Lemon Thirst Energy Drink Strategic Marketing Plan

Introduction and Company Overview

The American soft drink market has been gradually shrinking over the last two decades due to health concerns. Many health experts are warning against sugary and carbonated drinks, so sales have naturally declined. Several reports show that consumers who have abandoned sugary and carbonated drinks are turning to alternative beverages such as teas, natural juices, and water. This has resulted in the steady growth of healthier non-carbonated drinks (Al-Shaar et al., 2017). Among the many alternative drinks recording steady growth are energy drinks.

The energy drink market has seen steady growth since its launch in the United States in 1997. According to Kunst (2019), since energy drinks entered the U.S. market that year, the segment has grown at an annual rate of approximately 20 percent. The market is now valued at over 53 billion U.S. dollars in annual sales and has recently overtaken the soft drinks market (Kunst, 2019). More and more energy drinks are sold every year for increased energy, and their popularity is also rising due to association with various sports disciplines and the alcoholic beverages industry.

The Lemon Thirst Beverage Company is one of the latest entrants into the energy drinks segment. The Company is based in Ogden City, Utah, and its flagship product will be the Lemon Thirst energy drink. The drink targets the rapidly expanding energy drinks segment and distinguishes itself from competitors by being a healthier alternative. This paper outlines the strategic marketing plan for the drink in the United States energy drinks market.

Mission Statement: The mission of the Lemon Thirst Beverage Company is to produce products that satisfy consumer needs and enhance the community and society through eco-friendly production and marketing methods.

Vision: The vision of the Lemon Thirst Beverage Company is to become a leader in the manufacturing of healthy and nutritious drinks in the United States.

Values: The Lemon Thirst Beverage Company upholds the following values: integrity, honesty, uniqueness, respect, collaboration, leadership, sustainable growth, and productivity. These values were adopted because they align with those upheld by many people across the State of Utah.

Situation Analysis and Industry Overview

An energy drink is a special beverage formulated to provide an increase in physical and mental energy. Most energy drinks deliver this effect through active ingredients such as caffeine, guarana, sugars, creatine, herbal supplements, taurine, and vitamins (Mahajan, 2020). The main ingredient is typically caffeine, which provides an almost instant spike in physical and mental energy upon consumption.

Examples of popular energy drinks already on the market include NOS, Monster, Red Bull, and Rockstar. While Lemon Thirst faces serious competition from these established brands, the Company intends to position its product as a healthier option. Lemon Thirst is formulated with natural ingredients — guarana, green tea extract, and ginseng — as opposed to the artificial ingredients and carbonated sugars found in most popular energy drinks.

In addition to using natural ingredients, Lemon Thirst uses artificial sweeteners instead of real sugar, resulting in a very low calorie count. In short, Lemon Thirst can provide the same mental and physical energy boost as products like Red Bull, but with fewer calories per serving. This makes it healthier in two ways: first, because it is made of natural ingredients, and second, because it does not deliver an excessive caloric load (Mahajan, 2020).

As of 2018, the international energy drinks segment was estimated to be worth at least $53 billion. The segment is expected to grow at 7.2 percent annually over the next several years, reaching $86 billion by 2026 (Roy & Deshmukh, 2019). As of 2019, there were more than 200 energy drink brands in the United States alone, including products from major corporations such as Pepsi, Dr. Pepper, and Coca-Cola. The table below shows the market shares of the major energy drink brands as of 2019.

Table 1. U.S. Energy Drink Market Share (adopted from Mahajan, 2020; Roy & Deshmukh, 2019).

Red Bull (Red Bull, Inc.) — 42% | Monster (Monster Beverage Co.) — 14% | Rockstar (Rockstar Inc.) — 11% | Full Throttle (Coca-Cola Co.) — 6.9% | Amp (PepsiCo) — 3.6% | Others — 22.5%

Position of the Company within the industry: Lemon Thirst is currently a relatively unknown company compared to more established brands. It was recently founded by two individuals in Ogden City, Utah, and currently has only those two founders as employees. However, the founders plan to hire ten staff members in the near future.

When the Company begins full operations, the two founders will oversee its entire structure. One founder will head the production and operations departments, while the other will lead the administration, marketing, and finance departments. Because the Company does not have unlimited resources, the founders intend to minimize operational costs to ensure every dollar spent generates value.

