Big Red Buys Xyience, Ends UFC Partnership

Xenergy Lineup

It seems the beverage industry continues to go through some form of consolidation.  Big Red Inc. – one of North America’s Top 10 beverage organizations – has acquired Xyience effective immediately.  Xyience – one of the more well-known energy drink brands through their sports sponsorships – now joins a drink portfolio that includes Big Red Soda, Hydrive Energy Water, Nesbitt’s, and Thomas Kemper Soda.  While many things may change for Xyience in the future, one thing has already changed as a result of this acquisition: Xyience has ended its UFC sponsorship.  Will ending this sponsorship hurt Xyience’s growth among their core demographic?  How else will their communicate to this group of consumers?  Will the gains from being part of Big Red’s system outweigh Xyience existing as a standalone energy drink company?  What benefits Xyience in this arrangement?

One major factor: Big Red’s national footprint.  Xyience had been working well to gain distribution, winning more doors and regions over the past few years.  However, most of these distribution gains have occurred along the coasts.  There are many areas within the U.S. that Xyience products cannot be found.  Joining Big Red gives Xyience national distribution by piggybacking off of Dr Pepper Snapple Group (DPSG), which is a national distributor and delivers to three-quarters of all Big Red retail accounts.  This change alone provides significant gains for Xyience, allowing the energy drink to challenge Red Bull, Monster, and Rockstar across more geographies.  The best part is that this is organic growth, where Xyience can rely on their brand name to help them do some of the work.

Beyond distribution gains, another growth opportunity for Xyience would be to broaden its target audience.  While the energy drink manufacturer owns a niche following among a select group of consumers, appealing to more consumer groups will help this brand evolve from its current state to a much larger energy drink player.  Hence ending their UFC sponsorship.  Gary Smith – Big Red’s CEO – said as much:

“I’m just gonna soften it (their image) up a little bit, make it a little less hardcore than the image that it’s got today.”

Ending the sponsorship won’t immediately alienate their niche consumers, but provides the opportunity to reach other consumer groups.

If managed properly, Xyience may be primed for explosive growth following its Big Red acquisition.  The brand is very recognizable and will be available in more places where consumers will recognize them.  And in the distant future after new consumer marketing content is built, they will certainly be challenging Red Bull, Monster, and Rockstar for share of mind in addition to share of shelf.

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!

Energy Drink Wars – Coke Learns a Lesson That Pepsi Has Not Learned

In light of recent news about Coca-Cola’s interest to buy Monster Energy and then later refuting their interest (link here), the energy drink category has continued to cause headlines in the beverage industry.  However, most of the noise is generated from the leaders like Red Bull, 5-Hr Energy, Monster, Rockstar, and Xyience.  Amp Energy is Pepsi’s own energy brand, while Full Throttle Energy is Coca-Cola’s home grown energy brand.  Both have languished in the category as the two refreshment manufacturers focused on other beverage categories (carbonated soft drinks, sports drinks, and coconut water to name a few).   Given Coca-Cola and Pepsi’s distribution contracts with Monster and Rockstar Energy respectively, and their focus on growing other beverage categories, will Amp and Full Throttle Energy survive?

Amp Artwork Redesign - Old and NewBevReview.com has a great piece on what Amp has been up to recently (link here).  Pepsi’s own energy drink product has gone through packaging redesigns, name changes, and a re-focus on functionality.  What remains constant is the brand’s partnership with NASCAR racing.  Amp has re-positioned itself and it’s product offerings, but has not simplified its offerings – there are still seven flavors.  Given it’s varied product portfolio, Pepsi will be hard pressed to find a retailer agreeing to take in all seven flavors of its energy drink, unless Pepsi provides the retailer great profit margins.  Retailers have product buyers that determine what products are brought into the outlet, and are mandated to grow the retailer’s beverage portfolio with products that provide strong sales and high profits.  Having a product that isn’t within the top 5 selling energy drink brands, with seven flavors, poses a challenge at getting listed.  It will be tough to convince the retailer to give Amp a chance unless there are less flavors to choose from or very high margins to compensate for their lower sales velocity.  Ultimately, the buyer may tell Pepsi to pick and choose two flavors to get listed – and Pepsi would be better off having a less complicated Amp portfolio.

