After soft market tests at the end of 2011, the brand launched properly last July. It already has over 500,000 Facebook likes, and Clarke told Ben Bouckley that it plans an $80m media spend in 2013.
This week consumers voted the brand ‘No 1. in Energy’ in the Product of the Year USA 2013 awards.
“We should be, in the trade’s eyes, the real number two in the category. It’s a long journey to build a powerhouse brand, but we’ve got the resources and the focus to do it,” Clarke said.
“That said, you’ve got a monster in 5-Hour Energy, who have done a magnificent job of establishing the category. They’re a really tough competitor.”
Explosive growth and strong margins
Explaining how 50 Cent got involved with SK Energy, Clarke said: “I knew Curtis’ manager really well, and we wanted to do something around Give Back [the UN World Food Programme, which SK Energy donates proceeds to]."
Clarke explained that, after examining several different categories across the beverage industry, he and 50 Cent settled on energy shots for three reasons.
“Firstly, explosive growth. Secondly, good margins. And thirdly, it’s not normal for a market leader [5-Hour Energy] to hold a 94% share. We felt that there was no strong No.2 in that market,” he said.
Investor 50 Cent was a great partner, Clarke said, who has really pushed on product formula and quality. “Because he doesn’t drink, smoke or take drugs, and he says ‘I can’t put rubbish into my body. He was the one who, at an early stage, said ‘I don’t want taurine in there’”.
The musician was truly hands-on as SK Energy’s co-founder, Clarke said, adding that Jackson was “probably more important behind the scenes than in front of the scenes right now, where he is involved with the trade, etc. But he does have a significant fanbase, which is great.”
SK Energy contracts out production to Arizona Packaging – which also works with firms such as Monster and Campbell’s - and markets its shot as a healthier energy source than competitors.
Synthetic vs. natural caffeine
Clarke said SK Energy abandoned its initial lifestyle, college positioning when it noticed uptake among professional athletes. “We don’t have taurine, we don’t have artificial flavors. So we chose to celebrate the quality, good ingredients, the ‘nothing to hide’ aspect."
SK Energy shots only contain natural caffeine from coffee beans, they also include antioxidants, 100% natural flavors and vitamins A, B6, B8, B12, C and E.
Not only was natural caffeine less toxic, Clarke said, it as also absorbed into the body much faster than cheaper synthetic derivatives used by rival shot brands.
“There are three reasons why people get jitters on energy: Taurine, while excessive Vitamin B will also prompt some sort of reaction,” he said.
“The other one is synthetic caffeine,” Clarke added. “Natural caffeine absorbs into the body more quickly. You get your energy hit, but its last longer in comparison to synthetic caffeine some brands use. The body has to work overtime to break that down, and then it’s the toxins in there.”
‘Taurine should be banned’
Criticizing the media frenzy besetting the energy category, Clarke said that if 5-Hour and Monster really were dangerous products “then you know the Food and Drug Administration (FDA) would pull them off the shelves”.
That said, Clarke said consumers should know what is in products, which wasn’t a problem for his brand, since there is less caffeine in an SK Energy shot than a Starbucks’ Venti Sugar-Free Latte.
“My wife drinks two of those. That’s 760mg of caffeine in a 20-minute stint. The FDA says don’t do over 400mg,” he said.
Although consumers needed to take responsibility and not over-consume drinks, Clarke said the FDA should demand transparent labelling within the energy category.
“You shouldn’t be frightened to say ‘hey, I’ve got 210mg of caffeine’. Big f*****g deal. The FDA says 400mg a day. When they came out with that, we said: ‘You know what – let’s just label then that you should only drink one a day’. That’s our recommended limit,” Clarke said.
“But the day you start regulating how much caffeine goes into an energy drink or a shot, you’d better say ‘well, you can only buy one cup of coffee in Starbucks’. And that’s ridiculous,” he added.