Positioning: The Lemon Thirst drink will be introduced to the market as a super-healthy energy drink containing no caffeine, no sugar, and using real plant-based stimulants. Because it contains no caffeine or sugar, Lemon Thirst will appeal to health-conscious consumers, vegetarians, diabetics, convalescents, and others who prefer to avoid conventional soft drinks.

Targeting: Lemon Thirst intends to target young people between the ages of fifteen and thirty-five, who make up approximately a quarter of United States energy drink consumers (Freeman et al., 2016). The fast-paced lifestyle of this age group makes them ideal candidates for energy drinks, as they engage in energy-demanding activities throughout the day. This target audience is largely concentrated in metropolitan cities, colleges, campuses, and high schools.

Product Philosophy: The product has a catchy, clever name intended to motivate consumers to buy it and quench their thirst. The philosophy is to energize both the brain and the body so that people can do more, remain more active, and accomplish their goals — all without accompanying negative health consequences.

Total Market Opportunity: Industry analysts value the United States energy drink segment at approximately $53 billion USD, with projections to exceed $86 billion by 2026. The Lemon Thirst Beverage Company aims to capture just 0.01 percent of the U.S. market in its first year of operation, representing a market value of approximately $0.53 billion. From that foundation, the Company plans to grow its market share progressively.

Macro-Environmental Factors:

Political Environment: The political environment in Ogden City and the State of Utah is conducive to business. Both state and federal governments are implementing measures to encourage new business formation and job creation, including pro-business regulation and tax benefits.

Economic Environment: The coronavirus pandemic reduced disposable income and dampened spending on non-essential items such as energy drinks. However, recovery efforts and the prospect of effective treatments are expected to restore consumer spending over time.

Social-Demographic Environment: The primary target market — individuals aged fifteen to thirty-five — represents approximately a quarter of the U.S. population and continues to grow (Freeman et al., 2016). Secondary markets include convalescents, athletes, and consumers dissatisfied with conventional soft drink brands.

Technological: The United States has advanced scientific and technological capabilities to support the safe manufacture of energy drinks, along with a large pool of food scientists and engineers. The Company intends to engage such specialists as consultants.

Ecological: The manufacture of soft drinks is energy-intensive and consumes large quantities of freshwater, while plastic bottles and aluminum cans pose environmental concerns. In contrast, the Lemon Thirst Beverage Company plans to use less water and energy in production and to adopt 100 percent biodegradable packaging materials.

SWOT Analysis

Strengths: The Lemon Thirst Beverage Company has several notable strengths. First, its energy drink is healthier than most competing products because it uses no sugar or caffeine and relies on natural ingredients. It is also lower in calories per serving. Second, the drink is sweeter and better-tasting than many established energy drinks, including Red Bull. Third, the Company will use a production technique that consumes less energy and water, which will appeal to environmentally conscious consumers and generate positive publicity. Finally, the Company is based in a city associated with strong community values such as partnership, loyalty, integrity, and hard work.

Weaknesses: The Company's primary weakness is that it is new to a market dominated by well-established and widely recognized brands. It also lacks the financial resources and skilled workforce needed to compete aggressively with larger manufacturers. Additionally, the Company currently has no experience in the manufacturing and distribution of beverages.

Opportunities: The greatest opportunity for the Company is the rising demand for healthy beverage products in the United States. The energy drinks segment is also projected to grow strongly over the coming years. Furthermore, because energy drinks face relatively few regulatory barriers in many international markets, the Company has the opportunity to expand into Europe, the Middle East, Asia, and Africa.

Threats: The most significant threat is competition from well-established and well-resourced competitors. Additionally, state governments and regulators across the country are beginning to explore tighter regulations for the energy drinks market. The Company also faces the risk that its limited financial resources may not sustain operations through to the break-even point.

Table 2. Lemon Thirst SWOT Analysis

Strengths: Unique and healthy energy drink; values aligned with Utah community; fewer calories per bottle; eco-friendly manufacturing plans; sweeter and better-tasting product.
Weaknesses: Lean financial resources; no geographical presence; no experienced staff; no distribution network; currently only one product.
Opportunities: Higher demand for healthy drinks; rapidly expanding energy drink market; low barrier to entry; potential for global expansion.
Threats: Increasing regulatory scrutiny; potential for serious competition from established players; risk of new regulations being approved at any time.