With beer sales flatlining, Anheuser-Busch is looking beyond hops and toward Ultimate Fighting Championship’s controversial boss Dana White to help them crack the growing energy drink category. Launching nationwide Wednesday is Phorm Energy, the company’s newest energy drink. The non-alcoholic caffeinated beverage marks the first product stemming from Anheuser-Busch’s previously announced partnership with White aimed at expanding into the $24 billion energy drinks category. Like similar products, Phorm Energy has zero sugar or artificial flavors, contains electrolytes and is naturally caffeinated from green tea extract. The drink comes in four varieties: grape, orange, blue, and “Screamin’ Freedom,” which is a mixture of blueberry, cherry and citrus flavors. A 16-ounce can costs $2.99. Beer sales have been declining for the past several years, falling again more than 1% in 2024 according to Brewers Association, as drinkers shift their preferences to spirits or increasingly ditch drinking. That has forced Big Beer to search for alternatives, including expanding into spirit-based cocktails, non-alcoholic varieties and even energy drinks, with the latter forecasted to balloon into a $33 billion category in the next five years, according to research firm Mintel. Energy drinks have been a successful gambit for rival Molson Coors, which recently purchased a majority ownership stake in Zoa, a brand co-founded by actor Dwayne “The Rock” Johnson. Zoa has repeat purchase rates of 50%, and Coors said its “ability to attract new consumers to the energy category” made it an appealing acquisition. However, Anheuser-Busch has been less successful. In 2017, the company bought energy seltzer water brand Hiball, but sold it six years later to Tilray Brands. The cult-favorite drink was recently relaunched by its new owners. Then in 2020, Anheuser-Busch bought a 40% stake in energy drink Ghost, which used the beer conglomerate’s distribution network. However, that came to an end last year when Keurig Dr Pepper bought Ghost in a $1 billion deal and took over its operations. Following that, Anheuser-Busch’s wholesalers and partners “had been looking toward ‘what’s next’ in the energy drinks space,” according to Jenn Litz-Kirk, director of content for Beer Business Daily, a trade publication. “In some ways, this new move is a no-brainer: With the imminent launch of Phorm, it seems like Anheuser-Busch is trying to recreate the Ghost formula,” she told CNN. “The energy segment is hot, and it’s a high-margin proposition for both retailers and distributors.” Courting controversy? The launch of Phorm Energy further entrenches Anheuser-Busch’s relationship with the controversial White. The pair partnered in 2023 when Bud Light became the official sponsor of his mixed martial arts league following the Dylan Mulvaney debacle. A social media post from Mulvaney, a transgender influencer, promoting Bud Light sparked a massive backlash, costing the company as much as $1.4 billion in sales that year. As for White’s involvement, Litz-Kirk said it’s “’red meat’ for a certain cohort of energy drink consumers,” pointing out that UFC is growing in popularity and that White has a massive following of 10 million on Instagram. Anheuser-Busch’s other partner for the energy drink, 1st Phorm, is also linked to controversy. Last year, police departments in St. Louis, where the company is based, cut ties with 1st Phorm after its cofounder Andy Frisella made offensive comments about female police officers on his podcast. Sal Frisella, 1st Phorm’s CEO and Andy’s brother, said the comments were spoken on a personal podcast that wasn’t affiliated with the company. “We do not agree with his statements, and we do not condone the words or the context in which they were presented,” Sal said at the time. Andy no longer leads the company. Litz-Kirk said Anheuser-Busch likely doesn’t think Andy’s comments were a “big deal” since the partnership was announced in January and there hasn’t been any blowback from wholesalers.
