Wednesday, January 05, 2005

Energy Drinks Build Their Buzz

I can recall my first time drinking Red Bull. However, I am not really
into the habit of drinking Energy Drink's.

Perhaps that is due to my late mom influence. She is a strong believer of natural drink's. Therefore she rather serve drinks like Chicken Soup or Mutton Soup, or old & wild Ginsen when there is a need to replenish energy. As she said her dad told her that any man made drink's are no good for health.

My research & experience is actually on the need of drinking of filter water for your great health in the everyday life.

Energy Drinks Build Their Buzz
With the beverage industry's giants still on the sidelines, startups are doing whatever it takes to grab market share
How do you convince teens to buy your highly caffeinated, $2-a-can soft drink, when hundreds of other brands are jockeying for shelf space? Skip normal TV ads, for starters. In a field continually littered with new entries, each trying to out-extreme the other, small energy-drink companies are pursuing increasingly audacious marketing tactics.

Bridge jumping, a rocket launch, and even skydiving without parachutes have become the norm in this guerrilla-marketing street fight -- all in the attempt to garner attention and enough of a following to dominate a niche within a niche. A game of one-upmanship has broken out, which extends even to the brand names (Go Fast! recently lost its exclamatory supremacy to newcomer Crunk!!!).

Without a dominating presence by either Coca-Cola (KO ) or Pepsi (PEP ), makers of so-called energy drinks -- lightly carbonated beverages often loaded with caffeine and herbal extracts -- are all hoping they can become the next major brand. So far, only one leader has emerged: Austria-based Red Bull, a private company with roughly 60% market share and at least $150 million in annual revenue, according to Information Resources, a Chicago-based retail research firm.

MOVING TARGET. Inspired by the success of Red Bull, which began as a startup itself 18 years ago, more than 1,000 smaller players have entered the market, according to BevNET, a Boston-based beverage-industry trade Web site that reviews new products.

All the newcomers are trying to steal the spotlight, staging publicity stunts that are as jaw-dropping as they are risky, financially and otherwise. For many, clever marketing remains as much -- more, in some cases -- of a focus as the nuts and bolts of actually manufacturing and distributing the product.

The target market for energy drinks is mostly male teenagers and twentysomethings, a notoriously fickle bunch. So unlike the cola market, where Coke and Pepsi push their offerings to all soda-drinkers, most of the smaller power-drink players have decided that their best hope of gaining traction is by appealing to very specialized market segments.

"Right now there's an ability to get a toehold more quickly if you can build loyalty with a niche of the market," says Kelly O'Keefe, CEO of beverage marketer Emergence, based in Edmonton, Atlanta. "The margins are high enough that you can make money on a small run of the product."

SOMETHING FOR EVERYONE. Drinks have been aimed at consumers interested in extreme sports (Red Bull, Go Fast!), video games (Bawls Guarana, which sponsors gaming tournaments and encourages players to pull all-nighters), hip-hop (Crunk!!!, Pimp Juice, and DefCon 3), and even marijuana, courtesy of Merrilville (Ind.)-based brand Bong Water.

But even the tiniest of subniches have seen several competitors rise up, forcing companies to prove that their particular brands are "authentic" and "not corporate," says Go Fast! founder Troy Widgery, a former professional skydiver. That means one-upping the competition. Go Fast! sponsors an annual jumping event at a bridge in Colorado, so Red Bull struck back last June, backing a jumper who parachuted off France's Millau Bridge, the tallest in the world.

Not to be outdone, Go Fast! is now funding the development of a winged jumpsuit that will allow the wearer to glide out of a plane without a parachute. The company also funded construction of the first unmanned civilian rocket designed to be launched into space, which took off in May, 2004.

MR. RELEVANT. In the so-called Wing Suit Mission, project leader Jeb Corliss plans to land on his stomach, skidding to a halt after hitting the ground with a forward speed of over 80 miles per hour. "The guys at Pepsi haven't even been near a plane with the door off," says Widgery of Go Fast!, who adds, "same with Red Bull."

Within the hip-hop niche, rappers Nelly (Pimp Juice) and Fat Joe (Stinger) and megamogul Russell Simmons (DefCon 3) have built brands around their own, larger-than-life personalities. Jon Crecy, vice-president for sales and marketing at Crunk!!!, says each celebrity brand is out to prove it's "hipper" and "edgier" than the others. And of course, he claims his Crunk!!! label, promoted by rap star Lil Jon, reigns supreme.

"Let's face it, you can't get more relevant to a consumer than Lil Jon," Crecy says. "His music is rowdier, and he's got more energy." Thus far, Lil Jon appears to have at least mastered the art of cross promotion -- the bombastic performer named his latest album Crunk Juice and carries a bejeweled grail filled with the concoction to award shows and other public events (see "Lil Jon Crunks Up the Volume").

"That makes my drink and my brand bigger than any of those other drink brands," Lil Jon says. "I'm more of an integral part in the brand." Crunk!!! is primarily owned by liquor importer Sidney Frank, who started Grey Goose (until he sold the brand to Bacardi), and holds the U.S. licenses for Jagermeister and Corazon tequila.

GETTING THE DRINKS OUT. But edgy marketing means little in the beverage industry without solid distribution. "None of these companies will be able to go [nationwide] overnight," says John Craven, editor-in-chief of A company that wants to sell its product in all 50 states needs between 250 and 300 distributors, he says.

Building those relationships remains a challenge for small companies: Go Fast! currently has about 25 distributors, and Crunk!!!, which started less than a year ago, has only six, mostly in the South and New York.

While Coke's KMX and Pepsi's SoBe Adrenaline Rush lag behind Red Bull, with market shares in the low single digits, that could change very quickly. "If you were to look 10 years back at bottled water, you wouldn't see [Coke-owned] Dasani and [Pepsi-owned] Aquafina" on the Top 10 list, says Emergence's Kelly O'Keefe. "There's still a lot of shaking out to be done." Read More...
Energy Drinks Build Their Buzz

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