Bang Energy marketer has quietly been on executive hiring spree in past few months, enlisting broad cadre of Red Bull North America vets as it refines distribution map and adopts more street-intensive structure of type that’s worked well for its rival Monster over the years.  Among key hires is 14-year RBNA vet Chris Alfieri as vp sales & distribution.  Over past year or so VPX also has brought on 50 field sales mgrs with more on the way, VPX Sports founder/ceo Jack Owoc told distributors assembled in Atlanta last week for Bang Energy “seminar” at Sheraton hotel not far from NACS c-store convention.  It’s also further opening innovation spigot, bringing new flavors like Birthday Cake to multiple brand platforms, getting word out via roster of endorsers that's approaching half a bil social media followers.  And having trouble matching production with demand, co is undertaking dramatic capital expansion, both at its existing South Florida operation and at former Nestle factory in downtown Phoenix, as evp sales Gene Bukovi told us in follow-up discussion today.  At NACS, VPX had been banished to remote part of show floor, a result, some said, of complaints about unspecified misbehavior last year from rival cos situated nearby.  It didn’t seem to hinder traffic to booth much, at show in which Red Bull and Monster mustered little in way of innovation and Rockstar again was a no-show.  So energy buzz at show was dominated by those in what’s been dubbed “performance energy” or “fitness energy” space like Bang, C4 and Celsius.

Of course, Bang has been on extraordinary tear as one of fastest-igniting brands we’ve seen in bevs, notching well above half a billion in retail sales in just 7 years.  It can be hard to recall that, at time Vital Pharmaceuticals launched Bang at NACS show in 2012 (BBI, Oct 11 2012), Owoc had narrowly averted losing his co after overextending himself building out brands like Redline.  However unsettling that episode might have been, he’s lost none of his swagger, which was on full display at seminar, where he railed on what he views as lack of marketing and innovation at rivals Monster and Red Bull and promised listeners that rich base of Bang’s social media influencers commanding 464 mil followers would follow accelerating growth path.  “Our immediate goal is 1 billion followers – then 2 billion, every adult on the planet, and then it’s all over for Coke and all these losers,” he propounded.  Coca-Cola, don’t say you haven’t been warned.

Owoc heralded innovation engine that brought 17 new sku’s in past month – “more than Dietrich introduced since 1987,” he jibed at Red Bull founder Mateschitz.  The “bright, beautiful and brilliant” core line continues its febrile flavor experimentation, adding flavors like Miami Cola, a shoutout to co’s home base, even as packaging and positioning is tweaked to include adjustments to big “B” logo and change in ingredients from BCAAs (branched chain amino acids) to more highly bioavailable EAA (essential amino acids).  (Asked whether logo change was response to challenge from Beats headphone people, Gene said no, that VPX constantly adjusts look.)  On-trend Bang Keto-Coffee, with 20 g protein, added Peanut Butter and Birthday Cake flavors to existing lineup of Cookies & Cream Craze, Mocha Madness and Heavenly Hazelnut.  Core line also has added non-caffeinated Cola and Birthday Cake entries that moms can buy for their kids, “baby Bangers,” as alternative to sodas containing artificial flavors and colors.

VPX also is building out several new platforms.  Initial run of hemp-based Stoked Energy Cannablast (BBI, Jul 19) sold out initial run of 50K cases in coupla days, Bukovi said, with reformulated version due in a few weeks.  Line is out in Birthday Cake Bash, Strawberry Blonde, Mango Bango and Frose Rose flavors.  At seminar, wholesalers seemed intrigued by new shot line that Owoc heralds as “world’s first carbonated shot,” but reported trouble ordering it because of production issues.  Gene acknowledged issue today, saying limited production has gone just to fill orders from launch retailers like Walmart and Chevron.  And co’s Meltdown platform is being reformulated with stronger version of ketone that eases flavor challenge.  As sign of VPX’ willingness to ride a well-received flavor for all it’s worth, Birthday Cake Bash is finding a place in core Bang, decaf Bang, Meltdown and Stoked lines.

