|Powerade's new Flava23 features LeBron James on the bottle.
The new "sourberry" flavor of Powerade called Flava23 is tinted a red hue similar to the color of the Cleveland Cavaliers team Mr. James plays for ("23" is his team number). Professional athletes have long had shoe contracts for customized styles that bear their names. But a custom drink for a superstar athlete is a relatively new form of endorsement deal.
"We were looking for a unique way to promote [Mr. James] as beyond extraordinary without the benefit of having access to the NBA trademarks and to build a franchise around LeBron James in a never-done-before manner," said Vince Thompson, president-CEO of Creative Presence Partners, a sports-marketing agency hired by Powerade to promote the new product.
A spokesman for competitor Gatorade said, "The idea of putting one athlete on a bottle was something we never found to be quite appealing enough to drive sales around the country." He noted that athletes are polarizing and argued that Powerade's effort was about tapping Mr. James' popularity to gain shelf space at retail.
"His star power is pretty well stated, but [Coca-Cola] can't use him in uniform because of our NBA sponsorship, so they're not left with a ton of choices and this is designed to create excitement at the store level," the spokesman said. "They're trying to create attention for themselves in stores."
Other celebrity beverages
Celebrity-licensed beverages have been more the territory of rappers, who already have taken over the athletic shoe, automotive and fashion worlds with cross-promotional deals that benefit the singers as much as it does the product. At least a half-dozen beverages made for hip-hop artists are in distribution and incorporated into song lyrics, with Nelly's Pimp Juice and Li'l Jon's Crunk being two of the more successful recent entries.
From the sports world, only golf legend Arnold Palmer has had his own signature beverage, called Arnold Palmer Tee, a lemonade and iced tea hybrid in limited distribution since 2002 through Innovative Flavors LLC.
$2 million royalties
Like the rappers, Mr. James is said to be getting a cut of the profits from selling Flava23, according to ESPN.com. Of his $12 million deal with Coke to promote Sprite and Powerade, ESPN.com estimates that roughly $2 million is counted for the new beverage flavor.
"If this product is successful we'll see a lot more of them," said Gary Hemphill, senior vice president of information services at consultant Beverage Marketing Corp. "Coke has invested a lot in [Mr. James] and this is one way for them to leverage their investment and latch onto his star."
Circumventing NBA deal
Many of the decisions involved in the LeBron James deal were aimed at circumventing the roadblocks set up by the NBA's marketing rights and its relationship with rival Gatorade, owned by PepsiCo Beverages and Foods.
For Powerade, which commands a 14.9% market share, its association with the rising star one-ups rival and share leader Gatorade, which controls 81.2% of the sports drink business. Because Gatorade has a promotional deal with the Cleveland Cavaliers, and because the NBA owns rights to its uniforms, the marketing teams had numerous challenges in how they used Mr. James to promote Powerade. He can't drink Powerade during games and had to conceal his Gatorade on the court.
Mr. James took an active role in the development of the flavor, described as having a tangy, berry taste, its packaging and the marketing behind it. In February, he met with Coke's chemist at the Ritz Carlton in Cleveland to sample flavors and colors.
Comic book tie-in
To promote the drink and Mr. James, the marketing teams developed a deal with Warner Bros.' D.C. Comics for a comic book starring Mr. James with 10 collectible covers.
Other promotional elements include in-store displays and a Flava23 mini Web site on powerade.com.