Dive Brief:
- AB-InBev’s Anheuser-Busch is teaming up with sports nutrition and supplements company 1st Phorm to introduce a line of energy drinks and related beverages. The collaboration will involve Dana White, a prominent figure in sports and entertainment.
- The first product to launch from this partnership will be Phorm Energy, set to debut in the market during the upcoming summer season and distributed through Anheuser-Busch’s network of wholesalers.
- This move will allow the beer giant to expand its presence in the competitive energy drink category, currently dominated by brands like Monster, Red Bull, and Celsius.
Dive Insight:
Given the challenges faced by the beer industry with declining sales and shifting consumer preferences, brewers are seeking new avenues for growth. The energy drinks market, valued at $21 billion, presents a lucrative opportunity for diversification.
Anheuser-Busch’s competitor, Molson Coors, made a strategic move by acquiring a majority stake in Zoa, an energy brand created by Dwayne “The Rock” Johnson. The success of Zoa, with a high repeat purchase rate and new consumer adoption, highlights the potential for growth in this segment.
Through its partnership with 1st Phorm, Anheuser-Busch aims to leverage White’s influence and expertise in brand building to drive the launch and promotion of Phorm Energy. The collaboration combines 1st Phorm’s industry experience with Anheuser-Busch’s innovation and scale in the beverage market.
While Anheuser-Busch has previously dabbled in the energy drink space with the acquisition and subsequent sale of Hiball, this new venture signifies a more significant commitment to the category.
Analyst Robert Moskow points out the challenges facing the brand in a crowded market where most energy drinks make health claims. Despite ABI’s distribution capabilities and White’s involvement, breaking into the competitive space will require strategic positioning and differentiation.
Non-alcoholic beverage companies like PepsiCo and Keurig Dr Pepper have also made strategic acquisitions to strengthen their presence in the energy drink market, signaling the growing importance of this segment in the overall beverage industry.
As Anheuser-Busch ventures into the energy drink space with the launch of Phorm Energy, the collaboration with 1st Phorm and Dana White underscores the company’s commitment to innovation and diversification in response to evolving consumer trends.
Updates with analyst comment