Full Throttle Redesign - Old and New Artwork

What about Full Throttle Energy?  BevWire previously detailed that Full Throttle was also undergoing packaging redesigns (link here).  Since that time, advertising and marketing support for Coca-Cola’s in-house energy product has diminished even more.  A quick look at their website drinkfullthrottle.com reveals a splash page with two links at the bottom, and a general link to the NHRA (National Hot Rod Association).  Visiting various Canadian grocery stores reveal that there is only one remaining flavor that is stocked regularly and that is the original Full Throttle Citrus flavor.  Gone are the Berry and Agave flavors.  Despite the change in artwork, it appears that there still has not been any support behind Full Throttle Energy; Coca-Cola instead focused on growing Nos Energy.  In this case, it would appear that Nos Energy will be replacing Full Throttle in no time.  Both Nos and Full Throttle have auto racing sponsorships like Amp, but having your brands occupy the same space and also compete against products in the exact same space is redundant.

Nos Energy 473ml Assortment

If there was a lesson to be learned here on supporting your beverage brands, it appears as if Coca-Cola has learned that lesson.  Full Throttle has gradually reduced their flavors voluntarily and focused on the core product: Full Throttle Citrus.  Even in that regard, it certainly appears that Coca-Cola will be phasing out Full Throttle completely and gradually replace it with Nos Energy.  Nos Energy was previously only available in 650ml (22oz) cannisters but has expanded its 473ml (16oz) offerings in addition to expanding its flavors.  Pepsi does not appeared to have learned the same lesson as their main competitor.  Should Amp Energy remain competitive, Pepsi must support the beverage more than just re-skinning and renaming the products.

XYIENCE – Front and Center on May 5 UFC

Xyience 2012 Lineup Collectors - GSP and BonesBevNet recently detailed that Xyience, the UFC-affiliated energy drink, will have their logo featured in prime position for the May 5 UFC matches (link here).  Xyience’s logo will be at the octagon’s center stage for the May 5 broadcast, offering both live and home television viewers many opportunities to connect the beverage’s partnership with the mixed martial arts league.

Xyience has always shown a willingness to invest marketing dollars in product placements and sports sponsorships as well as emphasizing traditional marketing.  These unconventional methods help the manufacturer grow smartly, reaching their target demographic (males 18-34) without any other similar products present.  Product placements work typically because the audience sees the product’s functionality in a normal setting without any strong promotions, whereas an poster/commercial will be overtly selling the product.   Since Xyience is a title sponsor for the UFC events, it would also be common for the athletes to be hydrated with Xyience products.  A better relationship to help the product grow will certainly ensue if the match’s winner drinks a can of Xyience upon victory.

Xyience 2012 Lineup Regular Line-up

Also helping their growth is their distribution strategy – BevWire detailed in a previous post that Xyience has gotten distribution in nutrition stores (link here).  Not only is the brand being found in your traditional grocery supermarkets, but they are also being found where shoppers look for nutritional foods and supplements.  This definitely expands their reach that is atypical for a brand their size.  Rockstar and Monster may have extreme event partnership and cooler barrels at these events, but the key to growth is to be top of mind with the consumer even when they are not at these events.  In this regard, Xyience may be beating their larger competitors because of their broader and more varied distribution network.

Xyience is making all the right moves to develop their brand and growth stronger, given their smart partnering and distribution ventures.  As energy drinks matures as a category, consumer may become bored of your traditional energy drink and look for options.  This UFC-affiliated beverage is certainly well-positioned to make a move with those bored consumers as they continue on their current path.

Red Bull Total Zero: Sticking With What Works

TotalZero

Red Bull is anticipated to launch Red Bull Total Zero this April in the U.S. – an energy drink formulated with no calories, carbohydrates, and sugar.  U.S. trademark and patent files indicate that the colors are silver and grey, with a yellow band across the top.  A pretty sleek looking can from my perspective.

The launch will come in the can size that Red Bull made popular (250ml) and likely retail for the same price as existing Red Bull products (Original and Sugar Free).  With only two products variations available and selling, Red Bull undoubtedly needed to innovate and come out with new products and re-gain their lost leadership position from Monster Energy.  Is Total Zero going to help them with that?  The latest innovation is a very safe line extension, capitalizing on existing energy drinkers that are concerned about calories and carbohydrates.  Red Bull is sticking to what they know best and using this to build upon their success.

Total Zero is a product that is very similar to what everyone has come to know and expect from Red Bull.  It is a product that many expect it to perform the same way as its other two beverages, but calorie-free and carbohydrate-free.  It will likely be shelved in the same cooler space as the 250ml Original and Sugar Free variety, making it less of a delineated extension (ie Red Bull Cola in the cola section, Red Bull Energy Shots at the cash register).  These factors give it a higher chance of success than their previous innovations.  However, the launch of Total Zero isn’t likely to gain a lot of additional shelf space in the cooler door, so the facings for Red Bull Original and Red Bull Sugar Free will have to be reduced.