Anheuser-Busch taps UFC’s Dana White for a new energy drink
TruthLens AI Suggested Headline:
"Anheuser-Busch Launches Phorm Energy Drink in Partnership with Dana White"
CNN
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TruthLens AI Summary
Anheuser-Busch is making a strategic move to enter the burgeoning energy drink market by launching Phorm Energy, a new non-alcoholic caffeinated beverage, in partnership with UFC President Dana White. Scheduled for nationwide release, Phorm Energy is designed to cater to the growing demand for energy drinks, a category projected to reach $33 billion in the next five years. The drink features zero sugar and artificial flavors, and incorporates electrolytes and natural caffeine sourced from green tea extract. Available in four flavors—grape, orange, blue, and 'Screamin’ Freedom,' which combines blueberry, cherry, and citrus—the 16-ounce cans will retail at $2.99 each. This launch comes at a time when traditional beer sales are declining, with a reported drop of over 1% in 2024, as consumers increasingly gravitate towards spirits and non-alcoholic beverages. Consequently, Anheuser-Busch and other large beer companies are compelled to diversify their product lines to maintain relevance in a shifting market landscape.
The partnership with Dana White, who has a significant social media following and a controversial reputation, is seen as a double-edged sword for Anheuser-Busch. White's involvement is likely to attract a distinct demographic of energy drink consumers, particularly as the UFC continues to gain traction in popularity. The collaboration follows a tumultuous period for Bud Light, which suffered substantial financial losses after a marketing backlash related to a social media promotion. Additionally, the company’s other partner, 1st Phorm, has faced controversy over comments made by its co-founder, which led to police departments severing ties with the brand. Despite these challenges, industry experts suggest that Anheuser-Busch's entry into the energy drink market is a calculated risk aimed at leveraging the high margins associated with energy beverages and appealing to a new consumer base, especially as beer sales stagnate. This move reflects a broader trend among beverage companies adapting to changing consumer preferences and the potential profitability of the energy drink segment.
TruthLens AI Analysis
Anheuser-Busch's decision to partner with UFC's Dana White for the launch of Phorm Energy reflects the company's strategy to diversify its product portfolio amidst declining beer sales. The article highlights the growing demand for energy drinks and the company's attempt to tap into this lucrative market. This move can be interpreted as a reaction to changing consumer preferences, where traditional beer consumption is waning, and alternatives like energy drinks are on the rise.
Market Context and Consumer Trends
The beverage industry has seen a significant shift in consumer preferences, with many opting for spirits or non-alcoholic options over beer. This trend is corroborated by the reported decline in beer sales, which has prompted major beer companies to explore new categories. Anheuser-Busch's entry into the energy drink space is an attempt to capture a share of a market projected to grow to $33 billion in the next five years, demonstrating a strategic pivot in response to market dynamics.
Comparative Analysis with Competitors
The article contrasts Anheuser-Busch's efforts with those of competitors like Molson Coors, which has successfully integrated energy drinks into its portfolio. The success of Molson Coors' acquisition of Zoa, a brand co-founded by Dwayne Johnson, highlights the potential for energy drinks to attract new consumers. Anheuser-Busch's previous ventures into energy drinks, such as the acquisition of Hiball and investment in Ghost, have not yielded the expected results, raising questions about the company's ability to succeed in this new category.
Perception Management
The report may also aim to shape public perception regarding Anheuser-Busch's adaptability and innovation in the face of market challenges. By aligning with a high-profile figure like Dana White, the company seeks to enhance its brand image and appeal to a demographic that appreciates the UFC and energy drink culture. This partnership might be intended to convey a message of dynamism and relevance in a rapidly evolving market landscape.
Potential Impacts
The implications of this launch extend beyond the beverage industry. Anheuser-Busch's efforts to diversify could influence stock prices, especially those of companies involved in the energy drink market. Investors may view this move as a positive step toward recovery and growth for the company, potentially affecting market dynamics. Furthermore, the collaboration with a controversial figure like Dana White could spark discussions about brand ethics and consumer acceptance.
Trustworthiness and Manipulative Elements
The article is largely factual, presenting data about market trends and the specifics of the new product. However, the emphasis on Anheuser-Busch's partnership with a polarizing figure could be seen as an attempt to distract from past failures in the energy drink sector. The language used in the article appears to highlight the positive aspects of the new drink while downplaying previous setbacks, suggesting a slight manipulative element aimed at fostering a favorable view of the company's future.
In conclusion, while the article is mostly reliable, it serves the dual purpose of informing the public about a new product launch and promoting Anheuser-Busch's strategic shift. The overall narrative leans towards creating an optimistic outlook for the company's future in a competitive market.