Here’s How 5-Hour Energy Kicked Coffee Out of the Buzz Game

One entrepreneur, a 2-ounce bottle and millions of fans

Let's assume you're reading this at 2 p.m. The lunch you had a couple of hours ago is leading to hypoglycemia. Since you've been awake for eight hours or so, your body's circadian rhythm is on the downswing. In other words, you're sleepy as hell. What to do? If you're like millions of other Americans, you crack open a 5-Hour Energy. 

Nick Ferrari

 

 

Those tiny, rainbow-colored bottles, produced by Living Essentials, that beckon alongside the chewing gum and candy at the supermarket checkout have become ubiquitous. By one estimate, Americans buy some 9 million bottles a week, making for 2015 sales of $1.2 billion. The thing to know about 5-Hour Energy is, beyond just dominating the so-called energy-shot category, it is the category.

"Even nonusers would be able to tell you what a 5-Hour Energy shot is," said author and caffeine expert Ted Kallmyer, who operates the site CaffeineInformer.com. "Other brands have tried to compete, but even Red Bull and Monster both failed with their own shots because 5-Hour already had the market cornered."

Bhargava: Hindustan Times/Getty Images

How? Advertising is one reason. Most of us have seen those low-budget commercials, encouraging us to get rid of that "2:30 feeling." But the rise of 5-Hour has more to do with the business maxim that it is the innovator rather than the inventor who leads.

When India-born entrepreneur Manoj Bhargava introduced 5-Hour to the market in 2004, energy drinks like Red Bull and Monster—soft drink-sized beverages aimed at teenage boys—had been around for years. But Bhargava went after energy-sapped adults by selling them on the idea of a quick-fix jolt where taste was hardly the point. GNC was the first national chain to stock 5-Hour's 1.93-ounce bottles. Then came the pharmacy chains and Walmart.

 

Another boost for the brand is its positioning at checkout as opposed to the wasteland of assorted beverages. While Living Essentials spokesperson Melissa Skabich insisted that "customers reach for 5-Hour Energy because it works," she conceded that "shelf positioning plays a large part in increasing visibility of our product."

And what exactly is in that product? The company claims an "energy blend" of amino acids and vitamin B furnish that desired kick in the pants. But health experts maintain that the only magic in this potion is caffeine—about 200 milligrams of it, in fact, or roughly the equivalent of a 12-ounce ("tall" size) Starbucks dark roast coffee.

Given the complaints about the taste of 5-Hour, one has got to wonder why consumers wouldn't rather just grab a cup of coffee.

But Michael Fernandez, founder of the marketing shop Factory 360, maintains that misses the point. "It's all about price and convenience," he said. "5-Hour has a cult following, and its consumers have found something that works."

Courtesy 5-hour Energy

This story first appeared in the October 3, 2016 issue of Adweek magazine.
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