How Starbucks is getting into the energy drink business

Starbucks, which has grown into a retail behemoth thanks to coffee, is making its first big marketing push into the hotly competitive energy drink category. The company today begins its first campaign for its energy drink Baya called “Energy That’s Good” from agency Energy BBDO. The effort strikes an upbeat note, using a song by Dominican and Brazilian artist Jarina De Marco called “Happy All the Time.” One ad features a colorfully dressed roller skater drinking Baya as she skates down the street. The decision to create an energy drink comes from the brand’s desire to follow “emerging trends,” which in this case are a “steady increase in energy drink consumption, and desire for functional ingredients” among consumers, according to Jenn Wong, VP of channel development at Starbucks. Starbucks released Baya, which is Spanish for "berry," in January in collaboration with PepsiCo, with which the coffee giant has had a nearly 30-year partnership. Starbucks stated that the campaign is a “priority” in its partnership with PepsiCo. Baya initially got national distribution at grocery stores, convenience stores and gas stations and came to Starbucks outlets in March. Starbucks is positioning Baya as a refreshing drink with flavors targeted to warmer months. Varieties include mango guava, raspberry lime and pineapple passionfruit. The drink still alludes to coffee in its ingredients, getting its caffeine from a stone fruit produced by coffee plants called the coffee fruit. Enter Ad Age's 40 Under 40 at AdAge.com/40u40. The move comes as the energy drink market is rising rapidly. According to Allied Market Research, the category reached a $45.8 billion value in 2020 and is expected to experience a compounded annual growth rate of 8.2% from 2022 to 2031 to reach $108.4 billion. The U.S. market size is $16 billion with top brands including Red Bull, Monster Energy and PepsiCo-distributed Bang, according to Beverage Digest. The industry has seen startups using natural ingredients rise in market share, such as Celsius. Expanding into energy drinks allows Starbucks to reach people don't like coffee, and also lure afternoon purchases from people who only drink coffee in the morning, said Duane Stanford, editor and publisher of Beverage Digest. The campaign will run in stages through the spring and summer of 2022. It includes influencer marketing via a program called “Energy Makers Lab” handled by Edelman that began in March and involves endorsers such as musician and singer Jordan Fisher and video director Cache Bunny promoting products on their platforms. Starbucks competitors have dipped into energy drinks in the past. Both Dunkin’ and McDonald's have sold or partnered with Monster Energy. PepsiCo rival Coca-Cola launched its own energy drink, Coca-Coca Energy, but axed it in North America after just one and a half years due to slow sales. The product launch coincided with the start of the pandemic which was a contributing factor.

How Starbucks is getting into the energy drink business

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