Logan Paul may have made his name online with outlandish stunts and skits, but when it comes to the beverage business, the YouTube star turned pro wrestler is completely serious. Having establishing itself as the sixth largest sports drink brand in the U.S. after less than a year on the market, PRIME Hydration is now setting its sights on international growth and expanding its platform with powders and — dropping in the winter — energy drinks.
PRIME Hydration was co-founded by Paul and fellow YouTuber KSI – real name Olajide Olayinka Williams “JJ” Olatunji – in partnership with Kentucky-based CPG company Congo Brands.
The drinks are 10% coconut water and contain B vitamins, antioxidants, zero added sugar and 20 calories per 16.9 oz. bottle. The RTD line is available in seven flavors – Blue Raspberry, Grape, Lemon Lime, Orange, Tropical Punch, Ice Pop and Meta Moon – and sells online for $29.99 per 12-pack. The brand also introduced a new single-serve stick powder line last month in Blue Raspberry, Lemon Lime, Tropical Punch and Ice Pop varieties, which is sold for $9.99 per 6-pack.
Speaking to BevNET by phone this week, Paul said he and KSI have taken a hands-on approach to the brand’s marketing, playing an active role in promoting the drink through their individual social media platforms and plan to appear at in person activations around the world as PRIME prepares for an international launch next year.
“Every influencer can create any product they want. Specifically, with beverage, we’ve seen it before; we’ve seen influencers attempt to make a mark in this industry and fail time and time and time again,” Paul said. “With us, our demo skews younger, 18 to 25, it’s much younger than the traditional sports drink market. So, we’re adding incremental dollars to the category.”
PRIME launched direct-to-consumer at the beginning of the year, selling out online within four days of the January 4 announcement. While the level of demand generated by Paul and KSI’s social media platforms helped make the brand an instant online hit, its growth in brick-and-mortar retail suggests the brand has long-term traction.
PRIME reported $37.6 million in retail sales for the 52-week period ending August 7, according to IRI – making it the sixth largest brand in the sports drink category in MULO and convenience accounts, including private label products (the fifth largest at $66.9 million). In the four-week period ending September 4, PRIME sold an additional $8.3 million and the company said it made another $9.5 million in sales for September. While that may still be a drop in the ocean of category leader Gatorade ($6.5 billion in sales), PRIME has raced ahead of competing hydration beverages like BIOLYTE, Pedialyte and Hoist in just nine months on the market and is likely to become the number five player in the near future. The brand has partnered with Congo Brands’ sales and operations teams to fuel its retail expansion.
According to the company, PRIME has already passed 100 million bottles sold and is currently available in about 20,000 doors nationwide – including retailers like Walmart, Kroger and Target – and is estimated to already have about 1% market share of the RTD hydration category with just 5% ACV. The goal for 2023 is to now expand that brick-and-mortar footprint eightfold to about 160,000 locations in the U.S.
The stick packs are also off to a strong start, with the company reporting about $500,000 in sales in Walmart in the first week of sales.
That growth target is in addition to a planned international expansion, as Paul’s brand has helped raise awareness for PRIME globally. Over the next year, the company is preparing to launch in India (Reliance Retail), Australia (Woolworths and Coles), South Africa (Massmart and Shoprite) and the United Arab Emirates. PRIME will also roll out in Canada in Q1 with expectations of achieving 70% ACV “almost immediately” through distribution partnerships that will open up chains like 7-Eleven and Sobeys.
“As far as where we’re heading, the answer is everywhere in the world,” Paul said. “We truly want to be a global brand, and we believe that because the audience that JJ and I have built online is extensive – the internet is available in most parts of the world, and we’re finding that our silly mugs are popping up on people’s phones across the world – it would be foolish not to capitalize on it.”
Paul first gained social media fame as a teenager, gaining followers on the now defunct video platform Vine and launching his current YouTube channel in 2013, which commands over 23.6 million followers. Though he’s frequently courted controversy in the past, the 27-year-old has begun a new chapter in public life as a pro athlete, fighting boxing champ Floyd Mayweather in 2018 and signing with the WWE last year to launch a wrestling career.
KSI has followed a similar trajectory, beginning his YouTube channel in 2008 and later gaining prominence as a rapper and a boxer, facing Paul in the ring twice in 2018 and 2019.
This turn towards sports, Paul said, made launching a hydration brand a natural next step.
“JJ and I were both leaning into professional athletics, and there wasn’t a thing that we had to promote,” he said. “Which is silly, truthfully – think about it. Over the past 15 years, both of us built these brands online, but haven’t been building a product. We had the eyeballs, but we didn’t have the brand. With PRIME, we were able to leverage the thing that we’ve built into a real meaningful, really impactful business.”
Most recently, Paul was in Las Vegas this weekend for the National Association of Convenience Stores (NACS) Show 2022. Although he didn’t end up making an appearance at Congo Brands’ booth on the floor, Paul said he spent Sunday meeting with representatives from PRIME’s network of around 260 nationwide distributors.
On the show floor, PRIME also previewed its latest innovation – PRIME Energy – a new zero sugar 12 oz. energy drink line set to launch after the new year. The brand sampled five flavors of the line, four imported from the core line (Blue Raspberry, Lemon Lime, Tropical Punch and Orange), as well as Strawberry Watermelon.
“Because of the big, bold, prominent branding that PRIME has, and our trust in repeat consumers, it made sense to attempt to disrupt energy as well,” he said. “And I think we’re going to, because the product is amazing. The marketing is there and it’s going to be available in the biggest retailers across the world.”
Paul said he’s bullish on PRIME’s ability to maintain its high growth level and become a major player within the sports drink and hydration space, which has consolidated around leaders Coca-Cola (BodyArmor, Powerade) and PepsiCo (Gatorade) in recent years.
“I think it’s a challenge that is exciting for us,” Paul said. “Just like anything that I’ve done online, and in my career, when I’m standing at the bottom of the mountain, I’m excited to climb it. I think with PRIME, we’ve begun our ascent up that mountain, and we look forward to taking on the big dogs in the category.”