While there may be some cannibalization with their existing products (expected), Red Bull is hoping to attract those drinkers that may have left for Monster, Rockstar, and Xyience because of the calorie-free option.  Since the growth of energy is slowly tapering off, the importance of converting a category shopper to a Red Bull shopper is even more important.  As long as they are buying your company’s products and not the competition’s, you at least keep their dollars within your organization.

Are there other product extensions or adjacencies that Red Bull can leverage?  Cola didn’t work and neither did energy shots.  There’s only so much space in the cooler’s energy door for Red Bull, so they will really need to look beyond that one section to drive growth.  Are there growth opportunities in the juice door, or the water area?  Or expand into confectionary offerings like Jolly Rancher and Jones Soda Co?

Total Zero’s launch makes the most sense for Red Bull because it’s a safe bet and should work very well with energy drinks, but Red Bull should also be thinking about where to go next beyond Total Zero.

Xyience Gains Distrbution in GNC Nutrition Stores

Xenergy Cran Razz Jon Bones

Xyience has increased their presence in the U.S. energy drink market by gaining distribution to GNC stores across the nation.  In a recent press release, Xyience announces that four flavors will be available at nearly 2,000 GNC retailers – Xenergy Premium Mango Guava, Cherry Lime, Cran Razz and Xenergy Xtreme Fruit Punch (press release link here).

This is a huge win for both companies.  GNC has been exploring options to increase their revenues from existing customers; and stocking energy offerings like Xyience’s energy drinks may allow them round out a shopper’s spend in their nutrition stores.  For Xyience, this gives the company expanded footprint by penetrating an unconventional and alternative distribution channel.  In a stabilizing energy drink market (where sales are no longer double digit and growth is trending higher on recovery-related functional beverages), increasing distribution is paramount to acquiring new customers for sustained growth.  Xyience will be available in both refrigerated space and warm shelf space in GNC locations, meaning that the product will have more than a single point of interruption for shoppers and increasing their chances of acquiring new customers.  Xyience also current sells mass gainers and workout recovery products in some GNC outlets, making the connection to other Xyience products easier for existing GNC customers while leveraging on the success of the brand’s reputation.

Xenergy Fruit Punch Dan Hardy

Xyience also fortifies the beverage’s product position as an all-natural, sugar-free and calorie-free energy offering.  By placing the product in a health-focused setting allows shoppers to immediately make the connection that the product is healthy regardless of whether it actually is healthy (or at the very least, not detrimental to your health).  After all, would you expect to find unhealthy products in a health-focused retailer (ie. finding non-organic brownies or regular donuts in calorie-conscious nutritional setting)?  And because other Xyience products are healthy and available in GNC already, it is easier for the customer to make the connection that Xyience energy drink is also a healthy product.

The marketing and strategic moves made by this energy drink manufacturer are definitely paying off and helping them expand their network and overall growth.   From the partnership with  Ultimate Fighting Championship and its fighters, that includes product placement shots in the octagon and autograph signing events, to the female consumer secondary target consumer, to the increasing availability of Xyience products everywhere.  While all these things are different aspects of sales and marketing, they are all tied back to the overarching objective and present to the consumer a single, unified message.

Xyience is an energy drink brand that had successfully carved out a niche market, and its recent initiatives to penetration mainstream energy shows that it will be a company that other energy drink manufacturers should pay strong attention to.

Xyience Targeting Female Energy Drink Consumers

Xyience Energy Drink line-up, courtesy of www.urbanclimbermag.com

A few posts ago I talked about 5-Hour Energy targeting the older demographics to expand their reach outside of the typical energy drink user (link here), and it appears that Xyience is trying a similar strategy.  To be concise, Xyience has always been an all-natural calorie-free energy drink, but now has the opportunity to capitalize on their positioning.

Xyience became a major player through their partnership with the UFC, where the energy was originally featured within the Octagon as well as other UFC apparel such as round cards, towels and t-shirts.  The partnership has since expanded to cover UFC fighters, which appear at autograph signing events when Xyience launches into convenience stores and grocery stores (more info from a beverage industry article here).  With their calorie-free energy drink, female consumers are a prime target since they are the ones that really look at the ingredient table to check on the beverage’s contents.

