XS Energy drinks are sugar free and marketed at parties. Photo via fb.com
Amway has acquired an energy drink maker, which the company expects will help it reach young entrepreneurs and future independent business owners.
Ada-based Amway said today that it has acquired XS Energy, a maker of energy drinks and snacks started in 2001 by David Vanderveen, Scott Coon and Greg Duncan in Laguna Beach, Calif.
Vanderveen will join Amway as VP and general manager for the XS brand as part of the transaction.
He began his career as an Amway independent business owner.
Terms of the deal were not disclosed.
"Amway got me started in business twenty years ago and gave me the confidence to develop my own product," Vanderveen said. "I'm humbled to be partnering with Amway on the future of XS and couldn't be happier about the opportunities we'll create for young entrepreneurs."
The XS Energy brand includes lines of energy drinks and energy chips, all with B12 vitamins.
XS’s drink products are sugar free, which means they have less than a half calorie of sugar, according to the company’s website.
Prior distribution deal
Since 2003, XS Energy has been distributed exclusively through Amway’s independent business owners, making the company unique in the energy drink industry, which typically is focused on reaching consumers via convenience store and grocery store shelves.
The arrangement has helped XS Energy grow to $150 million in sales each year and expand its reach to 38 markets around the world.
Attracting young entrepreneurs
Amway said it acquired XS Energy due to the brand’s success with a younger demographic, which Amway hopes to tap into.
“According to our research, no demographic is more positive about entrepreneurship than those younger than 35, which is the precise target group for the XS brand," said Steve Van Andel, chairman, Amway. "Bringing Amway and XS together will strengthen our efforts in the years ahead and create more opportunities for aspiring business people."
Rather than relying on traditional marketing to build its brand, XS took the route of “appealing to younger consumers through wildly successful parties, a focus on adventure and the seamless combination of work and play — traits that are increasingly essential for job satisfaction in the under-35 segment.”
Over the last decade, Amway said it has seen "particular success" with its events and lifestyle branding in key growth markets like Japan and North America, where half of the independent business owners registered in the past year are younger than 35.
By acquiring the XS brand, Amway will “infuse the rest of its portfolio with the energy, authenticity and customer experience that has made XS so successful."
Energy drink market
This acquisition also links Amway more directly to the rapidly growing energy drink market, which expanded from a $3.8-billion global business in 1999 to a $27.5-billion business in 2013 and is expected to grow annually by 13 percent until 2018, according to Amway, citing data from Euromonitor and Research and Markets.
Amway is the number one direct-selling business in the world.
Its three top-selling brands are Nutrilite vitamin, mineral and dietary supplements, Artistry skincare and color cosmetics and eSpring water treatment systems, all of which are sold exclusively by Amway independent business owners.
Amway is an $11.8-billion company.