Celsius EVP of Marketing Matt Kahn never had imagined esports as a potential partner opportunity. Founded in 2004, the performance energy drink company has surged in the energy drinks space by positioning itself adjacent to the traditional fitness industry. But when the esports organization Echo Fox approached Celsius about a partnership, it only took a little research for Kahn to realize that a sponsorship made a lot sense.
“They professed to drink it while in training and tournaments,” Kahn said. “I wasn’t shocked but found it super-interesting that these players are terrific athletes in their own right and need to focus for hours.”
According to Kahn, esports reached an audience of 335 million people globally in 2017 and is expected to grow to a market of more than 600 million by 2023. Meanwhile, brand investments — media rights, advertising and sponsorships — in esports are expected to reach nearly $900 million this year and jump to more than $1.5 billion by 2022. Those were exciting numbers for a brand that plays in a relatively new performance energy drink space, Kahn said. Competitors include brands like Bang and Monster Energy’s recent Reign product.
“It’s new for us,” Kahn said. “But having done the research into the industry and being a student of business and marketing and a sports lover, the category is exploding.”
Prior to the partnership with Echo Fox, Celsius stayed close to the core athletic segment it felt their product aligned with best. Celsius experienced a worldwide year-over-year revenue growth of 45 percent globally and 62 percent in the U.S., in part due to growth in sporting good channels. The brand went from a 25-store test with Dick’s Sporting Goods two years ago to more than 500 locations this year. Likewise, Celsius is positioned in 300 Academy Sports stores.
But recognizing the potential growth and market penetration of esports could be a boon for the company, Kahn said. He’s excited about Celsius’ entry into what he believes could be the “next billion-dollar industry.”
To that end, he considers Echo Fox to be an ideal first partner in the industry. Founded in 2015 by NBA champion Rick Fox, Echo Fox was recently named one of the most valuable esports organizations by Forbes and boasts teams in a variety of games ranging from League of Legends to Super Smash Bros. to Dragon Ball FighterZ.
“Celsius continuously innovates and pushes the boundaries when it comes to keeping athletes healthy, and their support of a diverse group of athletic competition is something we admire,” Fox said in a statement. “Ensuring our players are competing at the highest level possible is a top priority for Echo Fox, and we’re confident that our partnership with Celsius will help us achieve that goal.”
As part of the partnership, Celsius now has the ability to use team and player images and likenesses as well as player testimonials. But Kahn also expects the product to be integrated organically into the team, an increasingly common tactic when targeting younger demographics. Some areas including placing the product nearby while players engage in cardio and hand-grip exercises, as well as competing in their respective games. “We’re going to have significant behind-the-scenes footage of these guys training and consuming the product,” he said. “Authenticity is important for me, to see who really loves the product.”
Esports are a natural habitat for energy drinks, with brands like Red Bull and Monster having already established deep ties in the industry. Yet it took time for Celsius to realize the market potential for itself. Now, with Echo Fox signed on as its first partner, it appears the brand is eager to make up for lost time.