Why energy drinks went flat: Suntory Beam’s Jonny Croft says category went too narrow, now reinvesting in brand to give V back its fizz, cans CX, CRM and first party data

News Plus 3 Aug 2021 - 3 min read

Why energy drinks went flat: Suntory Beam’s Jonny Croft says category went too narrow, now reinvesting in brand to give V back its fizz, cans CX, CRM and first party data

By Josh McDonnell - Senior Writer

V's Jonny Croft: "A lot of the issue comes down to the way we market the brand, which is marketing energy drinks to energy drinkers, which ignores a broader consumer demo." Now he's shaking things up.

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Tags: V Energy, Clemenger BBDO, Frucor Jonny Croft CRM TikTok

Suntory Beam marketer Jonny Croft says the energy drinks category went too narrow and ran out of puff. Now he's going all out on brand to target a broader pool of customers. He's ignoring the mad rush for first party data and CRM and instead reinvesting budget from cancelled events. He aims to drink rivals' milkshakes.

What you need to know:

V Energy's Jonny Croft says the energy drinks category went too narrow, trying to target energy drink drinkers instead of just... drinks drinkers.
He's going old school, bucking the trend of marketers scrambling for first-party data strategies, stating he has no plans to implement a CRM or customer data collection system and spending on ads instead.
As well as above the line brand building, V is pouring budget into emerging social media and promotional campaigns to refresh the parts others fail to reach.
The brand has also entered into a partnership with youth publication LADBible to target a wider audience in the 18-24 demographic.

Energy kick

V Energy had run out of puff, according to marketing boss Jonny Croft. Sales had lost their fizz and the broader category was looking tired. Now he's looking to shake things up.

"Energy drink penetration is pretty low as a category and it has struggled to improve on that in recent years. Penetration is only roughly 20 per cent and it has been going the wrong way for a long time, particularly in the 18-24 category," Croft said.

The marketing boss believes V "wasn’t doing itself any favours" in terms of brand position and had lost a lot of relevance. V had once held close to half the market share of the category but had watched that drop off significantly.

But he says the broader category has been guilty of the same blinkered approach.

In previous campaigns, V and rivals such as Red Bull, Monster and Mother have associated themselves with a male-centric audience that is already a frequent consumer of energy drinks.

"A lot of the issue comes down to the way we market the brand, which is marketing energy drinks to energy drinkers, which ignores a broader consumer demo," Croft said.

"However, what research found is that rejection of the category is much lower than we thought, so we spent less time looking at the barriers and how we can present ourselves in culture – leaning heavily into a more progressive marketing strategy."

Forget shiny

Meanwhile, V isn't feeling the sugar rush countless other brands across Australia appear to be riding when it comes to first party data, martech and CX.

Croft said V has no plans to invest in a CRM or customer first party data collection strategy, with the business gaining most of its customer insights through its large-scale social media following.

The business is launching an e-commerce platform, however, Croft wouldn't confirm a timeline for its development.

"We don't want to be pushing out unnecessary emails every day when we know that won't work for our audience," Croft said.

Instead the business has launched a new brand campaign that shifts its positioning and takes a broader and more lighthearted approach. Leaning on the ‘Bugs’ from its previous TV spots in the early 2000s, the brand is going big on positivity and above the line spend.

"We like to spend more than half of our funds above the line, that’s really the core driver for market penetration and then using below the line to drive that always-on strategy to bolster our reach and frequency," Croft said.

Social push

V is also shifting investment into new and emerging social media, such as TikTok and was one of the early movers on the platform, something which Croft believes is a big advantage for brands trying to make inroads into not just younger demos but those who have moved away from traditional media consumption.

“We know a lot of those social media channels are really valuable for us alongside the traditional, making a cross-platform strategy key in reaching the entire scope of those demos because they aren't just found in one place anymore," Croft said.

V also has an existing partnership with youth publication LADBible. The UK-founded title launched its first social content agency in May, with V Energy signing on as a foundation client, alongside Amazon Prime Video.

LADBible Social’s remit includes managing its partners’ YouTube, Facebook, Instagram and TikTok platforms across Australia and New Zealand markets.

The brand currently has over 400,000 followers on its dedicated Australian Facebook page, another 150k in New Zealand and a growing following on TikTok and Instagram.

“Our following is significant and has been the continued source for our brand engagement strategy, with consumers responding to posts at a high rate and on a daily basis," Croft said.

"V is upping its investment behind the brand and a big part of that is increasing our spend in those new social channels. But at the same time, V has a strong promotional platform which we can't ignore but has been significantly impacted due to Covid," Croft said.

Reinvesting cancelled event dollars

Croft is alluding to the brand's long-term association with the music, sport and gaming sectors, with live music being one of the largest reach and engagement drivers for V Energy.

Prior to the pandemic, the brand had entered into a multi-year deal with live music promotor Live Nation, inking an arrangement with one of its larger events, Festival X.

However, due to the extended lockdowns and restrictions, V was forced to pull out of the deal.

"We’ve tried to reinvest those dollars to make sure that we are remaining connected with consumers and top of mind in other media channels but it isn’t the same and is still a real challenge," Croft said.

"It’s not always possible to get the same engagement or return on those channels because they are shorter-term or fit for another purpose. So we are keeping a close eye on the music scene and are really keen to see it return."