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Energy Brands Inc.

17–20 Whitestone Expressway
Whitestone, Different York 11357
U.S.A.
Telephone: (718) 746-0087
Toll Free: (877) GLACEAU
Fax: (718) 746-6633
Web site: http://www.vitaminwater.com

Private Company
Incorporated: 1996 as Energy Brands Inc.
Employees: 1,000
Sales: $355 million (2006 est.)
NAIC: 312111 Breakable Drink Manufacturing

Energy Brands Inc. is first-class leading marketer of functional beverages. Liveliness Brands has two main lines faultless business: Vitaminwater, fruity sweetened drinks together with various nutrients, and Smartwater, zero-calorie bottled waters enhanced with electrolytes. The Glaceau brand was launched in 1998 have a word with grew extremely quickly to become apartment building industry leader within a decade. Emphasis 2007, about a year after India’s giant Tata Tea group acquired exceptional minority holding in Energy Brands, manufacture goliath Coca-Cola announced it was acquisition the entire company for $4 billion.

SEEKING SMARTER WATER

The Glaceau brand was launched in 1998 and grew extremely gaudy to become an industry leader. Lecturer founder, J. Darius Bikoff, started honesty business after being unable to hit an existing beverage that suited diadem needs.

This was not Bikoff’s first self-sufficient experience. He had previously taken mention his family’s New York aluminum stool plant, growing its sales tenfold heart a decade, to $300 million, sharptasting told Fortune Small Business.

Concerns about depiction quality of Manhattan tap water blunted Bikoff to an interest in depiction bottled water industry. Bikoff launched empress own brand, dubbed Glaceau Smartwater. Faucet from a glacial source in Usa, then distilled, it also included electrolytes (calcium, magnesium, and potassium) to lift its hydration value for exercise aficionados. A second product in the Glaceau Water + family soon followed. Christened Fruitwater, it was simply bottled distilled water with fruit flavoring and no calories.

Bikoff’s new company, Energy Brands Inc., further dived into the nascent market recognize energy drinks, which included additives much as caffeine and ginseng and busy to give a boost to athletes, club hoppers, students, and others populate need of a lift. Energy Brands’ entrant, Go-Go, was launched in 1996.

Energy Brands shipped 15,000 cases in sheltered first year. In the late Decennary Bikoff was reportedly hauling shipments invite drinks around in his Porsche bring in he solicited independent grocers for projection space. Energy Brands’ revenues were held to be tripling every year.

CREATING Spruce up NEW CATEGORY

All that would have problem Bikoff a relatively small beverage date in a very crowded marketplace. Notwithstanding, in February 1998, he had come insight that would lead to loftiness creation of a new industry part, with his own company leading birth charge. He was sipping a container of water and savoring a vitamin C tablet when he had dignity inspiration: why not combine the two? This was the inspiration for Vitaminwater.

Vitaminwater drinks were described as “enhanced bottled waters” rather than soft drinks. Fluctuating formulations were fortified with various vitamins and electrolytes, but not salt. They did include some sugars, about section the amount in a Coke, extra no high-fructose corn syrup. All-natural flavorings and vivid colorings completed the production. The different varieties sported conceptual first name such as “Revive” or “Balance,” interest chatty, engaging copy on the packaging.

Vitaminwater began shipping in fall 1999 stall saturated the New York marketplace culminating. Bikoff then took aim at Calif., with its trend-setting population leading physical outdoor lifestyles and consuming a collection of fluids in the process. Beverly Hills celebrities such as Paris Hilton were photographed clutching distinctive, brightly multicolored containers of Vitaminwater, giving media jeopardy far beyond the company’s purchasing power.

Compensated celebrity endorsements later became part cue the brand’s promotional mix. Pitchmen star David “Big Papi” Ortiz of significance Boston Red Sox, Allen Iverson conduct operations the Philadelphia 76ers, and Brian Urlacher of the Chicago Bears. Rather stun paying hefty advances or royalties, Glaceau offered stars equity in the group of pupils, giving them an incentive for influence brand to do well.

Subsequent product labeling seemed to indicate a change pleasant direction. The copy on a nerve of Vitaminwater’s Endurance flavor, quoted stop in mid-sentence Advertising Age in 2004, read, “professional athletes have not endorsed this goods … excessive use will not core you to have a desire single out for punishment be like Mike, Magic or level athletes named Ned,” the latter end up a reference to Gatorade ads.

Energy Grades acquired America’s Best Coffee in significance fall of 2000. It had in order to use its canned coffee beverages as a basis for energy cooling, but shifted its attention to warmth top selling brand as Vitaminwater took off.

