Digiday+ Research: For startup CPG brands, in-person brand activations bring much-needed exposure

For young CPG brands, year-round investment into standalone pop-up events isn’t feasible. Although the majority of CPG startups included in Digiday’s sample invested in a pop-up event last year, the capital and resources required to continuously host these events throughout the year are just out of reach for the growing marketing budgets of these startups. Instead, these new brands are showing up at large events as sponsors or investing in exclusive parties for brand partners and influencers, rather than hosting multi-day pop-up activations for the public.

In fact, over a 12-month period, these startups sponsored more large ticketed events like music festivals, expos and professional sporting events — and hosted more private invite-only brand parties — than they held standalone pop-ups for the public.

Digiday’s research found that more startup brands are planning to invest in large ticketed events over public pop-ups this fall. In Digiday+ Research’s survey of 60 brands, 64% of respondents said they had plans to invest in events for the fall. One-third of respondents (33%) said the same of pop-ups.

For brands like electrolyte drink mix brand Liquid I.V. that have entered grocery, drugstore, convenience and club stores in the past few years, sponsoring events and meeting potential customers at these large venues is a key part of their long-term strategies to gain wider retailer distribution.

“Partnerships and events, influencer marketing, these were really critical cornerstones of the marketing DNA, even before retailer doors were available,” said Stacey Andrade-Wells, CMO at Liquid I.V. “That allowed us to generate awareness and consumer demand, such that when we showed up in [retailer] doors, we weren’t having issues with velocity or meeting retailer red lines. We had that brand love already built up ahead of time.”

In this report, Digiday takes a look at how digital startups like Liquid I.V., energy drink brand Lucky Energy and olive oil brand Graza are building up brand love with in-real-life event activations to better position themselves for retail expansion.

Digiday+ Research analyzed the event sponsorships, brand parties and ambassador programs that 21 CPG startup brands hosted during the time period July 1, 2023-Aug. 1, 2024. The brands were chosen by the editorial team based on past coverage and Digiday’s industry analysis of scaling startups.

We also conducted a focus group with executives from Liquid I.V., Lucky Energy and Graza to learn first-hand about the activation strategies these startups are using to grow brand awareness and increase product distribution.

Large ticketed events like music festivals, expos and major sports competitions attract thousands of visitors to one central area or venue. Small startup brands with limited reach can present their products and interact with consumers at these events in the hopes of gaining much-needed brand exposure. The heavy foot traffic at venues and word-of-mouth buzz created during these events are expensive for a small brand to otherwise replicate. Additionally, brands that sponsor events are able to set up a booth or a pop-up within the event. Therefore, many startups take advantage of event sponsorships to place product samples and promotions in front of large audiences of potential customers.

However, brands must carefully select the events they choose to sponsor. In order to achieve a successful brand activation, the audience and the event must align with a brand’s ethos. Liquid I.V.’s Andrade-Wells said her brand focuses on one key question: “Where is the intersection of that cultural phenomenon with a moment that makes sense for our brand and for our product?”

For Liquid I.V., the perfect intersection exists at music and arts festivals like Coachella, Bonnaroo and Outside Lands, where the brand can showcase its electrolyte products in a setting where attendees might naturally be eager to consume liquid products. Aside from hosting traditional pop-up booths on the festivals’ grounds, Liquid I.V. has set up branded “hydration stations” at these events where attendees could refill reusable water bottles, as well as on-stage promotions with performing artists.

“It’s the perfect opportunity to reach people in a specific moment where they’re going to have a need for that product, and be able to offer them something that’s a science-backed solution,” Andrade-Wells said. “It’s going to deliver hydration that they can experience in real time.”

Liquid I.V. has also turned its attention to large sports events in the past 12 months, kicking off a two-year partnership with Formula One and Crypto.com in March. “Formula One is in the cultural zeitgeist. It’s the intersection of sports, hospitality and entertainment,” Andrade-Wells explained. “Combined with the fact that Formula One drivers are losing eight to 10 pounds of water weight every single race because of the heat inside the vehicle and outside, it is the perfect intersection to build some brand equity and reach fans with a perfect hydration solution.”

As a digitally-native brand, it’s important for Liquid I.V. to find moments to connect real-life experiences with digital activations — whether that’s ensuring content created at an event is used for digital marketing or connecting the event back to the direct-to-consumer business. Additionally, as Liquid I.V. has been added to more retail shelves, these event experiences help the brand connect with its expanding in-person audience, while maintaining its digital roots.

“When you are a digitally savvy brand, use that in-real-life moment as a way to bring your digital community along the journey and have that tie-back to your DTC business,” Andrade-Wells said. “We will never do an event or an activation if we cannot also have content creation on site. We need our influencer marketing team to be ready to bring influencers to the event and generate content there. Our social team is creating custom content on site. And sometimes we have paid assets that our creative team will generate for that event to help amplify it on social media.”

Liquid I.V. also gathers demographic information from potential new customers at the large events it sponsors. At the 2022 Miami Grand Prix, Liquid I.V. hosted a racing simulator for visitors. This simulator served two purposes: first, to provide an unforgettable experience to the visitor, and second, to collect emails and phone numbers of participants.

