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But celebrity has played a part in the success of vitaminwater and smartwater, with Jennifer Aniston as a spokeswoman and having celebrities photographed with the product. How is that different?
There’s a lot of value in celebrities in terms of marketing products, but you can’t just sell a product based upon that hype. You need to sell a product based upon the real consumer benefits. When you can marry that together with a great marketing campaign that includes people that consumers know and trust, you’ve got the best of both worlds. The hype and the fad is not associating the product with a celebrity; it is creating demand for a product based solely on that connection instead of the product’s consumers benefits.
When you’re considering an investment, what do you look for in the company itself?
Real consumer benefits, breakthrough technologies and committed, principled and talented management, I’d say are the main three. We do focus on companies with growth potential; we’re not interested in companies that have peaked.
How does your approach differ from than that of other investors?
We spend a lot of time thinking about the segments and categories we want to invest in, and then we approach companies directly as opposed to waiting around for an auction process. We really partner with the companies we invest in and work hard to be great partners.
In what ways do you like to see your capital used?
Obviously, R&D and product development, sales and distribution and marketing investment to effectively portray the benefits associated with the products we are getting behind.
You’ve said you see similar opportunities for Muscle Milk as there was for vitaminwater. Where do you see parallels between the two products?
Muscle Milk addresses serious athletes with a very serious product. It has achieved the same kind of exponential growth that vitaminwater did. vitaminwater is a sensation, as well. I think that both companies have extremely talented management groups and they’re both terrific brands. But the growth that Muscle Milk has achieved, together with Cytomax, is really no different than the growth we saw with vitaminwater.
Where is there room for beverage manufacturers to be creative in a crowded market sector?
It comes back to developing an innovative product with real consumer benefits, like a highly functional beverage or one that contributes to better health. Obviously, we’re also very committed to creating the very best products that can be made. Quality contributes to innovation. For us, the focus is not on price point, but on creating the very best product that can be made.