Growth Challenges: Loss of Focus on Redline, Production Bottlenecks, Scammers   Growth is bringing separate set of challenges.  For one, Bang’s explosive growth has taken wholesalers’ focus off Redline, which has been declining double-digits, not thru any perceived brand issues but simply for lack of execution, Gene indicated.  About 40% of distributors haven’t reordered it in past 5 months.  At same time, indie Pepsi bottlers who’ve been strong partners in Pac NW are precluded from taking on fast-growing coffee sku’s due to conflict with Starbucks-branded entries from core supplier.  So VPX may have to rethink aspects of distribution strategy, Gene said.  He was quick to note that focus has also been issue at VPX’s own captive distribution arms as everyone scrambles to keep up with Bang’s surging growth.

Production bottlenecks also have been an issue, with sales left on table for lack of can production capacity.  To take greater control of production, VPX is undertaking major capital buildout as it grows to what Owoc referred to as 2 mil sq ft of space.  Some of that will include 400K-sq-ft former Nestle plant in downtown Phoenix, where co will install 2 high-speed Crown fillers that will enable it to bring in-house the can production that’s been industry-wide squeeze aggravated by Monster Bev launch of rival Reign line.  Shot line also will be operational there by Dec.  Shot line is similarly going into expanding S Florida footprint, which is also adding pair of can lines.

By now brand looms so large that it even has spawned ecosystem of scam artists, with Bang website warning consumers not to respond to those posting fake ads recruiting promotional specialists or brand ambassadors, or enlisting car wraps.

Balancing Fitness Events with Gaming, Other Activities; Revving Up Social Media Machine   Co also continues to refine its marketing machine.  Tho birthed in workout space, co has been balancing its participation in body-building realm, particularly as that moves in weird directions like recent emphasis on striated glutes, Owoc indicated.  So brand has dialed up presence at events like E3 gaming show.  More generally, it’s aiming hard at emerging Gen Z, consumers 24 and under, with 8 events just last month, at time avg age of core consumer on rival brand like Red Bull has edged into high 30s.

Then there’s social media element.  By now, Bang influencer roster includes likes of Brazilian singer Claudia Alende (9.7 mil followers), actress Lindsey Pelas (9.1 mil) and dancer Kendall Vertes (7.4 mil), meaning VPX news can reach 464 mil followers within minutes.  That’s created accelerating marketing machine that added 62 mil followers just in the few months between launch of Birthday Cake and Miami Cola flavors.  Owoc has been building his own presence on Instagram as well.  “Who’s the face of Red Bull?” he demanded in Atlanta.  “Of Monster?  Nobody knows.  I’m the face of the company,” posting on Instagram 3-4X a day.  “We’ve become king of content, #1 in all of Instagram – we decided we need to become the next media company,” he declared.  Owoc’s own increasing recognition can be seen in way consumers frequently mention him by name in their posts.  “Tell Jack Owoc stop being a tease and actually release them everywhere . . . I went to every gnc, vitamin shoppe, convenient store in the state trying to get a taste and no one even knows what I’m talking about,” groused one consumer on Instagram who’s been trying to snag Miami Cola.  As a rule, the most popular Instagram influencers command $30K per post – “they make more than ceo’s,” Jack joked – and with the Kardashians lately entering mix, that price can go as high as $500K per post.  But it brings instant, broad activation of any innovation or marketing activity.  YouTube is next major priority.

Red Bullers Galore in VPX Org   Recall that, in move toward greater rigor in sales & distribution activities, VPX had recruited Red Bull vet Sam Wilson, but he moved on a few months ago for reasons that haven’t been publicly disclosed.  (One issue, we hear, was dispute over bonus pool that was withheld from sales team when brand’s explosive growth didn’t quite meet Q2 objective, issue that was resolved with payout after Wilson departed.)  Tho Sam moved on, VPX has quietly been recruiting extensive roster of Red Bull vets led by Chris Alfieri as vp sales & distribution, following 14 years at RB and its Buckeye and Matador distributors.  Also aboard are Mike Sweeney as vp key accts, role he held during 5-year run at RBNA, and 10-year RBNA vet Adam Perry as dir of sales & distribution for South.  The 8-year RBNA vet Peter Romero, who also worked at Nestle, is serving as natl ops operations mgr for new expansions & facilities, and 16-year RBNA vet Mike Muldernink arrived in Jul as vp foodservice after launching foodservice push at RBNA.  Other former Red Bullers include 15-year vet Chris Weatherford as dir of sales, military & value, and Charlie Suiter, in last month as sr regl sales mgr, handling all company-owned distributors, after jobs at Red Bull and its distributor Wisdom.  Many are based in Southeast, representing Red Bull team reunited behind insurgent Bang brand.

