Logan Paul's Prime sales plummet in a key market as the once-popular drink has growing pains

YouTube creator Logan Paul is one of the cofounders of Prime Hydration.Ben Roberts Photo/Getty ImagesRevenue for Prime — Logan Paul and KSI's energy drink — fell more than 70% in the UK last year.The hype around the once buzzy drink has moderated, the brand said.The company has also faced multiple lawsuits from vendor partners.The hype for energy drink-maker Prime Hydration is drying up.When YouTubers Logan Paul and KSI launched the Prime brand in 2022, demand was so high that a secondary black market formed among UK school children.But the buzz didn't last. In 2024, the company's UK revenue fell about 70% from the previous year, according to public filings. The company pulled in around £33 million (roughly $45 million) in 2024 drink sales, compared to £120 million (about $163 million) the prior year.Consumer interest in its brand has moderated, the company wrote. It's entering a "strategic review process to transition from an initial hyper-growth phase to a more sustainable, long-term presence in the market," it said.Prime remained profitable in the UK in 2024, with about £312,000 in profit, a 92% drop compared to the previous year.There are indications that the heat has cooled off elsewhere, too.US sales declined through the first half of last year, according to estimates from the market insights firm Numerator. As of June 2024, Prime sales in the US were down 40% from the previous year, based on purchase data the firm compiled from its panel of 150,000 US consumers. Numerator attributed the decline to a lack of new buyers, as well as less frequent purchasing and a drop in spending per unit from existing customers. The decline in sales outpaced broader declines in sales in the energy drink and sports drink categories, the company said.Prime entered the global beverage market with a roar, bolstered by the marketing might of its social-media-famous cofounders. In 2023, Bloomberg reported that the company was profitable and set to hit $1.2 billion in sales that year, its first full year in business. The company, alongside other creator product lines like Alex Cooper's Unwell drinks or MrBeast's chocolate brand Feastables, shows the power of social media influencers to make a brand go viral.But influencer businesses can be fickle, and building a brand that can stand the test of time can be tough. Take fashion influencer Arielle Charnas' clothing brand Something Navy, which earned $32 million in revenue in its first year, but saw sales falter a couple of years later."The upside of the influencer-led, social approach to beverage marketing is that it allows you to capitalize quickly on short-term cultural trends, leading to the huge surge," Euromonitor beverage analyst Howard Telford told BI in a statement last year. "But there is a big risk that this turns into a short-term viral fad unless the product itself (rather than the celebrity of the founders) can serve a real consumer need."Prime's vendors have sued, alleging missed paymentsPrime's business woes have extended beyond its declining drink sales.Several of the company's vendors filed lawsuits against it, saying Prime had failed to meet its contract commitments.Last year, one of Prime's suppliers sued Prime's parent company for $68 million. Refresco, a beverage-bottling company, accused Prime of breaching a 2023 contract in which it committed to ordering 18.5 million cases annually over three years.Prime sales were "falling well below" expectations, Refresco's lawyer wrote in the complaint, blaming the decline on "fading social media buzz" and a series of lawsuits.The case was eventually dismissed on the grounds of jurisdiction.Another vendor, Agrovana, also sued Prime last year. The Massachusetts-based importer, which provides Prime with ingredients, accused the beverage brand of not paying for products it had ordered in binding purchase agreements."Sometime in early 2024 or thereabouts, sales of Prime's drinks sputtered, apparently as a result of normal seasonal fluctuations, of the fading popularity of Paul and KSI, and diminishing effectiveness of its on-line marketing," the complaint says. It alleged the company experienced "cash-flow issues" and was "working to secure credit lines to pay the outstanding invoices."Prime denied the allegations, requested the complaint be dismissed, and submitted a counterclaim, alleging Agrovana did not comply with quality standards.In response, Agrovana said that "Prime's complaints were motivated by its inability to sell its finished product as a result of factors that Agrovana had nothing to do with."The case is ongoing.Prime did not respond to a request for comment from Business Insider.Read the original article on Business Insider

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