“Mommy, who is LeBron James?” – my four-year-old daughter asked.
“He’s one of the best basketball players in the world,” I replied, explaining some of his accomplishments. “Why?”
“I really like his drink,” she said, sipping a sip of Mtn Dew Rise from the sample pack that Pepsi sent me before my interview with James. Pandemic parenting at its best. After trying the energy drink just once, she got hooked on it – and immediately became a LeBron James fan.
PepsiCo is counting on a similar reaction by poaching James from arch rival Coca-Cola, whom he has supported for 17 years. The four-time NBA champion is considered one of the best-selling athletes in the world.
On Thursday, Pepsi unveiled its first ad campaign featuring James. It will include a commercial that will air throughout the NBA playoffs.
In the new commercial, shot earlier this year, James imagines what his life would be like if he didn’t “go higher” every day.
“What would I be if I took a nap? If I skipped practice? If I was distracted… If I lost sight of my goals,” he asks in the blurb. “No, I decided to step up.”
James told CNBC that he’s excited about the new partnership and hopes he’ll be able to bring Mtn Dew Rise to the forefront despite the already crowded energy drink space.
“I think the energy drink concept is something I gravitate toward,” James said. “To rise above self-doubt and rise above the occasion.”
Given that James, 36, dominates the basketball court, has a variety of philanthropic and social justice initiatives, and runs the LeBron James business empire, which includes everything from restaurants to media, he may be the last person who needs an energy drink.
An overcrowded but growing category
As for everyone else, Pepsi executives hope Mtn Dew Rise differentiates itself enough to stand out. It contains about as much caffeine as two cups of coffee and is packed with vitamins.
The brand is advertised as a way to “start the morning with a mental boost, immune support and zero grams of added sugar.” It comes in six fruity flavors, including Berry Blitz, Peach Mango Dawn and James’ favorite, Pomegranate Blue Burst.
The Los Angeles Lakers star will be the face of the company, along with other influencers to be named in time.
“We know it’s a crowded category,” James said. “But we believe there is still room.”
According to Euromonitor, retail sales of energy drinks totaled $14.15 billion last year.
“It’s a category that’s growing significantly,” said Duane Stanford, editor and publisher of Beverage Digest.”
This category is seen as the next frontier for Coke and Pepsi as soda consumption has declined as people have become more health-conscious. Leading the category by sales is Monster Energy, which is distributed by Coke.
Pepsi is not new to this category. It acquired Rockstar Energy for $3.85 billion in March 2020, and early results have been positive. During a first-quarter earnings call, Pepsi CEO Ramon Laguarta said Rockstar sales are rising again after several years of low or falling demand. Laguarta said it’s too early to tell if that has attracted new consumers to the category, but the brand’s resurgence is encouraging.
“Energy is a top priority for PepsiCo right now, and they essentially did everything they could by signing LeBron,” Stanford said. “It gives an indication of how serious they are about energy and how much they think LeBron can really help them.”
In March, Pepsi renewed its sponsorship with the NBA as the league’s official soft drink. Mtn Dew will remain the title sponsor of the three-point shooting contest during All-Star Weekend. Pepsi began a partnership with the NBA in 2015, after partnering with Coke for nearly three decades. Pepsi has also partnered with NBA stars Zion Williamson and Joel Embiid.
James was an 18-year-old phenomenon when he signed with Coke and began working with its Sprite brand. During his time with the company, he helped promote Sprite and Powerade, starring in many commercials and even introducing a limited-edition flavor. Last September, he parted ways with Coca-Cola by mutual agreement.
The decision came at a time when Coke was reviewing its finances in the wake of the pandemic. The company’s sales suffered as fewer consumers went to restaurants, sporting events and movie theaters. At the time, Coke said it wanted to invest in places that would provide long-term growth. In addition to cutting more than 2,000 jobs, Coke cut its global beverage lineup from 430 brands to 200, dropping brands like Tab soda and the smoothie business.
“I had an incredible experience at Coke, and I still have a wonderful friendship with it that will last forever,” James said. “But when the opportunity arose, it was the perfect time for us to move on.”
Stanford said Coca-Cola probably couldn’t justify the cost of working with James. It’s unclear how much the deal cost, but by comparison, Nike’s deal with James cost more than a billion dollars.
“He now has his hands in a lot of media, sports and entertainment, and it becomes a much more powerful asset when it comes to attracting young consumers,” Stanford said.
Pepsi would not comment on the value of its deal. The company said James is the first athlete to launch an entirely new brand, and the partnership will use the new model to support James as more than just an athlete. Pepsi will work with him on issues related to education, social justice and initiatives in low-income communities.
“Almost all of the partnerships and causes that I do at the moment are always somehow connected to my foundation and making sure that we continue to shine a light on my community and other communities that need a voice, need opportunities,” James said.
His foundation’s philanthropic endeavors include the I Promise School in his former hometown of Akron, Ohio. He is also involved in More Than A Vote, a group supported by athletes to combat voter suppression.
“I think we can all do more,” James said when it comes to issues related to social justice and closing the wealth gap. “We can all do better,” he said.
When asked if he could have a future with Pepsi’s Gatorade sports drink, which seemed like a natural fit, LeBron didn’t rule out the possibility.
“We’ll see, we’ll see,” he laughed. “Obviously, we want to start with small steps – crawling before we walk. We’re in a good place now, and we’ll see what future opportunities will be right for us,” he said.
Gatorade has been known to mock James and then apologized to him for a 2014 tweet that said, “A person experiencing cramping was not our customer. Our athletes can take the heat,” after James left Game 1 of the NBA Finals because of leg cramps.
James signed this deal in the midst of a pandemic and an NBA season in which strict protocols were in place to prevent the spread of Covid-19.
“I haven’t had a chance to meet with anyone face-to-face, and that’s because of the season that goes on as we’re stuck in our hotel rooms,” he said. “I’m looking forward to meeting the CEO and all the great people at Pepsi.”
He has been involved in the creative process through Zoom calls and emails.
“Because my name is associated with it, when you do something that means something to you and it hits home – you absolutely want to be involved,” he said.
With seemingly inexhaustible energy, the Lakers star said it’s his family and kids at Promise School that get him out of bed every morning and push him to be better.
“They need that motivation. They need someone who gets up every day, who wants to be better and wants to be more, who wants to challenge what other people don’t want to challenge,” he said.
However, James said even he has lazy days.
“There are weeks, there are days, there are months when I don’t have enough energy because I work hard, walk a lot and strive to be the best at what I do. So any little nudge from a drink, a person or music – I try to make the most of it.”
According to marketing executives, for Pepsi, bringing in King James is a big win.
“He’s iconic,” said Bob Dorfman, creative director of Baker Street Advertising. “He definitely helps promote the product, and from a PR standpoint it looks cool that they stole him from Coca-Cola.”
And in case you were wondering about my daughter – potentially the youngest fan of Mtn Dew Rise – yes, the drink works. She stayed up until midnight bouncing off the walls.