Most of the Bai veterans are gone.  Under longtime Ocean Spray innovation exec Kelly Reilly as ceo now, NY-based Red Thread Coffee has rebooted its strategy, taking more conservative approach to expansion while finetuning elements like packaging that underplayed premium identity as vibrant-tasting cold-brew. 

Red Thread, recall, was created back in 1995 by operator of beloved retail store in Sag Harbor, Long Island, named Lynda Sylvester and 2 female colleagues, making it one of earliest cold-brew offerings in US, well before third-wave players like Blue Bottle popularized style a decade later.  Brand is named for Asian credo that each of us is connected at birth by invisible red thread to every person we’re destined to help in our lifetime, with co donating 2 cents per bottle to local charities like hunger-fighting God’s Love We Deliver in NY.  As category developed, Sylvester brought bottled entry into NY 4 years ago, winning spot in chains like Whole Foods, Gristedes and Fairway, along with foodservice accts like American Express.  Eventually Sylvester concluded she needed some bev-specific expertise to scale up.  That decision coincided with Bai’s exit to Dr Pepper Snapple, so she was able to enlist cadre of Bai execs seeking next venture, led by John Neunson as ceo.  He recruited Reilly from Ocean Spray as cmo.  New team cut over line from plastic to 10-oz glass bottle while retaining unsweetened, black positioning, and expanded flavor range and revved up expansion plans.  When brand failed to ignite, founders cut back size of team, Neunson and most other Bai vets departed and Reilly stepped up to ceo job in Jan. 

She immediately rethought key premises, embarking on extensive consumer research in NY and Chicago that revealed that many millennials didn’t recognize that Red Thread is cold-brewed, often mistaking package for condiment or cough syrup.  But the liquid and philanthropic angle consistently received high marks.  Revamped label offers dark color palette with metallic highlights on which is prominently highlighted that it’s coffee-forward cold-brew, with clearer designations for the 4 flavors retained in lineup: Dark Roast (Sumatra Aceh), Medium Roast (Nicaragua Segovia), Chocolate Almond (Peru Cajamarca) and Caramel Hazelnut (also Cajamarca).  Neck labels that once commanded, “Be cool, do good,” now are deployed to further emphasize that it’s “cold brew.”  The lineup retains cold-brew’s vibrancy when not cut with sugar or creamer, in contrast to other black-only brands that have diverged from that premise in pursuit of lapsed Frappuccino drinkers.

While retaining sole DSD partner, Dora’s Naturals, in core NY market, Reilly enlisted broadliner UNFI to work rest of US and organic beef purveyor Juniper Organics as broker, with plan to pick retail spots more carefully.  Brand retained presence in Whole Foods and added Northeast’s Stop & Shop in Apr, as well as Giant Food in Mid-Atlantic.  In Aug, brand entered all 160 stores operated by The Fresh Market up and down East Coast following 2 weeks of internal taste tests among 300 of retailer’s team members.  Marketing focus has been on in-store demos that allow Red Thread team to sample liquid and tell philanthropic story.  On operations side, one Bai holdover, coo Kenneth Dee, has kept things on stable track, she said.  Co employs virtual pr and social media teams in Calif.  For next retail frontiers, she’s eyeing Midwest, and is tempted by overture from Costco for Bay Area stores.  Chains like Wegmans or Sprout’s would be ideal additions, she said.  To keep things simple, co is eschewing concentrate or draft formats, at least for now.  With platform established, Reilly said she’s in hunt for sales leader to oversee targeted expansion.