Shot in the arm: The secret to success in shots... without going head to head with 5-Hour Energy…

Who would cough up $3.99 for a mouthful of caffeine, herbs and vitamins when you can enjoy a coffee and a snack - or a 16oz can of your favourite beverage - for the same price?

“Exactly the same people that are prepared to pay $3.99 for a coffee fix”​ says Schnell, who is best-known for launching Steaz​, the #1 organic energy drink in the US, and has more recently developed a range of all-natural herbal-based shots under the IAM Enlightened banner.

It’s a big ask to get someone to pay four dollars for something and not really feel the effects​

But that 2.5oz has got to do what it says on the tin, says Schnell, who is also managing partner of sports nutrition brand CodeBlue​ and founder of MetaBrand, a one stop for early-stage entrepreneurs looking to make it big in beverages and supplements.

“If you are promising to deliver energy, or relaxation, you have to deliver that in 20-30 minutes or you’re wasting your time. That’s why some of these immunity or hangover shots have not worked because people don’t feel the difference. People won’t pay if they can’t feel something.​

“That’s why we discontinued our I AM Healthy shot - it’s a big ask to get someone to pay four dollars for something and not really feel the effects.”​

By contrast, give them a relaxation liquid supplement/shot that they can take instead of prescription medication at bedtime that really works, and you might just have a loyal customer for life, he says.

But what’s wrong with a [far cheaper] cup of chamomile tea?

“Not everyone wants to drink 16oz of liquid before bed and have to get up in the night", ​observes Schnell.

There is a gaping hole in the natural channel​

So how to compete with 5-Hour Energy, which generates more than $1bn in sales while its closest competitors can only notch up $25m or less?

It’s simple, says Schnell. Don’t. “You can’t go head-to-head with 5-Hour Energy in their class of trade. You’re never going to win there.  ​

“But there is a gaping hole in the natural channel for shots that address the most popular structure/function claims that boomers and others are looking for, whether it is sleeping better, or joint pain relief after exercise.”​

There is also a huge untapped opportunity to sell these products in alternative channels from airports and hotels to college bookstores, he says.

Refrigerated shots could be a tough sell​

But get your product at the front register, or prepare for disappointment, he says. “If you’re not there, you won’t get noticed.”​

Once you’ve established your brand and gained some traction, you can then seek listings for multipacks that can be stocked in the vitamin aisles.

So what are the prospects for firms attempting to break new ground by venturing into the chiller with their shots (such as Hain Celestial with its Kombucha Energy Shot)?

It’s hard to say, but you are definitely limiting your potential market as a lot of locations ideal for reaching your target audience won't have a chiller, observes Schnell. “It’s a tough proposition.”​

Get the right financial backing, and build a brand that really stands for something…​

So what advice would he give budding entrepreneurs looking to stand out from the crowd in the increasingly crowded beverages and shots categories?

First, produce a brand with a mission that means something, not just a product, he says. It’s a given that your product has to taste great and deliver, but successful brands must offer something more.

“Look at TumericALIVE​ and Marley Beverages​​ [created in partnership with the family of Bob Marley], which we have worked with at MetaBrand. These are brands with a mission.​

“I’d rather have 2,000 people love my brand than 100,000 people like it.”​

Second, don’t go into production unless you can secure sufficient funding to get through one to two years, he says. Running out of vital cash to support your brands as you complete your first production run is not the best way to build a brand.

And the hottest ingredients?

Exotic fruits, plants and herbs that have been used for thousands of years, deliver a health benefit and help you create a narrative around your brand, he says.

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