This is how you lose the Prime war (Ephemera 02)
Prime Hydration landed on New Zealand shelves at a premium, but now supermarkets are selling it for a dollar a bottle. What on earth happened?
Okay, I’ll level with you.
I’ve been fascinated with Prime drinks since before they even arrived in New Zealand. I think I’m always a little curious when a celebrity launches something like a drink - usually its Ryan Reynolds’ gin or The Rock’s tequila. But something about the sheer fervour around Prime, the massive queues in the US and UK, the stories about bottles showing up on resale sites for hundreds of dollars, it all made me more curious than ever.
And then I found out who was behind the venture. Yeesh.
Recently, I’ve been fascinated by Prime drinks for a different reason: I’ve been watching as the price for a bottle steadily dropped to near nothing. The highest price I saw a Prime drink for was just under $15 when they were being parallel imported by local dairies. The lowest? A mere 90 cents at Woolies.
What happened? Let’s find out.
Part 1: The Pitch
The beginning of this story goes back to the beginnings of YouTube: Logan Paul (brother of former YouTuber and wannabe boxer Jake Paul) and KSI (real name Olajide Olatunji) were both on the platform kind of early - KSI from 2009 putting out videos where he played FIFA, and Paul from 2013 following success on Vine (kind of a Reels app before there was Reels). Like a lot of the earliest vloggers, both saw huge numbers of subscribers and were among the first to become professional YouTube personalities.
Between their platform debuts and the launch of Prime in 2022, both started to branch away from solely performing on YouTube.
Paul started appearing on television and dabbled with boxing - even fighting KSI in a couple of fights around 2016 - before becoming embroiled in controversy following the release of a vlog featuring a recently deceased body that was filmed in Aokigahara, the “suicide forest” at the base of Mount Fuji, Japan. Paul has been caught up in a number of scandals over the years, most recently for attempting to sell fraudulent NFTs via a video game. In addition to fronting for Prime, Logan Paul hosts a podcast named Impaulsive, and is a WWE wrestler. Paul currently has 23.5 million subscribers on YouTube.
KSI, meanwhile, came up playing video games and releasing comedy rap songs on his YouTube channels, before publishing a book, making a documentary, recording music for real (spoiler: its not good), and finding himself accused of sexual harrassment. Since 2017, KSI has been dabbling in boxing, even starting a boxing promotion company, Misfits Boxing, as well as appearing in wrestling events with Paul. KSI has 24.1 million subscribers on YouTube.
Together, the pair somehow found time to create Prime Hydration LLC, in affiliation with Congo Brands - the aim being to release a line of energy drinks (Prime Energy) to compete with the likes of Red Bull, and a line of hydration drinks (Prime Hydration) to compete with Gatorade/Powerade. The Hydration line contains no caffeine and no sugar, instead sweetened with acesulfame potassium and sucralose; the energy line contains 200mg of caffeine per can.
Both lines launched together in early-mid 2022 internationally, starting in KSI and Paul’s home territories of the UK and the USA. To say there was hype would be an understatement.
Part 2: The Rise
Despite only releasing in limited supply in 2022, the brand managed to make a quarter of a billion dollars by the end of the year - and that limited supply became its own story as shortages forced prices up, and bottles found their way to sites like Ebay, where they sold for thousands of dollars.
Thanks to celebrity endorsements from the likes of Kansas City Chiefs quarterback Patrick Mahomes, Prime went big in 2023, making itself readily available in supermarkets and retailers, and relying on social media buzz and selected partnerships (like with football star Erling Haaland) to drive sales.
However, a report from GlobalData warned the company not to rest on its laurels:
However, this leaves some challenges; how does Prime stand out in two global multi-billion dollar industries, namely the energy drink industry and sports drink industry? Both Industries are expected to see a combined growth of 8.3% in 2023, according to recently published data from GlobalData. 2024 will be a crucial time for Prime as it will start a pursuit of market leaders, Gatorade and Powerade. Prime must adopt effective marketing strategies to increase its small market share in these big markets.
By the end of 2023, it was the highest selling beverage at Walmart in the US, and surpassed $1 billion in sales - an event commemorated with a competition to win a 24-carat gold Prime bottle (eventually there were two), and the opening of pop-up stores in London and New York.
I’m not sure when I first noticed Prime Hydration drinks in stores here in New Zealand - but I know that my reaction was exasperation at the price of the drink. Two local dairies were selling them, one for $12.90 and another for $11.50, and they were in stock at our local Woolworths for $7.50 per bottle.
As for the brand’s plans for 2024, it seemed like they wouldn’t be changing a thing. Logan Paul said as much, revealing in an interview with Bloomberg News that “we have this thing called the cell phone that lets us reach every corner of the globe.” Hmm, let’s see how that turns out.
Part 3: The Fall
In hindsight, it seems obvious what was about to happen. As Sasha Rogelberg wrote in her recent breakdown of Prime’s rise and fall:
The popularity of the drink and the initial status associated with it, however, is what paradoxically led to it slipping, [food blogger Andrea] Hernández said. Brands created by popular influencers and internet creators benefit from their founders' large followings, scaling rapidly, but without putting thought into how to sustain the company.
