Athletes Keep Imbibing—And Investing—In The Drink Space
Water, energy drinks, special elixirs infused with this and that, the non-alcoholic beverage category has not slowed down with the pandemic, and the astute “athlete-investor” keeps pouring dollars and promotional support into the mix.
Case in point this week when not one, not two but several elite athletes, including Patrick Mahomes and Steph Curry, put their names, and dollars into the mix.
First, Mahomes announced his first-ever investment endorsement, not with Gatorade, but with BioSteel Sports Nutrition, a Toronto-based company that is looking to expand its U.S. footprint with its drinks, powders and most recently CBD (although Mahomes is not involved in that part of the business yet), following Canopy Growth, a Canadian cannabis company, taking a 72 percent stake in BioSteel last Oct.
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Excited to announce the newest member of #TeamBioSteel as a partner- @patrickmahomes! Mahomes was first recommended BioSteel products by his trainer, Bobby Stroupe (@stroupebob) several years ago, and we’re proud to have been part of his journey. It’s time we make it official to help pass the truth onto future generations! The best kept secret in sports is no longer a secret #ItsJustTheTruth. Head to the link in our bio for the full press release! #TeamBioSteel
TMR All-Stars and MVPs can learn more about BioSteel in their FactBook profile
Then came the news that Warriors star Steph Curry, already the face of Brita water as an endorser, went in as an investor and global face of OXIGEN, a pH-balanced water (rebranded from Formula Four in 2019) that is boosted with oxygen and contains electrolytes. OXIGEN—whose bottles are made from 100% recycled plastic—has recently secured listings at a number of major retailers, including Kroger and CVS after experiencing nearly 400% sales growth year-over-year over the past three years.
“So I started to ask questions around what the business is like, what their mission is…and [realized] there’s a lot of synergy” in terms of health and wellness, and sustainability, Curry told Forbes this week.
“Unsustainable products are causing harm to the world with their productions. There’s a huge need that we try to step up…and put our money where our mouth is,” Curry added. “I also think it’s here to stay in terms of people being really mindful about what they put in their bodies.”
Then we have BodyArmor sports drink founder and chief executive Mike Repole. The disruptive brand, co-owned by Coca-Cola, already had the late Kobe Bryant, along with Mike Trout, James Harden, Skylar Diggins-Smith, Baker Mayfield and Rob Gronkowski, on board as investors and endorsers.
This week they added partnerships with seven new athletes: Ronald Acuna Jr., Sabrina Ionescu, CeeDee Lamb, Drew Lock, Christian McCaffrey, Kemba Walker and Trae Young.
Now this space is not new and is highly volatile, and while many, many—see Powerade, Accelerade, Propel, Honest Sport—have tried to knock Gatorade from its perch while also taking on a host of niche lifestyle products, none have fully succeeded.
“Gatorade is Blockbuster video. It hasn’t changed or evolved. BodyArmor is Netflix,” Repole told The Drum this week. “Drinking Gatorade is like expecting tennis players to wear short shorts and use wooden rackets. Expecting today’s athletes to drink the same sports drink from 55 years ago is comical.”
Expecting today’s athletes to drink the same sports drink from 55 years ago is comical.
Comical maybe, but successful for sure. And the run on big name athletes finding white space not named Gatorade in the healthy drink and snack category wasn’t taking place in a torrent of activity only this week.
Earlier this summer, Ready Nutrition, another fast growing brand founded by former Pitt basketball and football player Pat Cavanaugh brought Giannis Antkenotempo into the fold as an investor and brand ambassador, joining another prominent athlete, two time NFL defensive player of the year Aaron Donald, as a stakeholder in the brand.
Like with Mahomes, Ready—whose brand partners include the AAU and several hundred colleges and according to Cavanaugh will have sales well in excess of $100 million this year—was an investment toe dip for “The Greek Freak” as he also starts to fill out places he is putting his money, as well as his image.
But what do you look for when you bring in an athlete as an “investor”?
Like any agreement, hash out expectations up front
Do these elite men and women athletes have the time—and the business acumen—to help grow the business, as well as the revenue that comes from the association and in many cases, an athlete’s established strong social media presence?
“There is lots of investor money in the space, and you have to be able to find the right person who is engaged and understands the brand, the goals and the audience vs traditional investors who may be looking to just make a quick return,” Cavanaugh tells TMR. “We don’t actively go looking for partners but when we get introduced to someone that could be a possible fit for our brand; we take the time to get to know the person. In regards to Aaron and Giannis, they are great people who like to help others and they work extremely hard. Their mentality fits our mentality. It certainly helped they were users of our products prior to finalizing any relationship with us. It increases your chance for success when you can find investors like that.”
We don’t actively go looking for partners but when we get introduced to someone that could be a possible fit for our brand; we take the time to get to know the person.
-Ready Nutrition’s Cavanaugh
That can be a slippery slope sometimes, especially in a fluid space like energy drinks.
“There are all kinds of factors that go into deals like this, some of which involve not just athlete name and likeness, but how close you can come to mentioning team and league names when the partner is actually a competitor [of the team’s or league’s official partner],” explains Chris Lencheski, CEO, Winning Streak Sports and professor at Columbia University, who brought several drink deals to the table during his time in NASCAR and other motorsports. “You have to be able to get the marketing buy in, but when you are giving up equity, both sides have to understand what their roles are. That takes time and effort and expertise that frankly many people don’t have in a particular area, other than saying they like the taste and the color. The best partnerships overcome that, and athletes are more astute and engaged than ever before, but it still can be a challenge.”
The challenge, Cavanaugh pointed out, is in select involvement versus full-time commitment.
“They are very involved in all aspects of the business without taking away from what they have to do with their teams,” Cavanaugh adds. “Our philosophy is to allow the players to stay focused on their #1 job during the season—helping their teams win a championship. Everything else follows. Money is always important, but for us, the partnerships and the time they put in for the long term is more important, and people will see that as we roll things out with both of them in the coming months.”
With the fall being an ubercrowded marketplace with so much return to play and completion of seasons, the sponsor engagement platform and news should be heating up, and with it, the necessity for cooling down. The ability to tout the differences in Brand A v. Brand B may be very slight, but using big names to amplify and cut through clutter is becoming more tantamount, and as we have seen in the announcements this week and earlier this summer, finding the right engaged athlete and giving up a piece of the pie in the drink space is heating up.
Who will win and how will these bright names shape up as engaged investors? We will have to sit back, take a sip and see where it goes.