What's Next for Prime After Last Year's Boom and Bust? Lessons for Celebrity-Led Consumer Brands

Prime launched in June 2022 in the UK and achieved incredible success right out of the gate. It captured a remarkable 32% market share in the UK sports drink category (Nielsen), a market valued at ￡350 million in 2023 (Euromonitor), and dominated headlines. The launch leveraged the fame of YouTubers and internet personalities Logan Paul and KSI, its founders, who boast a combined 40 million YouTube followers. As brilliant content creators, they understand what their young audience wants and when they want it.

The product represented an innovation in the sports drink market, which in 2022 was dominated by Suntory's brand Lucozade, holding 73% of the market (Nielsen). Prime stands out by incorporating coconut water, which provides sugar but not as much as traditional sports drinks, making it low in calories and containing zero sugar. Additionally, Prime includes electrolytes, essential minerals that can be lost from the body through sweating. For those engaging in intense exercise, Prime offers a beneficial alternative.

Following the success of its sports drink, Prime launched an energy drink. However, it didn't achieve the same level of success and received strong negative media attention due to its high caffeine content.

After its initial success, Prime has become somewhat of a pariah in the beverage industry. Sales have plummeted since the start of 2024, with year-on-year sales down over 50% according to NIQ data. After being the fastest-growing food and drink brand in 2023, according to The Grocer’s Britain’s Biggest Brands report 2024, Prime has seen volumes slide by 33.5%. With sales of its Hydration product receding, retailers are discounting to clear excess stock. Images shared on social media platform X last month showed 500ml bottles of Blue Raspberry and Strawberry Watermelon reduced to 31p in one Tesco store. The 31p shelf-edge price is an 87.6% decrease from the ￡2.50 RSP commanded by the drink when it launched in Tesco in June 2023 (The Grocer).

But what exactly went wrong, leading to Prime's dramatic rise and fall?

• FOMO is Not a Sustainable Marketing Strategy: The product launch in June 2022 went viral on social media, thanks to its high-profile founders. Initially, it was challenging to get the product due to limited distribution. This FOMO (Fear of Missing Out) drove up demand, with some convenience stores selling it for as much as ￡10, fuelling a frenzy that boosted sales. However, once the product became widely available and distribution reached specific thresholds (>50), sales began to collapse. The narrative of FOMO evaporated, taking sales down with it.

• Lack Of Focus On Penetration And Repeat Rate: Prime seemed to overlook the importance of sustained penetration and repeat sales in the FMCG industry, where a viral moment alone is not enough for long-term success. As initial excitement waned, penetration dropped because consumers viewed the product more like a collectible item, akin to an autograph from Logan Paul and KSI. Once they had "their autograph," they didn't see the need to buy another. This might have also signalled a lack of satisfaction with the product, as it failed to provide significant emotional or functional benefits that would encourage repurchase. In the FMCG world, success relies on selling more to more people consistently.

• Extremely Fast Pace of Product Launches: From June 2022 to December 2023, Prime launched 18 new SKUs in the UK, including its energy drink range. In comparison, Lucozade only launched two SKUs in the same period. This rapid pace of launches resembled a content generation strategy for social media success rather than a thoughtful FMCG approach. Flooding the market with new SKUs risked cannibalising previous product lines, as the new offerings differed only in flavour and colour but targeted the same consumers and need states (feeling part of the community and buying a piece of it). Additionally, the energy drink line created confusion among average consumers, as it looked similar to the hydration line with the Prime logo front and centre and similar flavours offered — the only differences being pack size and format. Prime prioritised refilling the collection of Prime bottles for core consumers over increasing penetration and repeat purchases. This strategy backfired, as evidenced by the fact that 70% of total value sales in 2023 came from the four initial SKUs launched (Kantar).

