Celebrities & The Beverage Biz
A history of deals that changed the beverage industry and what entrepreneurs need to know today.
“Do celebrity endorsements sell beverages? Is it an even bigger win if that celebrity is also an investor in the beverage brand?”
I get asked this, almost weekly (for context, I run a consultancy that specializes in food and beverage marketing). And if I had a nickel for every time I was randomly asked about the merits of a celebrity investor, I estimate I’d have… an extra $20.00. That’s the price of a single lunch at Tender Greens, but it does represent the roughly 400 times over the past eight years that the founder of a start-up has asked me about the worth of securing a celebrity investor for their food or beverage brand.
The association of celebrity and beverage dates back to the late 1970s, when Coca-Cola pioneered the concept of pro-athletes and eventually mainstream celebrities like Whitney Houston and Michael Jackson (for Pepsi), taking a big gulp of soda on national television and making everyone want to as well. It’s a sure hand the largest beverage brands continue to play, most recently with the troika of Cardi B, Steve Carell and Lil Jon in a Pepsi ad.
But to understand the beverage industry’s fondness for famous investors, you only need to go back to 2004 and the pioneering deal between Glaceau Vitaminwater and the rapper 50 Cent. Vitaminwater was back then the hottest beverage brand in the country, and 50 Cent was at the height of his music career. That relationship, wherein the rap star invests in, endorses and creates a co-branded drink with a top-selling enhanced water, set the standard for what a celebrity investor deal in the beverage industry should look like. Both brand and celeb were all in and shilling hard. Buzz came in the form of exponential media coverage. And a colorful drink (“natural coloring”) with roughly 20–30 grams of sugar flew off the shelves. The $4.1 billion sale of Vitaminwater’s parent company Glaceau, to Coca-Cola, only cemented that deal’s legacy as the gold standard.
Whether or not newbie beverage entrepreneurs realize it, that seminal deal and the optics of its success are the reasons they consider a celebrity investor an immediate brand builder. The truth, particularly today (with a wealth of better-for-you brands, with social media, with digital influencers jockeying with Hollywood celebrities) is something entirely different.
In 2010 I oversaw the public relations campaign for Madonna, Demi Moore and Matthew McConaughey’s investment in the coconut water drink, Vita Coco (disclosure: Vita Coco is and has been a client since 2004). The plan was simple: leverage celebrity buzz to open new retail doors for the brand, make consumers want to drink Vita Coco, and distinguish Vita Coco from its competitors. The tactics were more subtle. On the PR side, we leveraged Madonna’s unquestioned reputation as a shrewd businessperson and one of the wealthiest entertainers to position Vita Coco as a smart investment because it was the best and fastest growing coconut water brand. Why would Madonna (recently profiled in The New York Times) have put her money into a brand that was anything less than the coconut water. It worked: the investment and Vita Coco’s success associated with it, were mentioned in countless newspapers, magazines (remember in was 2010 — print media still mattered then), TV news programs and online news sites. It worked so well that for years, when Forbes issued its annual list of the richest celebrities, Madonna investment in Vita Coco was cited as contributing to her vast wealth, only increasing the awareness of and mystique around the brand. Nine years later, Vita Coco is the US sales leader in coconut water and its parent company, All Market Inc., is evolving into a portfolio of better-for-you food and beverage brands.
What entrepreneurs don’t often see though, are the celebrity investor deals that did not set the media, social media or retail shelfs ablaze… and for every Vitaminwater and Vita Coco, there are many deals where the celebrities’ lasting impact on the brand’s consumer awareness and sales remains unclear. Some investor deals you may or may not know about, below:
MATCHABAR: Drake, Diplo, Ansel Elgort and Billie Eilish. This is an eclectic collection of talent promoting a beverage brand competing in the ‘new age’ energy drinks category. Do they make you want to buy it?
BAI: Justin Timberlake. If your face was buried in a plate of chicken wings during the 2017 Superbowl, you might have missed BAI investor Timberlake’s television spot for this antioxidant beverage, which sold in 2016 to Dr Pepper Snapple for $1.7bn.
WTRMLN WTR: Beyoncé. Let’s just agree Queen Bey can sell ANY-thing, from Lemonade to WTRMLN.
AQUAHYDRATE: Mark Wahlberg and Sean Combs. It’s still unclear to me what either celebrity has to do with superior hydration or pH (“elevated alkalinity”) balance — and the research for the latter is iffy. But they’re all in, I’ll give them that.
