Bob Tullio’s Product Perspective: A closer look at products, equipment and services that will impact an operator’s business

The Product

XYIENCE Energy – Sugar Free, Calorie Free, Energy Drink

Most popular flavors: Frostberry Blast – Mango Guava – Cherry Lime – Blue Pomegranate

Website – www.xyience.com

The Back Story

The road to popularity has been a long one for XYIENCE Energy, a sugar free, calorie free energy drink. After being invented by a supplement company, XYIENCE was acquired by the owners of the UFC (the Ultimate Fighting people). “The UFC would likely agree that they were much more effective at marketing pay per view events than they were at selling beverages,” said Thomas Oh, senior vice president of marketing for Big Red, Inc., the company that purchased XYIENCE in 2014.

With a distribution and field sales infrastructure already in place, the new owner was able to quickly take XYIENCE to a much higher level in the grocery and convenience store channels. Now, four years later, the people behind XYIENCE see a huge opportunity in the workplace environment, specifically, micro markets, vending and pantry service.

Oh said that the target market for XYIENCE is the older millennial – age 27 to 37 – a prime demographic in today’s office environment. “Our studies show that this group is increasing their consumption of energy drinks the most,” said Oh.

Feedback has been very positive within that prime demographic. “We get a lot of comments from consumers that they don’t feel the spike and the crash that are normally associated with highly caffeinated beverages,” said Oh. “In dealing with that afternoon slump, a product like XYIENCE, with zero calories and zero sugar really plays very well.”

XYIENCE has been a regular at the NAMA Show and according to Oh, the convenience services industry is responding. John Hall, vice president of on premise for Big Red, provided some evidence that XYIENCE is a winner in the workplace. Hall reports that XYIENCE is the number two selling energy drink in some major vending locations, beating out a wide variety of better known brands.

Why it Makes Sense for Operators

1) Margins: Energy drinks have always captured an excellent profit margin for operators and XYIENCE is no exception. Oh said that XYIENCE is competitively priced and will deliver an excellent margin. “Thankfully, energy drinks have maintained their pricing structure over the years – almost always over $2.00 a can,” he added.

2) Demographics: XYIENCE is targeting an older, better educated, more affluent energy drink user. This 27 to 37-year-old user is right in the “wheelhouse” for micro market, vending and pantry service users.

3) Support: Oh said XYIENCE offers full support for operators – point of sale, shelf talkers and rebate programs. Additionally, XYIENCE makes strong use of social media to connect with consumers, using social influencers and Instagram. “Younger and older millennials need to have someone they see as themselves talk authentically about a product instead of just trumpeting a marketing message right at them,” said Oh, who believes their approach results in a more organic and authentic connection with consumers.

Beyond the prime demographic and the solid margins, Oh said that XYIENCE has one other key feature: “It tastes great.”

Bob’s Perspective

I have always been amazed at how much consumers will pay for energy drinks. Oh attributes this to the “functionality” of the beverage. Whatever the reason, the margins are better than traditional soft drinks, so a targeted approach to selling energy drinks makes sense.

The XYIENCE people are betting on the fact that a 35-year-old who loves energy drinks will be more comfortable carrying a XYIENCE into the boardroom than an energy drink that is popular with teenagers. Seems like a good bet.

After all, these older millennials grew up with energy drinks and know that it is an effective beverage when used appropriately. It makes sense that their tastes would evolve to a sugar free, calorie free drink, with all-natural flavors and colors. Oh also points out that many of the older millennials have now become parents and need their energy drink more than ever before.

For information about XYIENCE, including rebates, distribution and marketing support, contact: John Hall - [email protected] (912) 598-9465

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