• Lack of Cohesive Price and Distribution Strategy: Prime was distributed in grocery and convenience stores but seemed to lack a cohesive price and distribution strategy. In 2023, almost half of its sales came from convenience stores, which is unusual for traditional beverage brands, especially since Prime was listed in all major supermarkets. Additionally, the product was priced at a high premium (￡2.50) compared to the market leader, Lucozade, which was priced at ￡1.69, despite not being significantly better. This seemingly random strategy created a buzz around the brand and product but lacked strong fundamentals.

The wave of celebrity booze brands is rising, and it makes sense – football star Lionel Messi has recently launched a similar brand called MAS. These celebrities have a strong fanbase, giving them tremendous marketing power, especially when launching products through their social media channels for free. Marketing can account for 10-20% of a product's net sales, so leveraging their own channels provides a significant advantage. Their ability to craft engaging storytelling through various platforms significantly reduces customer acquisition costs, which is critical now given the high costs and declining ROI of digital advertising on platforms like Facebook, Instagram, and TikTok. However, while viral marketing can provide an initial boost, it cannot sustain an FMCG business in the long term. A robust strategy is essential, starting with a strong foundation and continuous innovation, which are the key rules of the business.

What can celebrity-led brands learn from Prime's experience in the UK?

• Pick Your Market Carefully: It is critical that celebrity founders align naturally and credibly with the brand and the product they are offering. If the link feels inauthentic, consumers and, first of all, the celebrity community won't be persuaded to buy. More importantly, there needs to be room in the market for a challenger brand. While Prime found success in the Sports Drink category, with its Hydration product contributing to overall category growth dominated by a stagnant incumbent like Lucozade, it struggled to penetrate the Energy market. This market is dominated by two extremely strong brands, Monster and Red Bull, making it a difficult space for Prime to make inroads. This misalignment in market selection hindered their success.
• Develop a Superior Offering: Even the most beloved celebrity will have a difficult time supporting a subpar product line. Although a celebrity’s name and endorsement might sell a product to a consumer once, repeat purchases will be difficult to earn. In consumer research, Prime seemed to under-index competitors on its ability to hydrate, which is certainly negative for a sports drink product. The energy drink had an insanely high level of caffeine, creating a lot of negative media attention. Celebrities cannot escape the fact that for an FMCG product to be successful, it needs to excel in at least one of the following areas: convenience, value, or performance. Since celebrity endorsements usually command a premium due to the celebrity’s image (who would want to leverage their image for a cheap product?), and convenience is not typically the main aspect, the product performance must certainly be higher than that of the competition.
• Listen to Your Followers: For influencer marketing to be effective, fans and followers must feel engaged and believe they have a personal connection with the influencer. A deeply engaged following is as important as having a large number of followers. Celebrity brand owners drive this engagement by filling their social feeds with persuasive messages that deliver resonant and relevant information, emotional value, and entertainment. This strong connection can be leveraged to receive real-time feedback on products, engage the audience in innovation plans, and access consumer insights that traditional brands can only dream of. Prime rapid launch of numerous SKUs suggests it did not fully leverage the community around Logan Paul and KSI for feedback and innovation. This oversight contributed to a lack of understanding of the audience, resulting in plummeting sales. Fostering a closer relationship with their community could have helped Prime anticipate market needs and maintain strong sales.

As for Prime, perhaps it’s too early to speak in the past tense. It may have just started with a phenomenal bang before settling into a commendable market share position for its stage of life. I remain impressed by the brand built by Logan Paul and KSI and all they have achieved in such a short time. Prime grew from nothing to ￡150 million in annualized sales within less than a year of trading in the UK. It drove the British public into shops they had never visited before, where they spent significant amounts of money on a category they probably rarely shopped. Overall, this is a fascinating case study for the beverage industry.

As per the emerging celebrity-led brands in the FMCG space, the Prime case shows that for these brands to soar in the era of influencer marketing and social media, they need at least the following elements: a deeply engaged following, a genuine fit between the celebrity and the product, a superior product, and strong two-way engagement with fans and followers. Without these critical elements, even the greatest fame won't ensure a celebrity brand's success.