Unveiling the Decline of a Once-Promising Brand: What Led Prime Hydration to the Bargain Bin?

Prime drink

YouTubers Logan Paul and KSI set up Prime as a competitor to Gatorade (Source: Shutterstock/Raz McNulty Photography)

In late 2022 and early 2023, Prime Hydration experienced an unprecedented level of demand. It was reminiscent of the frenzy seen for Taylor Swift concert tickets or toilet paper in 2020. People lined up at dawn, bottles were being resold on eBay for exorbitant prices, and there were even reports of shoppers fighting over bottles.

The energy drink brand was founded by popular YouTubers and influencers, KSI and Logan Paul, who have a large following among teenagers. In addition to being created by these two globally renowned YouTubers, the brand initially faced shortages upon its launch. The perceived scarcity of the drink led to the creation of a Twitter account (@prime_tracker, now X) dedicated to helping fans locate bottles.

It seems like the bubble has burst. According to figures from The Grocer, NIQ's sales for the first quarter of 2024 were only £12.8m, which is less than half of the £26.8m in sales they had the year before.

In contrast to the scarcity seen last year, photos have been circulating on social media showing Prime drinks being sold for as little as 31p in Tesco. This drop in price indicates that the demand for the drink has significantly decreased.

The energy drink category is well-known, but Prime, led by Logan Paul and KSI, took a unique approach to building its brand, according to Paul Bailey, brand strategy director at agency Halo.

Bailey explains that typically, businesses create a product, identify an audience, and then sell the product. However, new creators like Logan Paul and KSI are doing things differently. They first build an audience and a brand for themselves, and then they figure out which products to sell through this platform.

He believes that the trend of using influencers for brand building will continue to grow in popularity. An example of this is MrBeast’s Burgers, a fast-food delivery concept created by the YouTuber MrBeast. Such brands tend to experience a surge in popularity before fading quickly.

Personalities like Logan Paul and KSI prioritize their personal brand over any specific product or service. Even if a brand like Prime no longer sells, it won't harm their overall image. These influencers have already profited significantly and will likely move on to the next venture without much impact.

Steady wins the race

The rise (and fall) of brands like Prime may appear sudden to some, but Bailey emphasizes the importance of recognizing that these influencers have been diligently building their brands for many years, if not decades. This solid foundation enables them to achieve rapid success.

Prime as a brand has taken a unique approach by establishing itself on TikTok and other digital platforms. However, according to Jon Evans, chief customer officer of System1 and host of the Uncensored CMO podcast, this strategy is actually an exaggerated version of a trend that has been seen many times before.

Evans has a background in FMCG and has worked extensively in soft drink marketing, with experience at companies like Lucozade and Britvic.

At Britvic, he conducted research on the 20 most successful soft drink launches in the past decade. The research revealed that over half of these launches experienced a decrease in sales in the second year after being introduced.

According to Evans, the pattern observed is that there is a high level of interest in new products initially, especially from supermarkets eager to offer the latest items. However, the problem arises when these products are launched prematurely without sufficient awareness or a solid consumer base.

The rate of sales is usually low initially, and after a year, a new product is released, replacing the previous one.

According to Prime, social media has accelerated this trend, leading to a more pronounced drop in sales as shown in the NIQ figures.

He compares the bell-curve model of growth (sharp growth followed by decline) with Red Bull's launch strategy.

According to Evans, Red Bull began in a small market, proving the concept first. They then slowly expanded into new channels and a larger audience. The key was their controlled approach and long-term commitment, rather than a flashy launch followed by moving on to the next thing.

Long-Term Success

Bailey explains that Prime's distribution strategy led to an increase in the drink's price. Since it was not easily available, many people were willing to pay more to have it.

"It was like a fancy treat for kids," he explains. "Luxury brands usually make their products hard to get and expensive, and Prime seemed to do the same."

But, he points out that if the product doesn't justify the high price, getting customers to buy again is tough. So, well-known brands shouldn't be too concerned about Prime in the long run.

Brands experiencing a drop in sales in their second year doesn't mean it's the end, according to Evans. However, it will require a significant investment of both money and time to turn things around. Remember, you can't skip the basics.

Jon Evans from System1 mentions the case of Coke Zero, which experienced a drop in sales in its second year after a big launch. However, with dedication, resources, and staying true to their strategy, the Coca-Cola Company was able to successfully build a strong brand.

Evans comments on Prime and its owner KSI and Logan Paul, saying, “I’m not sure they’ve got the appetite to spend the money to recover the position they’re in.” For marketers seeking lessons from Prime’s decline, Evans advises to “beware the fad.”

Marketers can learn from this by focusing on the basics of availability, brand awareness, pricing, and value proposition. According to Evans, these fundamentals are crucial for long-term success.

Editor's P/S:

The rise and fall of Prime Hydration serve as a cautionary tale for brands relying solely on social media hype and influencer marketing. While such strategies can generate initial buzz, they often fail to sustain demand over the long term. True brand success requires a solid foundation built on consumer connection, value proposition, and consistent execution. Marketers should focus on establishing a recognizable brand identity, ensuring product availability, investing in brand awareness, and delivering a compelling value proposition.

Prime's initial success can be attributed to the immense popularity of its founders, Logan Paul and KSI. Their large following on social media platforms allowed them to generate significant hype for the product, leading to initial shortages and inflated prices. However, as the novelty wore off and the product failed to meet expectations, demand plummeted. This highlights the importance of building a brand on more than just social media buzz. Brands must continually innovate, adapt to consumer preferences, and stay true to their core values to achieve long-term success.