Learning and Investing: The Growing Role Of Athletes With Brands, Ready or Not

Athlete-investor. That’s a term we’re hearing more and more of as 2021 picks up momentum.

From Serena Williams to Kevin Durant and Steph Curry to Naomi Osaka, having a prominent athlete both on your payroll and in your investment portfolio is a hotter commodity than ever. They can bring valuable social media exposure, establish street credibility and accelerate the launch bounce, especially for startups and disruptors.

Yet, when you look at chatter and buzz vs. actually doing the work, where do you draw the the line between investor and actual business partner? That can get very murky, as athletes, despite all their success, might not be the best at understanding how to engineer a product, develop the brand look, build out e-commerce or navigate FDA rules. They may want to be heavily involved, especially when there is equity involved, but for most it’s not their day job.

Athletes like Dwayne Wade and LeBron James have taken great care in giving input into brands in areas like media and apparel; Serena is very hands on with the design and look and feel of her branded clothing lines; Kobe Bryant was deeply involved with each project he was involved with, including working closely with BodyArmor founder Mike Repole to help take Bryant’s 10 percent stake through a $6 million investment and turn it into more than $200 million.

The question is: are they the rule, or the exception?

One rule breaker, working with a disruptive brand making waves in a very crowded space, is the L.A. Rams‘ two-time NFL Defensive Player of the Year, Aaron Donald. In Nov 2019, Donald joined fellow former University of Pittsburgh athlete, Pat Cavanaugh, to help Ready Nutrition, a company Cavanaugh founded to reimagine health and nutrition for athletes on all levels. Donald was followed in May 2020, by addition of another carefully picked athlete-turned-investor, Giannis Antetokounmpo.

Until now, Ready designed and sold protein-infused sports drinks, protein powders, snack bars and plant-based functional snacks. But this week, they are wading into much deeper waters: the sports drink category.

Cavanaugh (L) and Donald will have many more lighthearted moments like this if Ready’s new sports drinks take off Ready Nutrition

The drink, available in eight flavors, has “zero added sugars” and “triple-electrolyte” ingredients sodium, potassium and chloride. As a result, the drinks are not sugary sweet, but the results for an upstart brand—reportedly over $100 million in sales over the past 12 months before the sports drink launched—are very tasty, especially for the two superstars in their sports.

The product took nearly 18 months to refine before going to market, and even without the massive spend we have seen for incumbent brands like Pepsi‘s Gatorade and Coke-owned Powerade and BodyArmor, it has been able to garner key shelf space in a very short period of time. In fact, it is already being carried in more than 3,000 stores, including Albertson’s as well as most big box stores and at Amazon, all just in time for Super Bowl.

Donald, who had direct input—and sign-off—on everything from the flavors to unique bottle designs, is thrilled with everything from the experience to the final product. Reports have Donald’s initial company stake at 10 percent.

“Pat has had me involved in every aspect of the business; we tested and picked the flavors and the colors, we custom designed the bottle so that it had a unique shape, we talked through how all the marketing would work, we are true partners,” Donald told WIP Radio on Wednesday as he and Cavanaugh embarked on a media tour to promote the brand. “I put this in my body, my kids drink it, I needed to make sure it was what I wanted and needed as an athlete, and it is something young people who are getting pulled into sugary drinks can have as another choice.”

Antetokounmpo is looking to grow his supermax bank account by not just investing in Ready Nutrition, but being a business partner Ready Nutrition

That input from a truly invested athlete, along with Ready’s distinctiveness and its unique offering has put the company in a position to succeed like few others so new to the market. For 2021, TMR estimates sales in the mid seven figures. And you can count on the company to be very active in the college space, given that they are already the Official Sports Drink of nine DI conferences and 156 schools. And they have relationships with more than 200 schools through their energy bar line. Expect more news coming as we get closer to March.

“You need to prove out to these retailers that people will come in and pull that product off the shelf,” Duane Stanford, editor of Beverage Digest told CNBC this week. “And if they don’t pull it fast enough, then that window, especially these days, can close up quickly.”

Keeping the window open, Cavanaugh said, are grassroots partnerships and the time investment from a partner like Donald, who has come back to Pittsburgh from LA for extended periods of time in the offseason, while Cavanaugh has set up an LA office (and is working on one in Milwaukee for “The Greek Freak”) to sit and understand the nuances of a very complex business.

Ready launches today with eight flavors that rely on “super fruits,” unique bottles and lots of input from their athlete-investors Ready Nutrition

“Aaron is invested in this business way more than most, his input into all aspects of what we have done is why we are growing and why we are a success,” Cavanaugh told Fox Radio’s Doug Gottlieb as well on Wednesday. “He is an invaluable and engaged partner, not just an endorser.”

Now make no mistake about it, to have two coveted athletes supporting a brand with their name and social following, as Ready has with Donald and Antetokounmpo in the drink space is rare enough. Having them making product decisions that can impact consumer spending directly on thanks like bottle design and taste is even more special.

However, we are seeing more and more of these business savvy and hands on deals starting to move to the forefront. Some, like Ready go very deep, others are more of a learning experience for both parties. The investments are more intimate and personal, peer-to peer experiences, and as a result the reward, and the risk, can be much higher.

Money and learning where one’s face is a growing opportunity for brands willing to listen learn and invest, not just in marketing, but in people too. Just ask two Pitt grads how it’s working out.

Chris brings deep sports business experience to his role as publisher of TMR. He first put his sales, experiential marketing, PR, sales and valuation skills to work in sporting goods retail in 1986. He has since worked for brands and agencies across all major league sports, plus golf, college athletics, marathons and motorsports. Chris is also the proud founder of Painless Networking.