The plan is simple: leverage the brand strength and distribution gains of NEO Water in the natural channel to launch an energy drink where few products currently exist. The execution? It’ll take some time, but the strategy appears to – excuse the expression – hold water.
NEO North America is set to debut NEO Energy, a certified organic energy drink made with electrolytes, at next week’s Natural Products Expo West show in Anaheim. The beverage contains a blend of organic guarana and green tea extracts, B-vitamins, electrolytes and antioxidants, and is sweetened with organic cane sugar.
The company will initially launch NEO Energy in the natural channel, and attempt to align the beverage with the growth of its high alkaline and electrolyte-infused water brand and the overarching consumer shift toward health and wellness.
“I think it’s the perfect time to launch,” said Ben Behrouzi, founder and president of NEO. “You go into a Whole Foods or a natural foods market, which is our segment, how many energy drinks can that natural consumer buy off the shelves? There aren’t that many. It’s a fairly new category, and I think it’s going to be a very big category as the health and wellness [movement] continues to grow.”
Behrouzi noted that while there are a handful of competitors marketing organic energy products, few, if any, are made with additional electrolytes.
“If you’re able to get that additional hydration benefit from your energy drink, that’s a fantastic business leap on the market,” he said. “Our customers, our retailers understand that there is a gap. You really don’t have a product that speaks energy in a healthy way.”
Packaged in an 8.4 oz. slim can, the design and blue/white color scheme stay true to that of NEO Water. The drink will launch with a single SKU at a suggested retail price of $2.79. Behrouzi said that he expects to introduce other pack sizes over the course of the year.
Behrouzi described the target demographic for NEO Energy as both male and female consumers aged 22-47 who are generally health-conscious, natural foods consumers. Behrouzi said that while the core consumer base for NEO Energy would likely be comprised of the type of individuals who purchase NEO Water; as the water brand penetrates new retail channels, he expects interest in the energy drink to follow.
As for distributors of the new product, Behrouzi only offered hints of compelling demand, and said that while NEO would announce its retail and distribution partners at Expo West, “the response already has been tremendous.”
“There’s quite a bit of presale going on,” he said, estimating that NEO would produce approximately 30-35,000 cases of product in its initial run.
Behrouzi said that throughout 2013, NEO would be developing a nationwide sales force, including a sales director and vice president of sales to handle development of both brands. And as profitability is at least a year or two away, Behrouzi said that the company is aiming to complete a second round of funding within two months in order to support new marketing and retail initiatives.
Ambitious as it is to launch an energy drink in an already crowded field, Behrouzi said that he has a grander vision for NEO as a brand as one that represents a range of new products in the coming years.
“Our job is to make sure that NEO is not defined as a water or energy drink,” he said. “NEO is a company that produces healthy, New Age beverages. We still have opportunity to be able to solidify that sort of definition for our brand.”