KSI and Logan Paul’s Prime Hydration is on fire. Should Gatorade be worried?
This breakout brand has garnered historic hype. However, beverage experts wonder aloud about its long-term prospects.
Is Prime just a fad? / Prime Hydration
Consumers fighting in the aisles of Aldi in the UK. American moms begging workers at The Vitamin Shoppe to place a few bottles on hold for their sons. What is going on with Prime Hydration?
Prime was announced a year ago via a live Instagram feed from popular YouTubers KSI and Logan Paul. Previously, KSI and Paul met in the boxing ring – not once, but twice. KSI, who is also a rapper, won the second bout by split decision. Paul, the controversial influencer, who notoriously once filmed a dead body on his YouTube channel, is also a wrestler with the WWE.
While they certainly have a lot of fight, neither has any beverage experience. What they do have is about 50 million online subscribers between them. They’ve leveraged this clout to the hilt to promote a product that would normally seem like something of a sports drink copycat.
Prime Hydration beverages consist of 10% coconut water, 250 mg of BCAAs, 830 mg of electrolytes as well as antioxidants and vitamins – all at only 20 calories. The product comes in flavors such as Blue Raspberry, Grape, Ice Pop, Lemon Lime, Meta Moon, Orange, Strawberry Watermelon and Tropical Punch. Prime’s energy drink line, launched this year, includes Blue Raspberry, Lemon Lime, Orange Mango, Strawberry Watermelon and Tropical Punch.
As for the taste, Gordon Ramsey gave it a stinging zero out of 10 rating. He likened it to drinking perfume. Ken Sadowsky, veteran beverage analyst and US advisor to the global investment group Verlinvest, says, “I didn’t think much of it when I tried it.” Sadowsky has been part of the success of Vitaminwater, Vita Coco and other top beverage brands.
Yet, this “viral hydration” drink continues to make headlines about its scarcity. Its website is rife with “sold out” banners. Currently, some UK stores are rationing the amount that consumers can purchase. In the US, “gas stations near junior high schools are burning through 50 cases a week if they can get it,” says Sadowsky.
After one store, Wakey Wines in the UK, was caught reselling Prime for $120 a bottle, KSI took to social media to say, “Oh my god, no!” and that he “hates” the price gouging that is happening. This video, of course, just elevated the hype.
A bad batch of product results in great headlines, but a questionable future
At the core of the brand story was the type of incident that would normally sink a brand. Last month, a production error forced Prime’s UK manufacturer Refresco to destroy thousands of bottles. This only whipped consumers into more of a frenzy.
Still, this could cause problems in the long term, says Beverage Digest editor Duane Stanford. “Free press isn’t always a great thing. What you really want is that interest after you have the product in-store and then to drive repeat purchases. You want [consumers] to create a habit of drinking the product… I’m sure they’re working overtime to figure out how to spin this in their favor. But not having it on shelves is not a good long-term strategy. You don’t want to create too much ill will towards your brand.”
Another issue down the road will be building loyalty among the distributors who actually get the product into the stores. “I’ve heard anecdotally that the contracts stink,” says Sadowsky. That means that “once the brand loses the heat, you’ll lose the attention of the distributors and the salespeople,” he says.
For now, Prime “is a lot of sizzle but no steak,” says Sadowsky.
“It reminds me of the Beanie Babies or Cabbage Patch Kids,” says Stanford, comparing the brand to toy fads of yesteryear.
Yet others see potential down the road. “It has been explosively popular in the US and UK, if they could only keep it in stock,” says Gerry Khermouch, editor of Beverage Business Insights. “It has had a really big impact. Is it the next Body Armor?” (Body Armor is the performance beverage that Coke bought to compete with Gatorade for $5.6bn).
The Clooney effect: influencers as brand marketers
No matter what the brand’s fate may be, Prime is another interesting example of power of celebrity. It used to be that a brand would be built and then an influencer would be paid to endorse it. Increasingly, today, celebrities are becoming involved in the development and marketing of products – especially in the spirits category. There’s Matthew McConaughey and Wild Turkey; Diddy and Ciroc; and, perhaps most notably, George Clooney and Casamigos. Clooney sold the brand for $1bn to Diageo.
Ryan Reynolds’ Aviation Gin also sold to Diageo for $335m with $275m more on the table depending on the brand’s production. (Now, there are also rumors of T-Mobile buying Reynolds’ Mint Mobile).
As for Prime’s future? “I could possibly see it as a bolt-on as the new kid’s Gatorade,” says Sadowksy. “Congo Brands [which owns Prime with KSI and Paul] can build it as far as they can and a major soft drink player will say ‘look at the power of our distribution system’.”
Of course, there are downsides to such celebrity involvement. For example, The Independent ran an op-ed early this month accusing Prime of “monetizing misogyny.”
Beverage Business Insights’ Khermouch says: “It’s possible that Logan Paul as the face of a brand might give some [investors] pause.”
Congo Brands itself recently experienced the downside of celebrity. It had to scrap its Down South brand when it couldn’t come to an agreement with country singer Morgan Wallen, according to Sadowsky. “That’s how dependent they are on influencers.”
Prime did not respond to requests for comment.
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