Energy Drinks
Essay Preview: Energy Drinks
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Keeping tabs on your competition is one thing.
Decorating an entire wall of your office with their products is quite another.
For Tyler Benedict, its a way to remember how hard hes worked and how quickly it could all slip away.
His display of more than 200 energy drinks represents the success hes earned in an industry thats more likely to send intrepid entrepreneurs into bankruptcy than into Donald Trumps tax bracket.
“About 80 percent of these are gone,” he says proudly. “Most energy drinks fail in six months.”
Benedict is the founder, owner and CEO of Greensboro-based Source Beverages, a thriving energy drink company with expected revenues of $2 million this year and distribution in more than 20 states.
At 31, Benedict works at home in jeans and button-down shirts, selling the most caffeinated energy drink on the market.
Burn, a tangy citrus-flavored beverage created in 2002, packs a walloping 118 milligrams of caffeine in each 8.3-ounce blazing yellow can — 48 percent more than industry leader Red Bull.
But the creator of this human rocket fuel isnt what you expect. Benedict exudes an aura of calm and tranquility more typical of a yoga guru than the extreme athletes who down his product.
The University of Florida journalism graduate doesnt fit the mold of success in the billion-dollar energy drink busi-ness — an industry where nearly 1,000 new drinks have been released in the past four years.
“Weve been very careful not to grow too fast,” Benedict says. “Lots of companies try to saturate the national market right away, and they go bust.”
Red Bull, introduced in the United States in 1996, jump-started the energy drink business. The Austrian company has dominated the market ever since, and in 2004, its sales topped $1.2 billion. His other competitors include multibillion dollar companies Coca-Cola and Pepsico.
Benedict isnt fazed by the competition. He has a zen-like confidence that if he works hard enough, he will succeed.
“I cant even explain it, but Tyler never even seems to think of quitting,” says wife Kristi Benedict. “It was something his parents taught him to have so much confidence.”
An avid mountain biker, Benedict moved to North Carolina after college, not for a job (he didnt have one), but for the terrain. He met Kristi, an N.C. State graduate, while living in Charlotte.
He proposed three and a half months after they met.
Like so many things in his life, he had that eerie confidence that it was exactly the right thing to do.
“It was very typical of Tyler,” Kristi Benedict said. “He knew what he wanted, and he knew it was right, so he just went for it.”
He was just as sure that his job at Charlotte marketing firm Kothe-Howard wasnt going to work out.
“The job was going nowhere,” he says.
So, in 1997, Benedict headed south to his home state of Florida to work for his fathers advertising agency. But that wasnt the right fit either.
“He realized that he didnt want to work for anyone else,” says Kristi Benedict, who used the time in Florida to pursue a masters degree.
“We spent a lot of time at the bookstore. Id be studying for the GMAT, and he kept wandering over to the health and nutrition aisle,” she says.
As an extreme athlete, he was intrigued by the emerging energy drink market.
He had heard about bikers drinking flat Coke — athletes needed a drink with low carbonation and high caffeine — for a quick burst at the end of a race.
Several energy drinks were on the market, but Benedict was determined to make one he would actually like.
He started with Propel, a powdered energy drink, and filed paperwork to claim the name. Food industry giant Quaker Oats trademarked a flavored bottled water with the same name within two days.
Quaker (now owned by Pepsico) offered Benedict a six-figure sum to surrender the trademark.
Benedict took the offer, changed the products name to ProLyte and hit the extreme sport circuit to sell the sugary serum to athletes in search of a surge.
The response was less than positive.
“Wed give people samples, and theyd say it was awful. Id be thinking to myself, Were eating Taco Bell just to get by, and they dont even like it, ” Kristi Benedict recalls.
Even when the money from Quaker Oats was nearly exhausted, Benedict wouldnt give up.
The couple moved to Greensboro, and Benedict started over in late 2001, working from home and borrowing money from family and friends. His new product was a ready-to-drink beverage called Burn.
“We wanted to make something that was different than anything else out there,” he says.
Creating the basic components of Burn wasnt difficult. At his fathers agency, Benedict had worked on accounts for vitamins and nutritional supplements.
“I knew the basic ingredients that needed to be in there, so I just had to find a way to make the drink taste good,” he says. “So many energy drinks taste like medicine.”
Benedict talked family and friends into sampling his home-brewed concoctions to get an honest opinion.
“You find yourself having to rely on friends and family, and I lost a few friends in the process,” he says.
Benedict found that some beverage distributors tried to take advantage of him, and he dealt with a few unsavory characters while figuring out how to sell the drink.
He also had a tough time convincing people to take him seriously.
“My dad always said once you hit 30, people start respecting you,” Benedict