The Genesis of Prime Hydration

On January 4, 2022, Logan Paul and KSI announced they had founded a new drink company called “Prime Hydration”. Interestingly, both of them fought in 2018 and 2019. Since both are some of the most famous YouTubers of all time, their fight was also promoted heavily as “the biggest internet event in history”. After seeing the success of the fight event, both of them decided to team up and become business partners along with Congo Brands. The company owns the majority of the equity stakes of Prime and handles the main beverage operations. KSI and Logan Paul own 20% of the equity respectively which equates to 40% of equity ownership.

For the lazy — 1 minute summary.

Prime Hydration, founded by YouTubers Logan Paul and KSI, quickly achieved $1.2 billion in annual sales through influencer marketing, strategic celebrity endorsements, and viral marketing tactics. Their primary audience is fitness-oriented youth, and their success is driven by engaging with this demographic on social media platforms like Instagram and TikTok.

For the curious — 3-minute summary.

Prime Hydration, a beverage company founded by YouTube stars Logan Paul and KSI, hit $1.2 billion in annual sales within its first year. Leveraging their massive online followings and strategic endorsements from celebrities like Kevin Durant and Erling Haaland, Prime created immense hype. The brand’s success is largely attributed to its strong social media presence and targeted marketing towards young, fitness-conscious consumers. However, sustaining this hype remains a challenge in the competitive energy drink market.

For the serious — 10-minute summary.

Prime Hydration’s rapid ascent to $1.2 billion in annual sales is a testament to the power of influencer marketing and strategic partnerships. Founded by Logan Paul and KSI, the brand capitalized on their combined 40+ million followers and engaged young audience. Celebrity endorsements from figures like Kevin Durant and collaborations with major brands such as WWE and UFC helped Prime gain visibility beyond its initial fanbase. Their marketing strategies focused on creating viral moments and leveraging FOMO among youth. Despite initial success, maintaining this momentum is crucial, as evidenced by a significant sales drop in the UK in early 2024.

The Power of Influencer Marketing

Logan Paul has an audience size of 24 Million and 6 Billion views overall whereas KSI has a similar audience size following. It is no surprise that both of them have significant influence in the market as both of them have one of the most engaged audiences on social media. Both of them have a huge young fan base. When they first announced their release of “Prime Hydration”, their promotion instantly drew the public’s attention and buzz. When the drinks were first launched on 8th January 2022, it was an instant success and Logan Paul made a tweet on the same day in the evening that all of the drinks were OFFICIALLY SOLD OUT. In one of the footage, we can also see shoppers queued up at Aldi at dawn for a drink. As of 2024, Logan Paul and KSI have expanded their personal brands with multiple new celebrity endorsements. They have added multiple celebrities to endorse their products as different celebrities have different audiences. By having multiple celebrities, Prime can widen their audience size and capitalise on them. Prime has recently signed Kevin Durant (2x Olympic gold medalist basketball superstar), IShow Speed (popular Youtuber), Erling Braut Haaland (Manchester City striker) and many others. These partnerships have helped the brand gain more traction and visibility in the sports and entertainment industries. In Global Data’s Q3 2023 global survey reveals that 41% of consumers view endorsements by celebrities or organisations as “essential” or “nice to have” when deciding upon product purchases. Key Points on Influencer Marketing:

• Cross-Promotion: Utilising both personal channels and official brand channels to maximise exposure.
• Massive Reach: Leveraging the combined social media reach of Logan Paul and KSI, with over 40 million subscribers and billions of views.
• Instant Credibility: The involvement of well-known personalities provided immediate credibility and trust.
• Engagement Rates: Both YouTubers have highly engaged audiences, ensuring high levels of interaction and promotion.

Create the HYPE and go VIRAL

With the ongoing heat and buzz in 2021 and speculation of a new fight between Logan Paul and KSI, both of them decided to capitalise on that opportunity and did something else with it. On 22nd December 2021, Logan Paul uploaded a poster of him next to KSI with the title of “The Final Chapter“. While the followers were speculating about their next rematch fight on IG live. Both of them came together and announced of the partnership in “Prime Hydration”. Furthermore, after both of them launched the drinks, they successfully executed partnerships and collaborations with big brands such as WWE, UFC, Barcelona FC, and many others. This has helped Prime tremendously by positioning themselves with well-established brands, allowing them to reach a wider audience beyond their existing base. Viral Marketing Strategies:

