Huntington-based Roar Beverages has reached an agreement with retail giant Target Corp. to test-market Roar's sports drinks in 85 Target stores throughout the Northeast starting next month.
The agreement is the first Roar has cemented with a national retail chain for markets outside New York State. The test will run for three months, and if it's successful, Target will roll out Roar to 900 Target stores nationwide, according to a spokesman for Roar. The drinks are sold now in 1,500 retail outlets in the New York metro area and Vermont.
Launched in May 2012 by Roly Nesi, 31, a Cold Spring Harbor native who is now Roar CEO, the company has grown rapidly. Last year it shipped 350,000 bottles of its coconut-water-based sports drinks to retail outlets and schools. This year Nesi said he expects to ship 1 million units by adding chain-store deals, growing sales at existing outlets and increasing product offerings.
Breaking into the U.S. sports drink market is no easy task. The $6 billion market is dominated by Gatorade, which is owned by PepsiCo, and Powerade, Coca-Cola's offering. Together the two brands account for almost 100 percent of total sales, according to IRI, a Chicago market research firm.
"It's very tough for any new brand to get widespread traction," said Jeff Klineman of BevNet, a Boston company that covers the beverage and food markets. And sports drink manufacturers are seeing increased competition from energy drinks and enhanced waters.
"A lot of brands are using coconut water to try to create the next-generation sports drink," Klineman said. Water from coconuts contains elevated levels of electrolytes such as sodium that are lost through sweat.
Roar Beverages is trolling those waters. "Our goal is to bridge the gap between energy drinks and sports drinks," Nesi said. The company markets its drinks as a healthy alternative to high-sugar sports drinks. Coconut water is low in sugar compared to fruit juice.
The company also adds B vitamins that it says promote energy, and its packaging is designed to look like an energy drink's with bold colors and a prominent lightning bolt. But while many energy drinks contain caffeine, Roar has none.
Making local inroads
The 20-ounce drinks, which come in seven flavors including Fruit Slam (fruit punch), Green Rush (lemon-lime) and Patriot Punch (cherry/blue raspberry/lemonade), are manufactured by Lidestri Foods in Pennsauken, New Jersey. The suggested retail price is $1.69 per bottle.
Nesi credits Roar's success at breaking into the market to acceptance of the product by its target demographic: 8- to 18-year-olds. The product is designed to be a "cool," "young" alternative to their parents' sports drinks.
Key to gaining traction has been grassroots marketing in which Roar has sponsored about 100 youth athletic programs in the metro area. These sponsorships have included providing teams with sports jerseys and free cases of Roar during games, as well as free drinks they can use for fundraising.
"The key is not getting the product on the shelf, but getting products into the hands of customers, who then go to the stores and ask for it," Nesi said. Among the company's key retail outlets are grocery chains such as King Kullen and Fairway, youth-oriented sports facilities such as Baseball Heaven in Yaphank and The Sports Hub in Syosset, and convenience stores such as 7-Eleven.
Expanding in schools
Schools have been another successful avenue for sales. In October Roar came out with a drink that meets new USDA Smart Snacks nutritional standards. Roar Lite, with 60 calories in a 12-ounce bottle, is one of the few sports drinks that meets the new guidelines, the company said. Currently, Roar Lite is available in 350 schools in 10 states. This fall that number will grow to 1,000 schools in 15 states, Roar officials said. "This is really big for us in terms of both revenue generation and building brand awareness," Nesi said.
BevNet's Klineman noted there are plenty of coconut-water sports drink companies clamoring for market attention. One of the best financed has been BodyArmor, which grew sales 148 percent to $22 million last year, according to IRI. "If coconut water/hybrid drinks like BodyArmor take off, there will be room for other companies such as Roar in its wake," said Klineman. "But they still face stiff competition," he said.
Nesi is confident Roar can hold its own. "We have proven we can outsell other products in the most competitive market in the country -- New York," he said. "I'm confident we'll continue to grow."