The Fastest-Growing Brand You Never Heard Of

Media Release                                                                                                                                                                                 23 September 2008

The Fastest-Growing Brand You Never Heard Of

One of the fastest-growing energy drink brands in the world is putting its spectacular sales success down to staying away from shops.

Since launching just six years ago, XS Energy drinks have gone from nothing to sales of close to US$150 million a year – with more than A$10 million in Australia and New Zealand alone – thanks to its novel approach to distribution.

XS Energy drinks were formulated in 2001 as a product focused on low-glycaemic (low sugar) nutrition specifically for athletes. At the time, it was the first range of energy drinks in several flavours that were also sugar-free.

But the real revolution was in its marketing and distribution strategy – the founders decided to side-step normal retail outlets and sell through network marketing company Amway.

“The real success story behind XS is about the distribution model that we embraced,” says co-founder Scott Coon. “Amway and their Independent Business Owners (IBOs) have been a radical force that has really disrupted traditional energy drink distribution.”

That force was so radical that the drinks sold their projected six-month volume in just the first weekend, did US$51 million of sales in the first year, more than US$70 million in the second year and are now at close to US$150 million.

XS Energy Drinks Australia/New Zealand sales grew by A$3 million last year, putting the XS Energy brand among the top energy drink brands in Australasia.

“The growth, sales and success that Amway and IBOs deliver is pretty amazing,” says co-founder David Vanderveen.

Or, as XS Australia/New Zealand brand manager Patrick Rogers puts it, “The growth is great. But I think it’s kind of ironic that we’re as large as we are and still pretty unknown, we’re probably the largest and fastest-growing brand that you’ve never heard of before.”

The Amway IBOs sample the drinks and sell them direct to consumers, removing the need for XS to advertise or promote their brand the way that other energy drinks do.

 “We didn’t have tens of millions of advertising and promotion dollars for a typical beverage launch, so we had to get creative,” says Vanderveen. “We knew that when people sampled the drink and were told the story we would outsell everyone. With Amway we sell our drinks to distributors, who make a very different purchasing decision to the kid in a convenience store once in a while. It makes a huge difference to the success of our brand.”

The XS Energy range is about to move the energy drink model to a new level with the launch of a Tropical caffeine-free flavour and a non-carbonated Green/Black tea flavour which is a completely new sphere for the market.

These brand extensions will add to the current flavour portfolio of Tropical Blast, Citrus Blast, Grape-Berry Blast, Cola Blast and Electric Lemon Blast that are distributed exclusively via Amway in the USA, Canada, Australia, New Zealand and the UK. As well as being sugar-free, it is boosted with B vitamins to aid recovery after exercise.

To thank and inspire local IBOs to continue spreading the word, XS Energy drink co-founders Scott Coon and David Vanderveen will be in New Zealand this week as a part of their worldwide Amway promotional tour. They will be available for media interviews: Christchurch Thursday September 25, Wellington Friday September 26, Auckland Saturday September 26 and Monday September 29.

ENDS

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