• Strategic Announcements: Using social media to tease the launch, draw attention, and create anticipation.
• Event Marketing: Launch events and appearances that drew significant media attention.
• Social Proof: Showcasing sold-out statuses and customer queues to build FOMO. (refer Logan Paul’s tweet)

Targeting the Youths to Achieve Success

The answer to their success is their target demographic. The company “Prime Hydration” has successfully resonated with fitness-oriented youths, and both of them constantly engage with young audiences on Instagram and TikTok. One of the key elements to their success with the youth market is their ability to position themselves as a lifestyle brand with a focus on health and wellness, which resonates with the young demographic. This is also evident in their marketing campaign targeting specifically children. The company also has a wide presence on platforms like TikTok, Instagram, and even Twitch, where most youths spend their time. Logan Paul and KSI know their target audiences really well, which gives them an upper hand in targeting and engaging with them effectively. Since they know that their main target audience are the youth, they use bright colours in their product packaging, which captures the youth’s attention. Furthermore, the drinks have also been associated with the YouTubers and have become a must-have item among teenagers. In an interview by The Sun, a mum was woken up by her son at sunrise to buy the energy drink created by the YouTubers. “There’s the whole hype of it and everybody is talking about it, kids feel like they are missing out if they haven’t tried it. “It’s going crazy and I genuinely don’t know why.” The brand has successfully created the fear of missing out (FOMO) that boosted its sales tremendously, as evident in the earlier interview, and has created a sense of FOMO among its networks among the youths as its something impressionable among their circles. Key Tactics for Targeting Youth:

• Social Media Presence: Active engagement on platforms popular with youth, such as TikTok and Instagram.
• Bright Packaging: Using vibrant, eye-catching colours that appeal to younger consumers.
• Lifestyle Branding: Positioning the drink as part of a healthy, active lifestyle.

Maintaining the Hype

There is no doubt that Prime has achieved a lot of success in a short period and its ability to create hype among the youth. One of the ways they have done this is by creating multiple exciting events with fan engagement. For instance, in November 2023, they celebrated reaching $1 billion in sales by creating golden booths in New York and London, offering a chance to win a $500,000 gold bottle. They created golden booths in New York and London for 48 hours, featuring the chance to win a $500,000 worth of gold bottle if participants guessed the six-digit code correctly in 20 seconds, and the internet went crazy. Footage of hundreds of teenagers, visitors, and children with their parents queued up hours before the store opened. This event encouraged fans all over the world to participate in the event in hopes of winning the $500,000 gold bottle and also allowed fans to meet up with their favourite YouTube celebrities while sharing their experiences and opinions, creating a sense of community around the brand. This event drew massive crowds and fostered a sense of community around the brand. However, in one of the articles by Fortune, it was found that in the first quarter of 2024, U.K. sales for Prime fell 50% year over year, raking in 12.8 million British pounds compared to 26.8 million in the quarter the year before, according to The Grocer, per data from retail and consumer platform NielsenIQ. X and Reddit posts show photos of Prime drinks on clearance, selling for 31 pence. As Prime Hydration strongly relies on the hype, despite the initial success, One would argue that Prime seems to be unable to maintain the hype that they have created. As the energy drink sector is extremely competitive, it is no surprise that Prime will not be able to compete with other brands like Gatorade, Red Bull, Monster Energy, etc., if they do not position themselves well and establish a strong brand rather than constantly trying to ride on hype, as hype doesn’t last forever. One could argue that the business’s focus should be building a sustainable business and not relying solely on hype.

More Flavours, More Excitement

To sustain growth, Prime continuously comes up with new flavors, including some limited edition ones, to keep the product line fresh and exciting. By introducing new flavours, they were able to expand into new markets to fit local tastes and preferences. In conjunction with the new collaboration with a new ambassador, Prime will come up with a new flavour or packaging in Limited Edition to create scarcity and the FOMO effect in hopes that customers will go crazy again for their new launch associated with their favourite celebrities. On July 23, 2024, Prime got sued by the U.S. Olympic and Paralympic Committee for using Olympic Games trademarked phrases in its product packaging and online advertising campaigns with Kevin Durant. The committee is seeking damages, including all profits Prime Hydration made from the infringing products, as well as millions of dollars in damages to be determined at trial. While Prime has done well earlier with their celebrity endorsements, they were not cautious this time. This lawsuit highlights the importance of protecting intellectual property and trademark rights, particularly in the context of high-profile sponsorships and brand partnerships.

Key Lessons from Prime Hydration

Actionable Tips for Marketers: