Repeat Offenders: Entrepreneurs Reviving KRONIK ENERGY

BY MIRIAM LAMEY

Kronik Energy is a brand that has been through its share of obstacles, but it’s got some new hope. Under the helm of a new management team – one that came in from the outside and scooped it up whole — the company hopes to regain the momentum that made it a regional favorite in the Southwest, and possibly drive forward across the country.

The brand had grown quickly in Arizona early in the decade but its expansion – and subsequent collapse – left a trail of angry creditors. But now there’s some new fuel under Kronik’s hood, in the form of the cash supplied by new president John Gaston and his three compatriots, Ben Gregg (CEO), Chris Wickson (VP of Marketing) and James Gabriele (VP of Operations), all of whom are enamored of two things: high-octane auto racing and high-petrformance company turnarounds. In a packed field like energy drinks, the group knows it is facing a hard road – but they think that there’s some life in the Kronik engine yet.

“The thing about energy is that we know it’s hard to penetrate with an old brand,” said co-owner Wickson. “That’s why we wanted something that still resonated.”

That’s the kind of reasoned thinking one might imagine from an executive team with at least one major success under their belt. And the folks now running Kronik have a doozy: a personal training company that they sold

to workout behemoth L.A. Fitness.

Of course, resonance is great in the mind of consumers – but not so much in the minds of distributors and retailers, for whom the return of Kronik may be hampered by a bad taste left behind by previous ownership. By 2009, Kronik was pretty much inert, having defaulted to creditors and facing foreclosure.

“We were already looking for another venture when we were exiting the personal training deal,” he said, “we had been in communication with Kronik for two years before taking it.” Both Kronik and their previous business were based in Arizona, where the brand had a solid fan base.

An added plus: Gaston and co-owner Ben Gregg are both avid auto racers, active in so-called “Sprint Car” racing, and they felt that the Kronik name would marry well with their other passion.

At the time of the purchase, Kronik had a humble set of assets: a year ago, the company had “three vans, at the most, just out of Phoenix,” Gaston said. Since then, the brand has managed to significantly expand its distribution network across the western half of the country – partly, at least, through a relationship with Coast Beverages, which has shepherded it into several West Coast chain accounts.

So far, the brand has managed to get distribution at Hensley in Phoenix, Sequoia in Fresno, and others, including Seven Wine and Spirits in Nevada, and Superior, Bay Eagle and Merris through Arizona, Utah and Idaho. The brand has hooked up with Coast Brands Group. According to at least one distributor, the new team’s willingness to write checks to help settle the company’s outstanding debts has helped it get back onto shelves.

“We started out just cold calling. Our first priority of business was to reestablish relationships with previous distribution and retail channels that were once there,” Gaston said.

Gaston said he feels putting a human face on the brand has helped it enter its current points of sale, which include AM/PM stores, Rob and Robbie’s, Maverick’s and Nugget’s stores across Northern California. “In our previous business,” Gaston said, “All we had were relationships and partnerships out there. We felt that experience applied in this industry would do us well.”