Sunday, April 18, 2010

The Reinvention of Sweet

Published in C-Store Canada, November-December 2009:
Energy drinks have made a big splash in the retail market, with such brand names as Red Bull and Rockstar often visible as soon as you walk into a convenience store.
That’s a big change from 10, 15 or 20 years ago, when the highly caffeinated Jolt Cola was practically the only recognizable "energy" drink of any kind. (And it’s really nothing at all like the energy drinks of today.)
Now fledgling entrepreneurs and more established firms have set their sights on another high-energy niche in the market with energy mints, gums and similar confections.
We popped a mint or two and had caffeinated discussions with some successful players in the energy confectionery game.

Luke Van Vliet is business development manager for Toronto-based Big Sky Brands, which markets the Jones and Warp energy mints.
While the extra energy in Jones mints comes from caffeine and taurine, Van Vliet says Warp, on the market for about 10 years, has "more natural" verve enhancers. The key Warp energy ingredients are ginseng and guarana.
To the original peppermint Warp the manufacturer has added green tea and cinnamon varieties.
Who buys these products? "Typically teens and young adults," Van Vliet observes.
"It does veer toward the lower range of the demographics as far as age goes. However, there are customers in the older demographics who will grab the energy products instead of grabbing a coffee.
"Our strategy has kind of changed since the Warp launch back in 1999. It was innovative at the time, as there were really no energy confections to speak of on the market at the time.
"At the beginning, it was a huge part of the strategy as far as the company goes, but since then we’ve kind of moved on and our strategy has changed. We’ve diversified."
The mints are a success, though not nearly of the same magnitude as energy drinks.
There’s no Red Bull-sized success in the energy confectionery market, Van Vliet notes. "I would say that the reason is that people don’t really want to eat caffeine as much as they want to drink it."
He has some ideas on how retailers should place energy mints for consumer response. "Well … you obviously want to get the counter space (at point-of-sale) as much as you can. You get the best profile there," he says.
"Other than that, if you put it on the mint rack it probably would kind of get lost and maybe lose its meaning. It’s hard to communicate what you’re trying to sell on the mint rack.
"You could merchandise it in front of your energy drinks, with maybe a clip strip or some kind of hanger on the cooler door."

Justin Waxman has a success story in the energy gum market and it starts in his university years, which weren’t long ago.
He and Eric Pilon-Bignell were shooting hoops in Waxman’s Hamilton backyard when an errant shot knocked over Pilon-Bignell’s Red Bull.
In reaction, a peculiar remark came out of the latter’s mouth: "They should make an energy drink that doesn’t spill."
At first Waxman thought the response silly, but then he got to thinking about how Pilon-Bignell’s wish could be realized and turned into business vehicle.
Launch Energy Drink Gum – enhanced with caffeine, taurine and B vitamins – was born while Waxman was still completing his business degree.
Waxman marketed the product at McMaster University while Pilon-Bignell introduced the product to students at Queen’s University, where he was in engineering. Nationwide distribution began in January 2009.
"It started as a university product and it kind of ballooned from there," Waxman says at his Hamilton office.
"There’s a learning process that needs to take place, about gum as a delivery vehicle for an energy ingredient," he adds.
"A lot of it is just getting it into people’s hands, getting them to try it."
To that end, packaging and placement are critical. A name containing the words "energy drink" helped define the product, of course. But packaging Launch in narrow cans really drove home the point that it’s no ordinary chewing gum.
Such retail heavyweights as 7-Eleven, Mac’s and Husky have further cemented the link by placing Launch next to energy shots like Red Bull and Monster.
Waxman sees "unlimited" growth potential for Launch. "One of our keys is the constant growth of our team of grassroots Launch reps, athletes and brand ambassadors," he says. "We are truly embedded within the energy and extreme sports culture and our social, customer-focused growth strategy is paying dividends."

South of the border, another young company is celebrating a major breakthrough in the Canadian c-store market. Revive Energy Mints snagged a deal with 7-Eleven Canada in early September.
Revive mints contain caffeine, green tea, ginseng and anti-oxidants for what the Denver-based manufacturer calls "sustained energy."
Its retail program got a makeover with the addition of the 8 Hour Power Pack, a two-mint (instead of eight-mint) package that gives consumers a chance to try Revive at a low price.
Revive Energy executive co-chair Justin Biel says the core market is males "ages 16 to 30 or 35" – people who’ve "grown up with Red Bull."
The company is less than a year old and, like Launch, was founded by two 20-something entrepreneurs. Biel says "about a year and a half" of product development preceded Revive’s launch in early 2009.
Store placement is ideally near point-of-sale for visibility and impulse buying, Biel says.
He agrees distinguishing energy mints from regular mints is crucial to giving sales the kind of boost Revive is designed to give consumers.
"That’s definitely a marketing challenge from our end," he avers.
But he says the young company is up for it, as evidenced by how it’s “been growing on a regular basis, month after month.
“We’re growing upwards of 15 or 20 per cent per month right now in regards of the number of distributorships that we’re procuring. That means we have a lot of people out there promoting our product.
"We are attaining some of these larger retail accounts in such a short period of time. To us that really means that we have a very, very good niche product and we’re satisfying consumer demands that weren’t being met in the energy product market."