The sports drink market is dominated by beverage giants Coca-Cola KO and PepsiCo PEP. Both companies have introduced products and acquired brands in the space over the years.
But Prime, a sports drink/energy drink brand, is just two years old and recently sold its one billionth bottle. It also continues to land major endorsement deals. Should the beverage giants be worried?
What Happened: Beverage and food stocks like Coca-Cola and Pepsi are currently seeing the impact that weight loss drugs could have on revenue and consumer spending habits. The beverage giants also have several emerging brands in the sports drink and energy drink markets that could encroach on their existing brands.
Launched in January 2022 by popular YouTubers Logan Paul and KSI, Prime has become one of the fastest-growing beverage brands.
The company announced it is launching 48-hour pop-up stores in New York City and London on Nov. 10 to commemorate one billion bottles sold. Prime will also host a "PRIME Gold Bottle Instant Win Game" at each location. One winner at each pop-up will get a 24-karat gold Prime bottle valued at $500,000.
PRIME pop-ups will include gold paintings, sculptures and fan prizes along with a vault case holding the 24K gold PRIME bottle.
"We do everything BIG. Since we created PRIME, we've made our own blueprint when it came to marketing, scaling, and building the brand. In a short period of time, we've become the fastest growing beverage company in history, selling our one billionth bottle in just year two," Paul and KSI said in a joint statement.
In the company's first year, retail sales hit $250 million, with stores often selling out of the drinks. Distribution deals and strong demand have helped PRIME get into key retail locations including Target, GNC, Kroger and Walmart.
The company launched its first caffeinated beverage Energy in 2023.
Along with strong brand awareness thanks to the large social media followings of Paul and KSI, whose real name is Olajide Olayinka Williams “JJ” Olatunji, the company has also enjoyed a string of sport-related endorsement deals.
PRIME has deals with the UFC, soccer teams Arsenal, FC Barcelona and Bayern Munich, and MLB team the Los Angeles Dodgers. Individual athletes signed to PRIME include soccer star Erling Haaland (Manchester City) and NHL star Auston Matthews (Toronto Maple Leafs).
Related Link: Logan Paul's PRIME Energy Drink Answers Chuck Schumer's Call For An FDA Investigation
Why It's Important: Coke and Pepsi compete with Prime in the energy drink space.
Coca-Cola is an investor in Monster Beverage Corporation MNST, while Pepsi announced a $550 million investment in Celsius Holdings CELH in 2022.
Celsius has been posting strong growth as it expands its distribution. The company recently reported record revenue for the third quarter with a total of $384.75 million, up 104% year-over-year and coming in well ahead of consensus estimates of $348.94 million from analysts.
Benzinga previously shared that PepsiCo terminated a distribution deal with energy drink company Bang, which led to speculation that the beverage giant could look at Monster Beverage or Celsius for an acquisition play. While Pepsi took a stake in Celsius, it could be kicking itself down the road that it didn’t acquire the company outright.
With its 19% ownership stake in Monster, Coca-Cola is often mentioned as a potential acquirer of the entire beverage company.
Alcoholic beverage company Constellation Brands STZ was also previously linked with a potential merger with Monster.
Pepsi's deal with Celsius could hold the beverage company over in the space, giving it a strong market share in energy drinks and a dominant position in sports drinks with Gatorade.
Coca-Cola has a strong position in energy drinks via Monster and a less dominant position in sports drinks with its Powerade, BodyArmor and Vitamin Water brands.
With one billion units sold in two years, Prime could quickly become an acquisition target by a larger beverage company.
Read Next: Monster Buying Crafter Brewer, What Investors Should Know
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