So, yeah, a marketing plan probably would have helped.
Instead, the drinks brand fell victim to two things: the unquantified value of sponsorships, and regulatory failures.
In lieu of traditional marketing, Prime Hydration LLC made a number of partnerships - entering sponsorship agreements with football teams Arsenal, Barcelona and Bayern Munich, as well as with UFC (including a partnership with Kiwi star Israel Adesanya), and then WWE Wrestling.
The thing is this: there is no sure sign that these kind of sponsorship deals can move the needle - certainly not enough of a sign to rely entirely on sponsorships and social media. Here in New Zealand, less than 15% of people polled said they take notice of products endorsed by a celebrity - with people over 40 years old, its less than 8%. The numbers are also damning for purchasing products pushed by a social media influencer: less than 9% of people say they would, dropping to less than 5% of 40+ year olds. Records also show that Prime Hydration nor Congo Brands spent a cent on marketing in this country.
Regulation also screwed them: Prime Energy drinks are banned in a number of countries, including New Zealand, due to excessive amounts of caffeine. Some European countries, including Norway and Denmark, have also banned the Prime Hydration drinks due to excessive Vitamin A.
Then there are the lawsuits. Because there are always lawsuits.
Prime Hydration LLC is actually facing two lawsuits - one a class-action suit that claims they’ve misled consumers on the caffeine levels in Prime Energy, and that the true level of caffeine is closer to 230mg, not the advertised 200mg. Democratic senator Chuck Schumer called on the FDA to investigate.
They are also facing a second suit - this one from 2023 - that alleges their grape flavour contains PFAs (polyfluorinated substances), also known as “forever chemicals”, that accumulate and do harm to the human body and to the environment. Naturally, Logan Paul denied both claims.
By March this year, over-supply had forced the price of the drink down. Like, way down. In Norway, retailers started giving the drink away. Meanwhile, I noticed Woolworths had the drinks at $5 at Easter; I found them in my local supermarket for $1 per bottle just yesterday.
I reached out to Woolworths to ask what is going on but they declined to comment as their pricing strategy is commercially sensitive.
Part 4: The End
As of right now, who knows what might happen to Prime. It’s not hard to imagine that some combination of the lawsuits, over-supply, regulation and a lack of marketing led to where the company is at now.
It’s also aiming at the wrong people, as Rogelberg writes:
Recent scrutiny of the brand has not been kind to Prime, but there’s another wildcard variable that could be the nail in the brand’s coffin, experts say. It’s Gen Alpha, young people born in 2010 to 2014, who, now approaching 14, have an astonishing amount of spending power. The fate of Prime—and so many other content-creator-born brands—are in the hands of today’s tweens, Andrea Hernández, author behind the popular food-and-beverage Substack newsletter Snaxshot, told Fortune. The generation cycles through fads rapidly, chewing up brands and spitting them out.
“A brand cannot live on hype alone,” she said. “And the hype alone is not going to build the brand.”
I have to imagine the product itself is also somewhat at fault.
Now that the drinks are at the $1 price point, I tried a few flavours to see if they matched the hype. Tropical Punch was awful, and Orange was barely tolerable. Lemon Lime was my favourite of the three I tried, though it is so sickly sweet (despite apparently containing no sugar) that its almost undrinkable. I’m in good company: Gordon Ramsey tried them and said they were like “swallowing perfume”, giving them a score of zero out of ten.
But there is a part of me that thinks KSI and Logan Paul might be the problem. They’ve come up through a system that most people simply don’t trust, created a self-described high end sports drink/energy drink brand, and then had the arrogance to trust that their involvement alone would be enough to sustain it.
Will Prime last 2024? I wouldn’t even bet a dollar on it.
Rejected Book Title Puns For This Piece
A Wrinkle In Prime
A Brief History Of Prime
Once Upon A Prime
All The Prime In The World
The Devil All The Prime
By the way, if you like weird sci-fi written with poetic beauty, I can highly recommend Amal El-Mohtar and Max Gladstone’s This Is How You Lose The Time War, which is a wonderfully mind-bendy book.
Five Songs Worth Checking Out!
> Hozier - “Too Sweet”
The new track from the Irish singer hit #1 on the Billboard Hot 100 last week.
> St Vincent - “Hell Is Near”
The opening track from St V’s latest record All Born Screaming.
> English Teacher - “The World’s Biggest Paving Slab”
One of the highlight tracks from English Teacher’s very good album This Could Be Texas is also one of the most fun tracks on the album.
> Sepultura - “Ratamahatta”
I have fond memories of seeing this video playing overnight on Juice TV.
> P.O.D. - “Afraid To Die”
Not only are P.O.D. still around, they have a new album coming out Friday.
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See you Friday,
Chris
Another enjoyable read, Chris. Fascinating story. I've never heard of the drink, nor the 2 who founded it. No surprise really - I'm not a consumer of these types of things, and I abhor the cult of celebrity where vacuity trumps acuity every time.