Status Symbol Beverages

Gary Vaynerchuk discusses how Prime (by Logan Paul and KSI) represents a new model of beverage company that sells based on cultural status rather than traditional beverage metrics, similar to how Supreme works in fashion.

Key Points:

• Business Model:

  • Sells primarily on cultural cachet and status symbol value
  • Target market buys "literally to drink it for the status symbol"
  • More aligned with fashion brand dynamics than traditional beverage metrics

• Market Position:

  • Currently doing $2 billion in sales
  • Potential valuation ranges from $2-7 billion
  • Limited window of opportunity due to status-based model

• Key Challenges:

  • Sustainability concerns due to reliance on "cool factor"
  • Time-limited opportunity window like fashion trends
  • Need to consider exit timing before market saturation

• Exit Strategy Considerations:

  • Potential acquisition by major beverage companies (e.g., Coca-Cola)
  • Could sell for $5-6 billion range
  • Founders could exit and start new ventures in different categories (e.g., shampoo, deodorant)

• Risk Factors:

  • One bad year can significantly impact negotiating leverage
  • Market saturation in distribution
  • Cool factor sustainability ("that can only last so long")