When he began exploring the idea of launching a sports drink, Patrick McGinnis already had a consumer profile in mind.
“One of the things we always knew right away was that we didn’t just want to sell to just healthy adults,” McGinnis, founder of Cincinnati-based Thirty Drinks, told BevNET earlier this month. “Kids were always a major focus.”
What he didn’t know at the time was the place his brand would find that consumer: not on retail shelves or restaurant menus, but inside school cafeterias. Over the last months, McGinnis has steered Thirty — a five-SKU line of 30 calorie sports drinks in 12 oz. PET bottles — through a pivot in strategy that he hopes will lay the foundation for future success. Having started with 200 schools in the Cincinnati area, the company is now targeting expansion in public and private school lunch programs, and the founder is committed to this year making this unique food service channel “the backbone of the company.”
“In those lunch lines, Pepsi and Coca-Cola, although they may have contracts for the school, they can’t really alter the cafeteria program,” he said. “That’s where we have a great opportunity.”
That opportunity, according to McGinnis, is due in large part to Smart Snacks in School, a set of federal health statutes that outlines what types of food and beverage products schools are permitted to sell. For kindergarten through grade seven, only water, juice and milk are allowed. Instead, Thirty is targeting grades 8-12, which allow the sale of drinks that contain up to 40 calories per 8 oz serving.
Within the school retail environment, Thirty commands a slightly more premium positioning than its main competitors Gatorade and Propel, according to McGinnis. The drink costs between $1.50 and $2, with margins dictated on an individual school level. But while the segment’s size is limited, McGinnis emphasized the importance of the chance to gain consistent exposure with hundreds to thousands of kids and young adults in an environment in which their beverage options have been minimal. In spending time sampling the product with students at schools around the country, he found an audience unafraid to give unvarnished opinions, whether positive or not.
“For me, (the interaction with students) was really the buy-in. I needed to see it first hand,” McGinnis said. “We would have a sampling session for an entire lunch period where we would give away some free product and a couple hundred kids would come in; if they liked (the drink), they would throw it in one basket and if they didn’t they would throw it in another. For me, I needed to see it. This is a new demographic for me, and they are honest. They don’t care if I feel bad.”
Winning over new consumers — in this case, kids and young adults — at school is one component of Thirty’s growth strategy; the other part is winning over new customers — in this case, those children’s parents — on retail shelves.
“I’ve taken certain results from schools to some of our retailers like Kroger and Target and said, ‘Look, this school is right across the street from your store and a couple hundred kids a day are drinking this product. How do we piggyback off that?’” said McGinnis. “In a very crowded space that’s been dominated for a very long time, it’s something that makes us different.”
A differentiated approach will likely help Thirty in an over $6 billion U.S. sports drink category in which The Coca-Cola Company (Powerade/BodyArmor) and PepsiCo (Gatorade) vie mainly amongst themselves for leadership. Thirty’s route to market may be a bit different, but the brand has staked its identity on the simplest of concepts: its trademarked tagline is “the healthy sports drink.” As the emergence of trends like functional hydration have blurred the traditional borders between drink categories, McGinnis said using the “sports drink” label has helped mainly to help consumers understand Thirty’s flavor profile. The product — available in Raspberry Cherry, Tangerine Orange, Strawberry Watermelon, Lemon Lime and Acai Blueberry varieties — contains electrolytes and B vitamins and is sweetened with a combination of 7 grams of cane sugar, stevia and monk fruit extract.
Thirty is currently sold at retailers including H-E-B and HyVee, and will continue to expand its retail offerings this year with the introduction of a multipack format. Yet schools is where McGinnis sees the most important brand growth coming from.
“If we can get these kids enjoying our product, we can correlate that to Mom and Dad going into the grocery store and purchasing our product,” he said.