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Slide 1: Michele Simon, JD, MPH James Mosher, JD Marin Institute Pacific Institute for Research and Evaluation

Slide 2: FORMULA FOR GETTING KIDS HOOKED START WITH SUGARY SOFT DRINKS ↓ ADD CAFFIENE ENERGY DRINKS ↓ ADD ALCOHOL ALCOHOLIC ENERGY DRINKS

Slide 3: Three-point-plan for targeting youth 1) create brand confusion with nonalcoholic versions 2) provide a cheap alternative to mixing energy drinks with alcohol 3) deploy youth-friendly grassroots and viral marketing

Slide 4: Exploding Popularity of Energy Drinks • 500 new energy drink products introduced worldwide in 2006 • Energy drink sales = $3.2 billion • 31 percent of 12- to 17-year-olds are regular consumers v. 22 percent of 25- to 34-year-olds -- Mintel Group

Slide 5: The Energy Drink Market: Youth Driven • One in three teens are likely to use energy drinks compared to one in ten adults. • Youth consumption is rapidly increasing. • Energy drinks help teens augment their rebellious image—legally.

Slide 6: Youth/Adult Energy Drink Consumers 35% 30% 25% 20% Youth (12-17) 15% Adults (18+) 10% 5% 0% Regular Heavy Users Users (10+/month)

Slide 7: Brand Confusion Which Contain Alcohol?

Slide 8: Brand Confusion Which Contain Alcohol?

Slide 9: Rockstar Brand Confusion “This new line of alcoholic beverage product is extremely similar in look and feel to the popular energy drinks that contain no alcohol. Our youth are at risk when clerks and retailers cannot differentiate between nonalcoholic and alcoholic beverages -- Chris Lilly, Kentucky Alcoholic Beverage Control (May 2007) being sold.”

Slide 10: Only non-alcoholic brands have nutrition facts and ingredients listed

Slide 11: Who Owns These Brands? Miller Anheuser-Busch Brewing Company

Slide 12: Who distributes this drink? Who makes this drink? Anheuser-Busch

Slide 13: Why does it matter? “Growth in the popularity of energy drinks can be attributed to bars and clubs, where energy drinks have been used as mixers. Now consumers can find pre-mixed alcoholic energy drinks at a nearby convenience store or grocery store.” -- Mintel Group

Slide 14: Public Health Implications • Marketing and product design promotes youth consumption • Alcohol + Caffeine = “Wide awake drunk” • Caffeine masks alcohol’s intoxicating effects, promotes risk taking • Youth most likely to take risks

Slide 15: Alcohol Brands Cost Less

Slide 16: Make Premixed Products Cheaper “But at $1.50 per 16-ounce can, about 60 cents cheaper than an 8.3-ounce can of Red Bull, it packs the triple-buzz punch of alcohol, taurine, and caffeine for a much lower price than a Red Bull and vodka -– which can cost anywhere between four and eight bucks, depending on the bar.” -- Boston Phoenix on Sparks

Slide 17: Rolling Stone Promotion

Slide 18: Viral Marketing “We spent a significant amount of budget on Internet-related activities. We invited consumers to comment on the Web site and post comments without editing them, creating a community of Sparks users who shared ideas and experiences.” - Minott Wessinger, inventor of Sparks

Slide 19: Viral Marketing – Sparks Website

Slide 20: Sparks on MySpace Sparks Pals Chat Group “we all know that sparks is the ..1 alcohol + energy hybrid drink of all time, now we have a group to share this knowledge. about time!”

Slide 21: Sparks on Facebook Chat Groups • Drink Sparks Die Young • Sparks Addicts Anonymous • Sparks baby! • I drink Sparks every day of my life • Sparks energizes Bermuda

Slide 22: Viral Marketing – Facebook Postings by High Schoolers “im only 18 and i had a six pack of sparks in my room and my mom found it, but she had no idea and thought they were jus energy drinks.” “Sparks plus any night.. or day.... classic is what i first tried on like prom night or something like it and i was hooked then plus came around and it was love at first sip.” “i dont remember what life was life before sparks but now i really cant remember with it.”

Slide 23: Alcoholic Energy Drink Marketing Strategies Themes popular with youth: •Risk taking and rebellion •More energy, more partying •Sexual success •Extreme sports

Slide 24: Sex Always Sells Liquid Charge Girls www.liquidcharge.com

Slide 26: Party All Night Sex – AGWA www.agwabuzz.com

Slide 27: Anheuser-Busch Flouting the Law? IF FEDERAL LAW DOES NOT ALLOW… “advertising statements that imply … a stimulating or energizing effect” – Tax and Trade Bureau

Slide 28: WHY DOES ANHEUSER-BUSCH PROMOTE BUD EXTRA WITH….

Slide 29: Letter to Anheuser Busch from 29 State Attorneys General “Given the documented health and safety risks of consuming alcohol in combination with caffeine or other stimulants, Anheuser- Busch’s decision to introduce and promote [Spykes] is extremely troubling.”

Slide 30: Letter to Anheuser Busch from 29 State Attorneys General “Promoting alcoholic beverages through the use of ingredients, packaging features, logos and marketing messages that mimic those of nonalcoholic refreshments overtly capitalizes on the youth marketing that already exists for drinks that may be legally purchased by underage consumers.” Anheuser Busch pulled Spykes from the market shortly after receiving this letter.

Slide 31: Recommendations Communities need to aggressively seek both voluntary action by the alcohol industry and government action at all levels to protect our young people from harm.

Slide 32: To the Alcohol Industry… • Tell the producers of nonalcoholic energy drinks to halt promotions that encourage mixing their products with alcohol. • Tell alcoholic beverage producers to discontinue production of alcoholic energy drinks. • Demand full disclosure of ingredients in all alcoholic energy drinks, the amounts of additives contained in the drinks, and the percentage of alcohol from distilled spirits.

Slide 33: To the Government… • Ask the Federal Trade Commission and your State Attorney General to investigate whether marketing practices associated with alcoholic energy drinks constitute unfair business practices or deceptive advertising claims. • Write your state and local representatives and encourage them to ban or strictly limit the availability of alcoholic energy drinks. • Encourage local government officials to ban the mixing of alcohol with energy drinks in bars.

Slide 34: Download full report: www.marininstitute.org Order print copies or questions: Michele Simon, JD, MPH Research and Policy Director micheles@marininstitute.org (415) 257-2485