Hall of Fame Beverages, Inc (HFBG)

[cents2ks]

Calvin Thornton Ross - Robbing people blind for nearly a decade now...

http://www.allbusiness.com/north-america/united-states-california/694379-1.html

WOW "helped sponsor the Indy 500" REALLY?


CALVIN Ross-Thornton dubbed his energy drink Pit Bull because of the breed s reputation for strength and fortitude.

Some might think the name suited for a different reason--that it takes a pit bull's grit for a small business to venture into the beverage market.

When Ross-Thornton and his partner James L. Robinson launched their business, Hip Hop Beverage Corp., they entered a market dominated by large, multinational players. More than 100 products are fighting for attention in the energy drink segment, and while Coca Cola Co. and Pepsico have not yet put the brunt of their marketing muscle behind the category, many believe it is only a matter of time before they do.

"It is a segment that everyone knows has great potential," said Tom Pirko, president of Santa Barbara consultancy Bevmark. "But it's been like a carnival. You walk down a lane and there are barkers on all sides hollering at you."

In spite of the fray, Pacoima-based Hip Hop has managed to make significant inroads. Since it was founded in 1999, the company has garnered placement for Pit Bull at Safeway, Vons, Pavilions, Food4Less and Albertsons.

With distribution in more than 40 states along with Puerto Rico, Guam and the Philippines, Pit Bull rang up $2 million in sales last year.

This summer Hip Hop will introduce its first line extension, a sugar free version of Pit Bull and this year, Ross-Thornton and Robinson are projecting sales of $5 million.

"It's a taste issue," said Ross-Thornton. "They (stores) put it out there and it sells. A lot of these (energy drinks) don't taste good, so they're kicked out and we stay."

Childhood entrepreneur

Ross-Thornton has been mixing up beverage concoctions ever since he was a kid with a lemonade stand in Brooklyn. He sold strawberry lemonade and infused Kool-Aid with peaches and other fruit flavors long before anyone ever heard of Snapple.

"As a young child, it was always my idea to invent the next soft drink," he said.

He first came out to California with the idea of developing a line of herbal teas corresponding to the signs of the zodiac, but the company was poorly financed and Ross-Thornton ended up selling his recipes.

Robinson, a former concert promoter and music producer, took the idea of an energy drink to Herb Hudson, co-owner of famed L.A. eatery Roscoe's Chicken 'n' Waffles, who agreed to finance the company, and the partners set up shop in an office borrowed rent-free from the head of the San Fernando Valley chapter of the NAACP, Rev. Zedar Broadus.

"We ran up his phone bills," said Ross-Thornton.

It took a while to refine the formula and set up sales channels, but about lout months after Hip Hop Beverage launched in 2000, the company helped sponsor the Indy 500. The cost was high--about $500,000 including the value of giveaways and other expenses--but the tactic paid off.

A contract with Safeway followed last year, and in July, the company moved to its current 8,000-square-foot facility in Pacoima.

What separates Pit Bull, the partners say, is an unwavering eye on its market niche of young urbanites.

"Our target market is the hip hop generation," said Robinson. "There is no color line. The kids in Thousand Oaks are buying it just like the kids in Compton."

Pit Bull, like most energy drinks contains a mixture of caffeine, guarana and ginseng along with other vitamins and herbs. But it is the image, not the recipe that often sells the products, many say.

Red Bull, the only player with a dominant share of the market, about 50 percent, "has terrific imagery," said John Sicher, editor and publisher of Beverage Digest, a Bedford Hills, N.Y. based trade publication. "It migrated over here (from Europe) with a certain amount of pre-existing consumer interest and they did what I call discovery marketing."

Red Bull built its marketing around being in the right places at the right times, what Sicher describes as letting consumers "discover the product and feel they own it."

Creating a buzz

Hip Hop has taken a similar route to create a buzz around its drink, The company sponsors extreme sports events like arm wrestling and slam ball tournaments. It holds tastings and it offers giveaways.

"Youth is looking for something that is not commonplace," said Ross-Thornton.

Though company officials are quick to point out that their namesake and logo, the pit bull, has been an integral part of Americana--Petey, a pit bull, co-starred in the Lil Rascals and the breed serves as the marine mascot--they also concede that the dog's present day affiliations, with tappers and the thug lifestyle doesn't hurt when it comes to attracting its target audience.

Nor does the controversy it evokes.

Ross-Thornton figures he spends 15 hours a week answering e-mails from pit bull owners and others, many of whom take offense at the company's logo.

The company has also benefited from retailers' heightened interest in the category. Unlike more mature products, which must fight for shelf space, retailers have carved out morn to test many of these new beverages, and that has presented opportunities to newcomers like Hip Hop.

Not that Hip Hop is out of the woods yet. Right now, Pepsi, with Mountain Dew Code Red, and Coke, with KMX, are still toying with the category.

"Despite the million dollar budgets," Ross-Thornton said, "'the entrepreneurial spirit which America is built on still has a shot at creating a business."