Energy drinks: D2C to refine customer knowledge

As new food and beverage brands hit the market, those that gather the most insight into consumer reactions and desires early on have the best chance of success. As a result, many emerging brands are leveraging direct-to-consumer (D2C) online stores to refine their products more agilely than before the rise of e-commerce.

Mike Pengue, CEO of energy drink brand ZOA Energy, which sells both D2C and through third-party retailers, and a veteran of traditional beverage companies such as Keurig, Dr Pepper and Nestlé Waters, told PYMNS how direct selling helped the brand understand which products actually resonated with consumers.

“Especially for a small business, you want to be fast, you want to be nimble,” Pengue told PYMNTS in an interview. “You’re going to stub your toe early, but you want to stub it early and move on, and [D2C] gives us the opportunity to be able to be very, very fast.

Pengue noted that, early on, the company’s efforts with flavors that didn’t prove popular led to the development of the products that are now the most popular. Additionally, he noted that the model also makes it easier for the company to roll out limited-time offers and then “either launch them into the general market or move on to the next project.”

Additionally, Pengue explained that the media tracked by the company has been key to its success in the D2C market, with celebrity Dwayne Johnson as a co-founder. Certainly, the sale of cases online has created new opportunities for many to profit from the fanbases of well-known personalities. Not only D2C product brands, but also virtual-only restaurant chains have emerged as ways to test influencer partnerships without the high cost of brick-and-mortar retailers or restaurants.

In addition to selling products for one-time purchases, the beverage brand is also branching out into subscription commerce.

“We want to create a relationship with our consumers, our main followers,” Pengue said.

In fact, subscription food and beverage purchases are on the rise. Research from PYMNTS’ recent study “How The World Does Digital: The Impact Of Payments On Digital Transformation,” which draws on census-balanced panel surveys of more than 15,000 consumers in 11 key economies, reveals that the use of grocery subscription services jumped 8% between Q1 2022 and Q2 2022.

Related: Research Finds Global Consumer Digital Engagement Jumped 1.2% in Q2

In addition, research from The Subscription Commerce Conversion Index, created in collaboration with subscription-based e-commerce platform sticky.io, which is based on a census-balanced survey of more than 1,900 American adults earlier this year, finds that 56% of consumers would be interested in a grocery subscription if product prices were lower.

See also: Inflation multiplies by 10 the number of consumers reassessing the value of the subscription

Additionally, a study from the February/March edition of PYMNTS’ Digital Divide study, “Digital Divide: Restaurant Subscribers And Loyalty Programs,” found that 17% of consumers are “very” or “extremely” interested in providing a restaurant subscription service, and 25% are concept neutral.

Read more: Four in 10 consumers are open to restaurant subscription services

Additionally, for ZOA, the subscription offer not only builds loyalty, but also provides a research opportunity, as the company solicits feedback from its subscribers, saving time and money on other types of research.

As Pengue explained, “That direct communication, that direct relationship with them is very, very powerful.”

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