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Game Changer Energy Drink

Company Overview

Game Changer Energy Drink is a nonalcoholic beverage company that offers a wide range of energy mild flavor energy drinks to customers looking for extra energy boost. The company’s fitness related energy drink, named Game Changer, is targeted at customers seeking extra energy boost from light healthy energy drinks with no additives instead of strongly favored drinks. The name represents the company’s desire to change the growing trend of marketing non-energy health drinks as beneficial in enhancing customers’ concentration, health, and even physical appearance.

Mission Statement

The company’s mission is to offer customers with extra energy they required to finish their day to day tasks, stay focused at work, and finish the day with a light and healthy taste that is not only easy to drink, but comforting and refreshing. Game Changer Energy Drink speaks to health-conscious consumers who require some extra help to perform the daily life activities. Customers can easily get bored of strong-tasting drinks made of artificial additives that add calories to the body. Game Changer drinks help customers boost their metabolism as well as burn more calories.

Non Alcoholic Beverage Industry Trends

Energy drinks are gaining massive popularity among students, service members, and athletes as well as adult consumers across the world. The worldwide energy drink market is expected to grow at CAGR of at least 7.3 percent between 2018 and 2026 to hit nearly 85 billion dollars. These products indicate tremendous popularity among different demographics such as the Latinos, people aged between 18 and 35 years, and millennial. Demand for energy drink products are expected to be at peak among these consumer groups in the next decades (Market Watch, 2019). Vercammen, Koma and Bleich (2019), in a survey, found that 5.5 percent of young adults between ages 20 and 39 reported using energy drinks in 2016. The number increased by more than 5 percent compared to the figures in 2003. Among adolescents, energy drink consumption increased from 0.2 percent to 1.4 percent over the same duration. For middle aged Americans, the level of consumption rose from 0 percent to 1.2 percent.

Among countries, the United States is the world’s leading consumer of energy drinks. In 2016, the country’s energy drink market was estimated at $14.30 billion (Grandview Research, 2019). A May 2017 research report by Mintel Group indicated that the country’s energy drink and energy short revenue grew by nearly 6 percent in 2016, with additional room for growth. Analysts from the group forecast the United States energy drink sales to increase by 47 percent from 2016 to 2021 and reach projected revenue of $19.2 billion (Caballero, 2018). Need for healthy drinks, busy lifestyle, and increasing consumer awareness regarding health benefits of energy drinks has helped trigger the demand for these products in the United States. Nearly, 60 percent of male and 40 percent of female population in the country are regular consumers of energy drinks and the trend is expected to grow between 2019 and 2025. Consumers in the United States are demanding for a variety of new flavors within the low-calorie beverage segment. Among the leading brands in the United States are PepsiCo, Coca-Cola, Heinz, Goldwin Healthcare, NourishCo, Monster Energy, Red Bull, and GSK (Market Watch, 2019).

Generally, the United States energy drinks industry is very aggressive with companies undertaking a few activities such as mergers, strategic alliances, plus capital extension for competitive advantage. Established organizations are focusing on expanding their market share across the globe and technological innovations. Firms are focusing on ideal business development using different development approaches. They are not only forming strategic alliances with strong producers of specific province but sharing innovative expertise in the industry (Grandview Research, 2019).

Organizations are moving toward natural raw materials such as gurane extracts, coffee seeds, and ginseng as well as pomegranate. Other organizations have switched to organic forms of sugar including fructose and sucrose to produce low calorie products. Firms are merging with others to control bigger market share by increasing their customer base and product portfolio. The strategy also enables them to penetrate new markets for operational increase. For instance, Amway Company acquired XS energy brand to strengthen opportunities for new ventures and attract young customers. Monster Energy acquired Burn, Full Throttle, Mother, Relentless, and Mutant to become the second largest organization in the market (Grandview Research, 2019).

Game Changer’s Strategic Position

According to Armstrong et al. (2015), there are many ways to distinguish a business from its competitors. Some of the strategies include customer perception factors, market segment, market share, operational and technological advantage, distribution channel, and business model. Game Changer strategic position is to offer customers with convenience. Game Changer will be available where other nonalcoholic beverage energy drinks are sold and offer an easy to find unique alternative. Convenience is the most appropriate strategy for the business because customers must access its products with ease. Customers must be able to choose the company’s products from other competing brands and pick it regularly. Game Changer will be placed near other nonalcoholic brands for ease of accessibility and differentiation. The company will offer reduced calorie options that provide health benefits. Grandview Research (2019) indicates that impact of growing consumer demand for natural products has been noticed across a wide range of beverage categories. However, the change is more drastic in energy drinks than other categories.

Distribution Channel

By distribution channel, the nonalcoholic beverage energy drink segment is classified into on-trade and off-trade selling. The former accounted for at least 65 percent of the entire market revenue in 2016. It comprises of bars, coffee shops, hotels plus restaurants. Product distribution in the United States through on trade channel is expected to record higher growth in the future. The off trade sector, on the other hand, is estimated to record slow growth between 2019 and 2025 because of stringent practices regarding collaborations with retail outlets and shifting consumer preferences (Grandview Research, 2019). With this in mind, Game Changer will use restaurants, clubs, and other on trade distribution channels to distribute 75 percent of its products. The other 25 percent will be distributed via retail stores such as supermarkets and convenience stores. By doing so, the company will concentrate on production and bulk distribution for better sales.

Types of Risks

Game Changer Energy Drinks is prone to three types of risks: regulatory risks, marketing risk, and stakeholder risks. With regards to regulatory risk, Outifa and Gwilliam-Beeraree (2015) indicate that the Food and Drug Administration released a series of adverse health reports associated with consumption of goods marketed as energy drinks. In this regard, energy drink companies face a wide range of lawsuits from consumers. In 2015, the Food and Drugs Administration investigated 5 deaths and 1 fatal heart attack linked to Monster product. To overcome regulatory risk, Game Changer will use organic raw materials and adhere to safety plus quality standard in its production activities.

Regarding stakeholder risk, Vercammen, Koma and Bleich (2019) indicate that energy drinks are normally portrayed as beneficial in improving users’ concentration, alertness, physical performance, risk taking, endurance, plus reaction time. Even so, various studies that overconsumption of energy drinks can lead to negative behaviors and behavioral effects. In this regard, the company’s products will have labels warning clients of the effects associated with the product. The third risk is getting enough distributors to carry the company’s products. The company will overcome the problem through relationship building with businesses. Securing contract with on trade distribution channels will be the most appropriate method. Also, the company will secure contracts with retailers such as supermarkets and convenience stores.

SWOT Analysis Matrix

References

Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2015).  Principles of marketing. Melbourne, Australia: Pearson Australia.