SUJA cold-pressed juice: Leonardo DiCaprio, Sofia Vergara and Jared Leto. “The Departed” and “Inception” are two of my favorite films. I think Vergara is one of the funniest women on television. Leto is an acclaimed actor and musician. But not one of them makes me want to buy a $99 “cleanse.” Emily Sommariva, the CMO of LIFEAID Beverage Co., states the case: “The biggest pitfall of celebrity investment is a false sense of what the name alone brings. To get dividends on the deal, the execution of how you amplify the partnership is as important as the celebrity names.”
CORE Premium Bottled Water: Katy Perry. Katy’s bubbly, positive personality, self-deprecation and willingness to be outrageous (you saw her recent Met Ball hamburger get up, didn’t you?) make her a credible investor in the eyes of the average consumer. I can actually see shoppers asking for “that Katy brand of water” and the Perry halo makes you feel good about drinking CORE. But did you know British pop star Ellie Goulding was also a CORE investor? Probably not.
RUNA: Channing Tatum. Even Tatum’s “Magic Mike” mojo, financial investment and enthusiastic support didn’t turn Runa, an outstanding natural energy drink and tea line launched eleven years ago, into a billion-dollar brand.
JUST Water: Will Smith and his son, Jaden. Will Smith described the water brand as “…born out of a child’s love for the ocean” (that child being Jaden) and that he and Jaden “did not want this to be a celebrity brand.” ‘Nuff said.
Ultimately, what any beverage entrepreneur who is considering a celebrity investor needs to remember is this:
- Make sure your celebrity investor is an actual fit for your brand. One of the reasons the Vita Coco investor deal felt so authentic was because all three investors drank coconut water, and physically embodied a healthy lifestyle. That legitimacy becomes brand narrative and deepens consumer connection. Authenticity is a big reason the Vitaminwater deal worked, particularly when the brand launched “Formula 50,” named for 50 Cent, who was then widely recognized for his commitment to fitness. A celebrity investor ideally embodies a brand’s consumer proposition, even if that proposition is as simple as “joy” (like Perry for CORE). The fit matters because the primary reasons you’re bringing in a celebrity investor are for public relations and brand/product validation.
- Try to find a celebrity that isn’t “over-invested.” What can make a deal fresh and interesting is if the celebrity’s connection to the brand is a surprise — authentic, but a surprise. Some celebrities are active investors with a ‘spray and pray’ strategy and who don’t necessarily embody the brands they invest in. That diminishes their PR value.
- Avoid giving free equity. Many celebrities and their teams will bleed a brand for 100% free equity. We all know how much we value something that is given to us for free: not much. As one CEO told me, it’s critical for celebrity investors to have ‘skin in the game’ to get their highest level of support.
- It’s not just about social media. Just because a celebrity has millions of followers on their Instagram feed doesn’t mean their social post about being an investor will goose sales. The endless parade of high-profile celebrity investors today means there’s just too much noise out there — especially on social media. Promoting a celebrity investor requires a strategic balance of public relations, social media, retail promotions and advertising, to truly resonate. Jeff Rubenstein, a top beverage marketing executive who has worked at Vita Coco, WTRMLN and now Health-Ade Kombucha, says: “Celebrities alone can be ineffective, so it’s critical to carefully and deliberately integrate talent into a larger campaign or communications narrative that illustrates, extends, and enhances the values that underpin a brand.”
- Securing even the ideal celebrity doesn’t guarantee success. One reason the Vitaminwater-50 Cent deal was such a win was the newness of it. It just hadn’t been done before. Today, there are dozens of talent managers and even private equity groups that are forging similar celebrity investor deals — some of which make sense, many of which don’t. If you as an entrepreneur feel you can’t find the perfect celebrity for your brand — accept that there may not be one and a celebrity investor strategy may not be the right path. And some beverages are so well branded that a celebrity investor may be unnecessary. Case in point, British sparkling water brand UGLY Drinks, which last year put a stake in the ground in the US as the new “it” water. The brand’s colorful, iconic packaging elicits an immediate emotional connection that few celebrity investors could enhance, and that’s a major building block for becoming a household brand.
Comments or questions? Please find me on LinkedIn.
Disclosure: Gallego & Co. has worked with Vita Coco, Runa, LIFEAID Beverage Co., Health-Ade and UGLY Drinks.
