass retailers?

JM: Currently, we are focused on building our brand in the types of places that have an independent feel and are staples of their community.  With a cause-based product like ours, we seek quality accounts over simply quantity.  It’s the owners and customers in these locations that connect with Nika’s entire appeal.  It’s because of this, that it isn’t so easy to point people directly to where to find Nika, other than their “corner shops”.  We may have plans to do open opportunities with more traditional grocery/drug/mass retailers down the road, but not until we feel we can really compete on the level that it requires.

Nika Water VP of Operations – Jordan Mellul

BW: While Nika’s website has a “Shop Nika” section that allows for online purchasing, are there any plans for international expansion into Canadian retailers?  If so, when would this be?

JM: Nika’s sales goals are taken territory by territory.  Still in our infancy, it is important to stabilize each market that we venture into, before looking to expand.  Our goals include covering the major US cities before attempting to break into the Canadian scene.  However, with the support of one of our first and largest NGO partners, Free The Children, being based in Toronto and well-known across all the provinces, we’re confident that the support would be there almost immediately.  In regards to the merchandise that we peripherally sell however, Canadian followers of Nika are welcome to purchase that now and wear their support!

BW:  Last question, are there any plans for line extensions or product innovations?

JM:  While it has always been discussed internally, there are no plans being put into action at this moment.  We really want people to focus on what we do now, and build our business’ foundation, before becoming more creative and branching out.  Water is simply our vehicle at the moment.  It is the means to an end. If trends or experience dictated that another product would be more suitable to generate income for our NGO partners, we would definitely adapt accordingly.

 Thanks so much for your time Jordan, and thank you Olive PR Solutions for arranging this!