February 27, 2024

“Mom, who is LeBron James?” asked my 4 year old daughter.

“He’s one of the best basketball players in the world,” I replied, explaining some of his accomplishments. “Why?”

“I really like his drink,” she said after stealing a sip of Mtn Dew Rise from a sample package Pepsi sent me prior to my interview with James. Pandemic parenting at its best. With just one taste of the energy drink, she was thrilled – and immediately became a LeBron James fan.

PepsiCo is counting on this type of response after luring James away from arch-rival Coca-Cola, whom he has supported for 17 years. The four-time NBA champion is considered one of the most marketable athletes in the world.

Pepsi launched its first James ad campaign on Thursday. It will include a commercial that will air during the NBA playoffs.

In the new ad filmed earlier this year, James imagines what his life would be like if he idled instead of rising above him every day.

“Who would I be if I dozed? Skipped an exercise? If I was distracted … If I’d lost sight of my goals,” he asks in the ad. “No, I’ve decided to get up.”

James told CNBC he is excited about this new partnership and hopes he can put Mtn Dew Rise on the menu despite an already overcrowded energy drink room.

“I think the concept behind the energy drink is what I’m getting into,” said James. “Rise above self-doubt and rise above opportunity.”

Given that 36-year-old James dominates the basketball court and leads various philanthropic and social justice initiatives alongside leading the LeBron James business empire, which consists of a portfolio from restaurants to media companies, he may be the last one who needs it an energy drink.

A crowded but growing category

For everyone else, Pepsi executives hope Mtn Dew Rise is differentiated enough to stand out. It contains roughly the same amount of caffeine as two cups of coffee and is full of vitamins.

The brand is launched to “start the morning with a mental boost, immune support and zero grams of added sugar”. It’s available in six fruity flavors including Berry Blitz, Peach Mango Dawn, and James’ favorite pomegranate Blue Burst.

The Los Angeles Lakers star will be his face alongside other influencers named over time.

“We know it’s a crowded category,” said James. “But we believe there is more space.”

Energy Drinks had retail sales of $ 14.15 billion last year, according to Euromonitor.

“It’s a category that is growing significantly,” said Duane Stanford, editor and publisher of Beverage Digest.

The category is seen as the next frontier for Cola and Pepsi as soda consumption has subsided as people become more health conscious. The volume leader in the category is Monster Energy, marketed by Coke.

Pepsi isn’t new to the category. Rockstar Energy was acquired for $ 3.85 billion in March 2020, and initial results have been positive. Ramon Laguarta, CEO of Pepsi, said Rockstar sales are growing again after years of weak or declining demand. Laguarta said it was too early to say if new consumers would join the category but the brand’s revival was encouraging.

“Energy is a high priority for PepsiCo right now and they basically pulled out all the stops by signing LeBron,” Stanford said. “It gives you an indication of how serious you are about energy, but also how much you believe LeBron can really help you.”

In March, Pepsi renewed its sponsorship with the NBA as the league’s official soft drink. Mtn Dew remains the title sponsor of the 3-point competition during the All-Star Weekend. Pepsi took over the relationship with the NBA in 2015 after Coke worked with her for nearly three decades. Pepsi also has ties with NBA stars Zion Williamson and Joel Embiid.

“An Incredible Ride”

James was an 18 year old phenomenon when he signed his contract with Coke and started working with the Sprite brand. While at the company, he helped commercialize Sprite and Powerade by appearing in many commercials, and even introduced a limited edition. Last September, he mutually agreed to part with Coca-Cola.

The decision came when Coke was re-evaluating its finances in response to the pandemic. The company’s sales were hurt as fewer consumers went to restaurants, sporting events, and movie theaters. At the time, Coke said it wanted to invest in places that would ensure long-term growth. In addition to shedding more than 2,000 jobs, Coke has trimmed its global beverage portfolio from 430 to 200 brands and retired brands like Tab Soda and its smoothie business.

“I had an amazing ride with Coke and I still have some great friendships there and it’s going to last forever,” said James. “But when that opportunity arose, it was the perfect time for us to move on.”

Stanford said it was likely that Coca-Cola couldn’t justify the cost of working with James. It is unknown how much the deal was worth, but from a perspective, Nike’s deal with James is worth over a billion dollars.

“He’s got a lot of buckets up now in the media, sports and entertainment sectors and that is becoming a much stronger asset when it comes to reaching young consumers,” said Stanford.

Pepsi wouldn’t comment on the value of its business. It is said that James was the first athlete to bring an entirely new brand to market, and the partnership was using a new model to support James who was not just an athlete. Pepsi will work with him on issues related to education, social justice, and initiatives in underserved communities.

“Pretty much all of the partnerships and things I do at this point have something to do with my foundation and making sure we continue to highlight my community and other communities that need a voice, need an opportunity,” said James .

His foundation’s philanthropic endeavors include the I Promise School in his former hometown of Akron, Ohio. He has also participated in More Than A Vote, a group supported by athletes to fight voter suppression.

“I think we can all do more,” said James when it comes to social justice issues and bridging the wealth gap. “We can all do better,” he said.

When asked if he could have a future with Pepsi’s sports drink Gatorade, a seemingly natural fit, LeBron didn’t rule it out.

“We’ll see, we’ll see,” he laughed. “Of course we want to start with small steps – crawl before you go. We’re in a good place right now and will see which options are best for us,” he said.

Gatorade mocked and apologized to James for a 2014 tweet saying “The person who had cramps wasn’t our client. Our athletes can take the heat” after James about Game 1 of the NBA Finals Had left leg cramps.

Pandemic deal

James signed this endorsement contract in the middle of the pandemic and an NBA season that had strict protocols to prevent the spread of Covid-19.

“I haven’t had a chance to meet anyone face to face and that’s because of the season we’re stuck in our hotel rooms,” he said. “I look forward to the opportunity to meet the CEO and all the great people at Pepsi.”

He was involved on the creative side through Zoom calls and emails.

“Because my name is linked to it, when you do something that means something to you and it hits your home, you absolutely want to be there,” he said.

With seemingly endless energy, the Lakers star said it was his family and the kids at Promise School who make him get out of bed every morning and urge him to get better.

“You need that motivation. You need this person who gets up every day, who wants to get better and bigger, who wants to challenge things that other people don’t want to,” he said.

But James said even he had lazy days.

“There are weeks, there are days, there are months when I also lack a little energy because how hard I work, hard I go, and how hard I try to be the best at what I do. So every little kickstart from a drink, a person, or from music – I try to take full advantage of it. “

For Pepsi, getting King James on board is a huge asset, according to marketing managers.

“He’s an icon,” said Bob Dorfman, Baker Street Advertising’s creative director. “He’s definitely going to help get the product moving, and on the PR side, it looks kind of cool that they stole it from Coke.”

And if you’re wondering about my daughter – possibly the youngest fan of Mtn Dew Rise – then the drink works. She was up until midnight and bounced off the walls.