Rowdy Energy announced today that it has raised $13 million in a fundraising round intended to shore up the brand’s marketing initiatives and finance new innovation.
Launched last year, Rowdy Energy is a better-for-you energy brand founded by CEO and Suja founder Jeff Church and NASCAR star Kyle Busch. Made with naturally sourced caffeine from green tea and L-theanine, Rowdy Energy is available in seven flavors Peach Mango, Sour Green Apple, Cotton Candy, Chiseled Ice and Strawberry Lemonade (all containing zero sugar) and Cherry Limeade and Orange Citrus (containing 18 grams of sugar per 16 oz can).
The new financing is backed by a team of 40 investors, including private equity fund CircleUp, The Kraft Group, Camping World CEO Marcus Lemonis, record executive Scott Borchetta and Fanatics executive chairman Michael Rubin.
“Rowdy is one of the only brands using clean ingredients that is well positioned for the mainstream distribution channels, and Jeff and Kyle bring the experience and relationships to fully execute on the opportunity,” said Ben Lee, managing director of CircleUp, in a press release. “We are thrilled to partner with them in building the next iconic energy brand.”
Speaking to BevNET today, Church said the majority of the financing will go towards strategic marketing programs, with at least half of its marketing budget going towards field campaigns and sampling efforts. In addition to field marketing, Rowdy will increase its trade spending, working closely with retailers to drive in-store programs that will drive further trial.
“One of the things I learned at Suja was that repeat rate is really important,” Church said. “Suja had about a 48% repeat rate, so we really designed Rowdy with the intent that it would be well liked by consumers and in a position so that the sales are incremental for retailers and that we’re not just asking them to swap something out.”
Rowdy is available in over 25,000 retail stores nationwide, including Publix, Albertsons, H-E-B. Food Lion, Circle-K, CVS, Casey’s General Store, Murphy USA and WaWa. Satisfied with its current footprint, Church said the goal now is to increase velocities at its existing accounts. The company currently has 12 employees on its field marketing team and has emphasized CPG and beverage experience in its hiring, Church said. The brand will continue to expand its sales and marketing team this year.
Beyond the core product, Church said the company will also put some of the financing towards clinical trials for a new product line called Clean Burn, a calorie-burning beverage product with claims that need to be scientifically verified before it can go to market.
Since Rowdy launched in retail last spring, the energy category has continued to see a shift towards better-for-you products in mainstream markets. In January, Molson Coors launched ZOA, a clean energy brand positioned similarly to Rowdy and backed by actor Dwayne “The Rock” Johnson. In recent months, fitness energy brand CELSIUS has seen sales jump double digits in retail, up 218% to $120.1 million in the two-week period ending April 24, according to market research firm Nielsen.
Church said the success of CELSIUS and emergence of ZOA is helping drive awareness for clean energy drinks that helps confirm Rowdy’s positioning. However, the challenge for the brand, and its competitors, is stamina, noting he expects Rowdy will spend between $30-$40 million over the next five years to win in the market.
“I know some people do worry about competitors, but some will make it and most won’t,” Church said. “ZOA certainly has a strong backer with The Rock so that gives them a leg up, but we have Kyle. And Kyle’s out talking about the brand every chance he gets and there’s a lot of PR behind it so I’m really happy about where we’re at.”