Pumped Up: Muscle Milk

When you think “Muscle Milk,” you might think of scads of Schwarzeneggers pumping away in the weight room – and that image isn’t exactly undeserved. When the first Muscle Milk-branded product hit shelves in 2000, it arrived with a slogan that clearly identified it for its target audience: “Builds Muscle like a Mother.”

But Cytosport, Muscle Milk’s parent company, dropped that slogan after recognizing the potential for what had been a gym-centric product to grow out of tubs of powder into a ready-to-drink protein beverage with appeal for workout fanatics and little old ladies alike. And it’s happened. The brand has busted out of the gym and is rolling into convenience stores nationwide. It loses a little more of its meathead image with every case unloaded at 7-Eleven, and now its entering the shopping habits of “mainstream” consumers. Distributors think Muscle Milk has the uniqueness and smarts to carve off its own, permanent corner in convenience and grocery channels.

“It attracts consumers with its taste and the high amount of protein,” said Jerry Reda, Vice President of Sales for New York distributor Big Geyser. “What we thought we would sell in a month, we’re selling in a day now.”

While that transition might seem like a leap, the company’s confidence to wage a campaign on mainstream channels has grown out of its domination of its original arena. Muscle Milk’s brand identity and origins braid tightly with the rise of both nutrition stores and the health club industry; that growth itself is tied to the new American “get healthy” ethos. According to a 2007 report by Active Marketing Group, a consulting firm that helps companies connect with active consumers, the number of health clubs in the U.S. grew every year between 1998 and 2006. The nutritional products industry experienced similar growth. GNC, the standard-bearer for their industry, expanded its operation from 3,700 locations in 1998 to 5,000 locations in 2008, and the healthy living trend grew beyond specialty consumers. Not only have products like vitaminwater and Naked Juice’s protein smoothies popped up in mainstream channels, but GNC signed a deal with Rite Aid that put GNC-branded nutrition aisles in the chain’s pharmacies.

As exercise and nutritional supplements grew in popularity, Muscle Milk grew faster. Word of mouth spread, and the brand accumulated quiet credibility with athletes of all levels. In 2003 Cytosport added more powder flavors (they now have 23). In 2004, they introduced their first RTD in tetrapak.

Eight years after the brand’s debut, John Blair, Cytosport’s Executive Vice President of Sales for DSD, said it now regularly ranks as GNC’s top seller. It sells so well, he said, that a GNC clerk recently told him that the store couldn’t get customers to buy Muscle Milk out of the cooler. They were too busy buying it – warm – by the case.SORT OF ADDICTED

Part of the brand’s success has been its broad appeal that extends across gender lines – just ask Diane Curcuru.

“About a year ago I began working out with a trainer who got me drinking the Muscle Milk. I had never thought it made much of a difference,” Curcuru said. “[But] my body has totally changed. I’m really happy with my results. I’m sort of addicted to it now.”

Curcuru, a 25-year old studio coordinator for an audio firm in New York, said she used to think the product was only for “meatheads,” but now uses it as both an exercise aid and an occasional meal replacement.

Meanwhile another GNC staple – protein bars – crept into convenience stores, took a regular place next to the peanuts and M&Ms and led the way for Muscle Milk to make the same transition. But 7-Elevens aren’t the same as GNCs, and Cytosport brass were forced to tinker with the brand to achieve better mainstream appeal.

First, Cytosport redefined its target audience. While the bench-press regulars might buy an RTD Muscle Milk at a minimart to supplement his tub of powder at home, said Nikki Brown, Cytosport’s vice president of marketing, the company now markets the RTD brand as a “healthy alternative beverage” for people with active lifestyles – like Curcuru.

Second, Cytosport switched the product from an early tetrapak package to 14 oz. plastic bottles. The new packages agree better with cooler cases, with consumers accustomed to CSD bottles, and with the inevitable bumps and bangs on their ride through the DSD network.

“The chances of an inadvertent puncture are higher [with tetrapak],” said Mark Campbell, a division manager with Auburn-Mass-based Atlas Distributing, Inc.

Even before that switch, though, Muscle Milk met with a surprisingly receptive mainstream populace. Big Geyser’s Reda said both distributors and retailers were initially hesitant of the brand. At $3.50 to $3.99 per bottle, it asked for a bigger investment out of consumers. It also created a new category, he said, and few categories catch on – but this one has.

And Reda said that success helps distributors’ and retailers’ bottom lines. Muscle Milk offers one of the best penny and gross profits of any beverage on the market, he said.

GROWING PAINS

That early success, though, was more than Cytsport could handle. The product pulled off the shelves so fast that Cytosport’s Missouri-based co-packer couldn’t bottle it fast enough. Blair doesn’t blame that on the bottler. The region suffered some of its worst weather in history this year, he said. But, still, the company opted to make arrangement with a new bottler.

“I don’t think there’s anything we can throw at that co-packer and not meet demand,” Blair said.

That success brought rumors of potential buyouts from both Coca-Cola and Anheuser-Busch. Instead, Cytosport closed an investment deal last June with TSG consumer partners.

“We think the brand is very attractive,” said TSG Vice President Brian Krumrei.

He called Muscle Milk “the” brand in the RTD protein enhanced beverage category, a position that has grown the brand’s sales to roughly a quarter of Cytosport’s business. Krumrei also noted that, while the brand has competitors – like EAS’ Myoplex, Labrada Nutrition’s Lean Body and Worldwide Sport’s Pure Protein Shake – Cytosport “has a leading head start.”

TSG’s money will help maintain that head start – and the talent Cytosport brought in certainly helps. Blair, for one, worked at both SoBe and Fuze, as did John Kenneally and Melody Conner, who manage DSD sales for Muscle Milk’s East and Central divisions, respectively. Dean Pulver, who heads up West-coast sales, worked for both PepsiAmericas and Pepsi Bottling Group.

And Muscle Milk is the tip of the sword for Cytosport. Atlas’ Campbell said he recently attended a half-day event where the company started pushing side products. While early reports said the company planned a three-product line for consumption before, during and after a workout, Cytosport has refocused its flanking-brand focus to only Cytomax. Similarly, the company delayed efforts to promote their kids’ drink, Mighty Milk. The reformulation of Muscle Milk includes less sugar, and far more protein than most kids drinks. It comes packaged in 8 oz. tetrapak boxes. Company founder Greg Pickett “continually brings more ideas to the table,” according to Blair, and the company still has a collection of products in powder-only format – though CytoGainer, Monster Milk and Joint Matrix may never be ready for the mainstream.

While Cytosport has already achieved the kind of success that fuels the dreams of beverage entrepreneurs everywhere, the ride isn’t over. In addition to the potential success of their flanking RTDs, Reda said he thinks Muscle Milk has a long way to go. The brand is just scratching the surface, he said, and Big Geyser is just scratching the surface of what it can do with the brand in New York. Cambell, not far away in Central Massachusetts, agreed.

“I think it’s here to stay,” he said. “The more word gets out, the more the brand’s gonna grow.”