By Jordan Valinsky, CNN

New York (CNN) — With beer sales flatlining, Anheuser-Busch is looking beyond hops and toward Ultimate Fighting Championship’s controversial boss Dana White to help them crack the growing energy drink category.

Launching nationwide Wednesday is Phorm Energy, the company’s newest energy drink. The non-alcoholic caffeinated beverage marks the first product stemming from Anheuser-Busch’s previously announced partnership with White aimed at expanding into the $24 billion energy drinks category.

Like similar products, Phorm Energy has zero sugar or artificial flavors, contains electrolytes and is naturally caffeinated from green tea extract. The drink comes in four varieties: grape, orange, blue, and “Screamin’ Freedom,” which is a mixture of blueberry, cherry and citrus flavors. A 16-ounce can costs $2.99.

Beer sales have been declining for the past several years, falling again more than 1% in 2024 according to Brewers Association, as drinkers shift their preferences to spirits or increasingly ditch drinking. That has forced Big Beer to search for alternatives, including expanding into spirit-based cocktails, non-alcoholic varieties and even energy drinks, with the latter forecasted to balloon into a $33 billion category in the next five years, according to research firm Mintel.

Energy drinks have been a successful gambit for rival Molson Coors, which recently purchased a majority ownership stake in Zoa, a brand co-founded by actor Dwayne “The Rock” Johnson. Zoa has repeat purchase rates of 50%, and Coors said its “ability to attract new consumers to the energy category” made it an appealing acquisition.

However, Anheuser-Busch has been less successful. In 2017, the company bought energy seltzer water brand Hiball, but sold it six years later to Tilray Brands. The cult-favorite drink was recently relaunched by its new owners.

Then in 2020, Anheuser-Busch bought a 40% stake in energy drink Ghost, which used the beer conglomerate’s distribution network. However, that came to an end last year when Keurig Dr Pepper bought Ghost in a $1 billion deal and took over its operations.

Following that, Anheuser-Busch’s wholesalers and partners “had been looking toward ‘what’s next’ in the energy drinks space,” according to Jenn Litz-Kirk, director of content for Beer Business Daily, a trade publication.

“In some ways, this new move is a no-brainer: With the imminent launch of Phorm, it seems like Anheuser-Busch is trying to recreate the Ghost formula,” she told CNN. “The energy segment is hot, and it’s a high-margin proposition for both retailers and distributors.”

Courting controversy?

The launch of Phorm Energy further entrenches Anheuser-Busch’s relationship with the controversial White.

The pair partnered in 2023 when Bud Light became the official sponsor of his mixed martial arts league following the Dylan Mulvaney debacle. A social media post from Mulvaney, a transgender influencer, promoting Bud Light sparked a massive backlash, costing the company as much as $1.4 billion in sales that year.

As for White’s involvement, Litz-Kirk said it’s “’red meat’ for a certain cohort of energy drink consumers,” pointing out that UFC is growing in popularity and that White has a massive following of 10 million on Instagram.

Anheuser-Busch’s other partner for the energy drink, 1st Phorm, is also linked to controversy. Last year, police departments in St. Louis, where the company is based, cut ties with 1st Phorm after its cofounder Andy Frisella made offensive comments about female police officers on his podcast.

Sal Frisella, 1st Phorm’s CEO and Andy’s brother, said the comments were spoken on a personal podcast that wasn’t affiliated with the company.

“We do not agree with his statements, and we do not condone the words or the context in which they were presented,” Sal said at the time. Andy no longer leads the company.

Litz-Kirk said Anheuser-Busch likely doesn’t think Andy’s comments were a “big deal” since the partnership was announced in January and there hasn’t been any blowback from wholesalers.

The-CNN-Wire
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