As energy drinks transitioned from an emerging beverage category to one that is stabilizing, manufacturers must be innovative and look for new growth opportunities or risk becoming irrelevant.  We saw Red Bull try energy shots briefly before discontinuing them, and also saw 5-Hour Energy targeting senior consumers groups with their energy shot.  Now we see Xyience targeting female consumers.  The main difference between Xyience’s target and that of Red Bull’s is that there should be little to no cannibalization for Xyience.  Someone that buys an energy shot may not buy an energy drink since both products perform the same function.  And Xyience is not necessarily penetrating a category that has numerous competitors (there are some energy drinks that target female consumers – Rockstar Pink, Pink Energy, Tab Energy, etc – but not many manufacturers are targeting the female consumer).  And the difference between Xyience’s target from that of 5-Hour Energy is that they do not have to educate the audience on the product’s benefits since the female consumer is already knowledgeable about energy drinks.

After all is said and done, Xyience stands a stronger chance to reach the female consumer than other energy drinks.  However, simply relying on the product’s ingredients to appeal to the target is not enough, so Xyience may need to adjust some of their packaging to better communicate with females.  For example, Rockstar Pink comes in a 12oz/355ml pink can (stereotypically female targeting, as no males would want to be seen drinking from a pink can) with a straw.  The insight may be that females would prefer to drink out of a straw than directly from the can, so the straw’s addition may help with reaching females.  Xyience may consider adding a straw in addition to changing some of the Venn circles to white or pink (again, stereotypical female colors).  This will allow them to keep the core colors of  black and silver constant, while making slight alterations to appeal to the opposite sex.

The female energy drinker is both elusive and profitable, and if Xyience effectively reaches them and can translate sales from this group, then we may see this mid-size energy drink player rising to the same status as Red Bull, Monster and Rockstar.

Jones Soda Reintroduces WhoopAss Energy Drink

Jones WhoopAss Energy Drink

Originally launched 11 years ago in 1999, Jones Soda is planning to reintroduce their premium energy drink WhoopAss to the energy drink market.  The relaunch will feature a new fruitier flavor, purple colored liquid, and thoroughly updated packaging.  No word on whether it arrives in Canada, but the new drink will be available in the U.S. starting in November, and will retail for a discount price point of $2.39.

Quoting Jones Soda CEO Jim Meissner, “WhoopAss is a product with major potential, but it was ahead of its time when it launched in 1999, slipped to the backburner for Jones, and unfortunately stayed there without getting the proper attention and marketing backing it deserves. Earlier in my career I played a key role in bringing a number of top selling energy drinks from initial concept to household name. This is my territory — I know the energy drink space, I know what it takes to be successful, and I couldn’t wait to get my hands on WhoopAss when I came to Jones. Right now the product only accounts for a small portion of our total sales, and we aim to gain share points in this category and make WhoopAss a major part of Jones’ beverage portfolio.”

Meissner should also want to mention that WhoopAss is competing in a very crowded and maturing market space with three strong market leaders and numerous smaller energy drink competitors.  The market leaders in order of market share and profits are Red Bull, Monster and Rockstar.  After those three, the rest of the market shares drop drastically, but do include niche products like Full Throttle, Nos, and Xyience among many others.  Each nice energy drink is marketing toward a specific segment – Full Throttle the music scene, Nos the car fanatics, and Xyience targeting the MMA crowd, etc – what will WhoopAss’s target segment be?  Apparently the skater, surfer, and MMA fanatic segments.  With Xyience already solidly entrenched in the MMA crowd through their UFC sponsorship and product placements, WhoopAss is facing a strong uphill battle to penetrate that segment.  The skater and surfer segments may be an easier path to reach profitability and success.

The single serve energy drink market is roughly $25million and growing, but with the category maturing, WhoopAss’s introduction is just fighting for a small share of the market.  Is that worth the product introduction, given how much resources the company will be spending, not to mention that they are retailing it as a slightly lower price point ($2.39 compared to average market price of $2.69 in the US)?  Meissner says that the product has “slipped to the backburner for Jones, and unfortunately stayed there without getting the proper attention and marketing backing it deserves.” Maybe if WhoopAss was launched 5 years earlier it would have made a bigger impact, but with Jones’ focused on other projects in recent years (BevWire has written about Jones GABA and Jones Soda being listed in Wal-Marts) the market is full of competition and everyone is just competing for a small piece of the market.  Unless the drink gains strong celebrity endorsements (ie. Tony Hawk, Shaun White, etc) and lots of news coverage (can be both positive and negative), it will become an also-ran.

Of course, the energy drink has not even been released yet and BevWire is predicting for it to be unsuccessful, so I might be a little harsh.  Maybe we will focus on WhoopAss again later and revisit this piece again next year to see how much success WhoopAss has experienced in the energy drink category.

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.