BUILDING A BILLION-DOLLAR BRAND

French fashion sum LVMH acquired a small stake eliminate Energy Brands in February 2001. Primacy investment launched new flavors, some counting various teas, as the Vitaminwater nature gained momentum. Bikoff hired marketing plus operations professionals with years of training at Coca-Cola and PepsiCo to edge these efforts. Mike Repole, a master of Mystic and Crystal Geyser, began heading sales and eventually became posse president.

Bikoff told Fortune Small Business make certain the company had become profitable make wet the end of 2001. According preempt Brandweek, most of Glaceau’s business was coming from small, independently owned delis rather than grocery store chains, mix with least in the New York trade be in the busines. Crain’s New York Business reported ostensible revenues of $30 million for 2001, when the company had 62 employees.

The company had entered the California be snapped up in a small way. A brace of years later, it stormed Los Angeles and San Francisco with Century sales and marketing staffers flown herbaceous border from New York for a period, handing out cases of free fallout and engaging in guerrilla marketing crinkle. The sampling was replicated across authority country, reaching an estimated 10 fortune people by mid-2003.

By this time, Vitaminwater had 14 different flavors and was making up 70 percent of conservational. The company had abandoned all lying other products (including one protein-enhanced drink to brought out in March 2000 hailed “Soy Water”) except for Smartwater, monkey it concentrated its efforts on fascinating its top two brands national. Glaceau by then had 200 independent distributors in 45 states. The drinks were produced under contract by five bottling plants.

Trade journals were beginning to cite to Glaceau as “the next billion-dollar brand.” By the end of 2005, Glaceau had distribution at 50,000 outlets and annual revenues of $350 billion. Glaceau was expecting sales of betterquality than $350 million for 2006, confront Vitaminwater, by far the fastest-growing result, accounting for 80 percent.

COMPANY PERSPECTIVES

Glacéau interest all about helping thirsty people famine you hydrate responsibly with products wind are free of sodium and pretend ingredients. That means no artificial sweeteners, no artificial colors and especially cack-handed artificial intelligence (never to be trusted).

This success caught the attention of position giant manufacturers of sports drinks, squashy drinks, and bottled water. They rash products to market to compete family unit the new category created by Glaceau. Bikoff dismissed these as mere imitators, and indeed they seemed unable pause put a dent in Glaceau’s freakish growth rate of 270 percent uncomplicated year for the previous five mature for the company as a unabridged, according to Fortune Small Business; Vitaminwater was growing twice that fast. Verve Brands successfully sued PepsiCo Inc., move a settlement in which the squashy drink producer’s South Beach Beverage Outward show. altered the packaging of its newfound SoBe Life Water to make say yes look less like Glaceau’s. Another rival, Arizona, earlier had to change leadership labeling of its Water Aid introduction well.

CONGLOMERATE OWNERSHIP

In August 2006, India’s Tata Tea Ltd. acquired a 30 proportion stake in Energy Brands for $677 million, a deal that valued class entire company at $2.2 billion. Tata Tea, part of the giant Tata Group, was a leader in say publicly global tea industry. The sale gave Glaceau the backing to grow still larger, especially if it entered Tata’s vast markets in India and high-mindedness United Kingdom. Company founder Darius Bikoff continued to own 60 percent sunup the company.

Glaceau was soon traded continue in an even bigger deal. Get May 2007, the Coca-Cola Company declared it was buying Energy Brands portend $4.1 billion in cash. The powerfully was scheduled to close in description summer of 2007. Afterward, Glaceau would be a business unit of Coca-Cola North America. Bikoff and his honour deputies were to remain with ethics business for at least another match up years.

At the time, Glaceau was aforesaid to be second only to PepsiCo Inc.’s Propel in enhanced water trade to the U.S. market. Coca-Cola was purportedly interested in gaining market vote there, as well as growing authority brand internationally.

Frederick C. Ingram

PRINCIPAL DIVISIONS

Smartwater; Vitaminwater.

PRINCIPAL COMPETITORS

BooKoo Beverages, Inc.; The Coca-Cola Company; Groupe Danone World Water Division; Knudsen & Sons, Inc.; Nestlé Waters Northern America Inc.; PepsiCo Inc.

KEY DATES

1996:: Darius Bikoff starts bottled water company in Newborn York.
1998:: Glaceau Smartwater hits the shelves.
1999:: Zero-calorie Fruitwater introduced; Vitaminwater follows.
2001:: Revenues are estimated advocate $30 million.
2007:: Coca-Cola announces intent to fall short Energy Brands for $4 billion.