Healthy Energy Drinks Bring Healthy Sponsorship
The energy drink category is a thriving market in North America: By 2017, the energy drink sector is set to become a $21 billion industry in the US alone. As the category has grown into the mainstream – and as its top players have built their brands – sponsorship has played a large role. Historically, industry leaders like Red Bull or Monster Energy have sponsored high-risk, adventurous properties as a way to target thrill-seekers who are psychographically aligned to the brand.
MKTG leveraged Google Consumer Surveys – an online research tool – to ask Canadians what they felt the most authentic use of sponorship dollars was for Energy Drink brands.
As expected, extreme sports such as skateboarding and surfing were the most popular responses. There is in many respects a consumer expectation to see sponsors invest in these sports due to the natural brand fit and the track record of sponsorship investments. While brands like Red Bull have transitioned into more multi-sport and lifestyle sponsorships, the overwhelming majority of activity still takes place in extreme sports.
However, the category dynamics have shifted. In the past five years, a number of new energy drink brands that are positioned as healthier alternatives have been introduced to the market. Ultimately, brands invest in sponsorship to communicate their brand story in a unique and compelling way. Naturally, the healthy energy drink brands that have emerged approach sponsorship differently – by sponsoring events and organizations that appeal to those seeking a healthy lifestyle. In this week’s blog, MKTG breaks down the sponsorship activity of the energy drink category by analyzing how the new brands on the block are playing in different spaces than ever before.
Case Studies: Who Are the New Players and How Are They Using Sponsorship?
Q Energy: Q Energy is a Canadian energy drink brand founded in British Columbia and released to the market in 2011. Using the unique ingredient Quercetin, they were able to produce an all-natural, low sugar and low caffeine energy and sports drink that supports overall health. Q Energy’s partnerships demonstrate the brand’s attempt to appeal to health-conscious consumers seeking a beverage to support their fitness endeavours. These partnerships include the Vancouver Endurance Club, Canadian Ocean Racing, Crossfit North Vancouver, and women’s fitness program 30 Minute Hit. The brand also has a long list of amateur athlete ambassadors from Western Canada, ranging from stand-up paddleboard racers to crossfit trainers.
EBOOST: EBOOST claims their energy drink is designed to improve bodily health while giving you a caffeine boost. The brand has grown on the backs of a diverse roster of endorsers and lists a variety of different celebrities, trainers, athletes, and nutritionists that have backed the product on its corporate website. Using quotes from Oprah Winfrey, Shakira, Amare Stouedemire and several other members of the EBOOST community, the brand is seeking to demonstrate the product’s functionality as an overall health supplement. Most notably, the brand has partnered with well-known fitness instructor Jillian Michaels to be the company’s “Chief Energy Officer.” Michaels has heavy influence in the fitness community and can offer EBOOST credibility in that space.
Runa: Founded in 2009, Runa is a brand that manufactures “clean” energy drinks and other products using a key ingredient from the Amazon called guayusa, a naturally caffeinated tree leaf brewed like tea. Runa is another brand that has positioned their product to appeal to those seeking a healthy lifestyle. This is shown through their sponsorship roster which the brand has labelled, Runa Tribe. The Runa Tribe consists of a wide variety of different people and events, including actor Channing Tatum, graffiti artist Cern, and guitarist Aaron Aiken to name a few and a variety of other professionals who seek to balance a professional career and a healthy lifestyle.
Market Forces - Fueling the Rise of New Energy Drink Brands:
Consumer Demand Relative to Product Alternatives: Energy drink sales are now rivaling coffee sales in the US. In 1999, coffee sales outpaced energy drink sales at a ratio of nearly 36 to 1. As of 2013, this ratio has evened out drastically with coffee now selling at a ratio of 1.5 to 1. The demand for these beverages has opened up space for competitors.
Education on Nutritional Value of Energy Drinks: Consumers seeking an energy lift that do not want to consume sugary beverages has fueled the rise of these hybrid products.
Key Takeaways for Sponsors:
Understand Category Dynamics: The beverage category is becoming increasingly crowded, with a blurring line between product types. Challenger sports drink brands like Biosteel and Bodyarmour are touting how they will boost energy while Energy Drink brands are now touting their health benefits. With so much competition for mindshare, sponsors must be clear and deliberate in establishing a unique value proposition and brining that to life through sponsorship.
Secure On-Site Sampling: Relationships with brand ambassadors can help amplify and authenticate a health-focused positioning. However, energy drink sponsors should consider adding larger-scale events to their mix where they can offer on-site sampling to a built-in relevant audience.
Be Prepared to Invest in Owned Properties: Given the fierce category competition, brands must be prepared to learn from an industry leader and adopt the “Red Bull” approach by building their own properties and proprietary programming, allowing for message control and full attribution.