“We were able to generate over 2,500 leads just by virtue of having that footprint, and that becomes part of our retention marketing and the revenue that we drive on our DTC business,” Andrade-Wells explained.

Lucky Energy and Graza are taking creative steps to show up in unexpected moments at venues and events. Both brands face marketing challenges, but for different reasons. In Lucky Energy’s case, the energy drink market is oversaturated, so a primary challenge for the brand is to differentiate itself from the competition. Meanwhile, olive oil is used to prepare foods but is rarely served on its own, therefore Graza needs a food pairing setting or partner for its activations.

“When you’re a new energy drink brand in a category that’s so saturated, and it’s also very monolithic, the placement is one [factor]. But the way you get into the creative experience is the thing that takes it to another level,” said Hamid Saify, CMO of Lucky Energy. “If you were to put into Chat GPT — ‘give me a typical energy drink ad’ — we want to do the exact opposite of that.”

Although Lucky Energy was not an official sponsor of the 2024 Coachella Valley Music and Arts Festival, the brand creatively integrated itself into the event during the festival’s two weekends. Lucky Energy bought two massive billboards on the roads leading to the Coachella Valley with the tagline, “Call for a quick fuck,” and a phone number to call. Playing on the cheeky innuendo, when someone called the number they were answered by a phone operator who said, “Let’s link up at Coachella.” Lucky Energy brand ambassadors were then stationed throughout the Coachella Valley to hand out packages of free products to those attendees who called or texted the number.

For olive oil startup Graza, the brand’s product is not easy to present for sampling by itself and must be partnered with another food vendor or brand partner. Therefore, the type of event and usage occasion limits the IRL activations the brand can participate in. In a recent activation, Graza partnered with ice cream brand Talenti to present at the U.S. Open from an ice cream truck. This marked the first time Graza tested its own experiential concept at a major sporting event in partnership with another brand. According to Kali Shulklapper, director of marketing at Graza, the brand’s focus for now is “integrating our product into what other food vendors are doing at these festivals and events.”

“What we have done, and will continue to do, is provide olive oil to various vendors at food festivals, and big food-focused events, sometimes at concerts,” Shulklapper said. “We’ve worked with ice cream vendors at Outside Lands [Music Festival] and Coachella to make custom menu items like a scoop of vanilla ice cream paired with a drizzle of Graza olive oil.”

“We’re a small, scrappy team. We haven’t invested in the resources yet to have a true field marketing or experiential team,” Shulklapper added. “We’re just really focused on an IRL extension that’s tied to an upcoming product launch or big brand moment. We’re going to pursue that, and if it works out great, we’re going to do that.”

To encourage influencers and VIP brand ambassadors to partner with their brands, some CPG startups host exclusive, invitation-only parties during which guests can learn more about a brand’s image and products. For many years, the beauty community has used this tactic to celebrate the launch of new products, for example, and more food and beverage startups are taking a similar approach to experiential marketing.

“A lot of the experiential activations that we’ve done to date have been somewhat limited and focused around product launches or tentpole brand moments,” Graza’s Shulklapper said. “It’s something that we’ve started to dip our toes into and are figuring out what our future investment is going to look like.”

Although these parties and other similar events require substantial financial investments from brands, a brand party held for one day or evening can be less burdensome than a pop-up held for multiple days or weeks. In Digiday’s analysis of CPG startups, 14 out of the 21 brands analyzed hosted an exclusive brand party or invitation-only event for influencers and special guests. And in most cases, these brand parties were held in conjunction with a new product launch or brand collaboration rather than as standalone events.

Austrian beverage brand Waterdrop hosted two exclusive parties in collaboration with health and wellness companies Wellness Wonderland and HiVibe Wellness in Miami this year. The first party, hosted in conjunction with Wellness Wonderland during Miami Art Week, invited influencers, wellness gurus, professional athletes and celebrities to a $30 million mansion for a one-day retreat that featured workouts, musical performances, ice baths and partying. The second event, hosted in conjunction with HiVibe Wellness, was a luxe pool party held during Miami Swim Week, an annual swimwear and resort wear fashion event where celebrities, influencers and other VIPs were already in attendance.  

Miami Art Week and Swim Week attract a flurry of designers, celebrities and influencers from around the world. For Austria-based Waterdrop, it made sense to collaborate with U.S. wellness companies like Wellness Wonderland and HiVibe to help the brand build its American market base.

In Digiday’s sample of CPG startups, 16 of the 21 brands have developed ambassador programs for professional athletes or college students. Through the programs, those who serve as brand ambassadors have the inside track to popular sports teams or college campuses and offer micro-influencing abilities to their brand partners. In Digiday’s study, 64% of beverage startups have established athlete sponsorship programs and 45% have set up college ambassador programs.

“The power of word of mouth that is generated when someone has received your product and tried it, and they’re going to go tell a friend about it, or they’ve been to an event or an activation, and they’ve experienced what your brand is really about — how it looks, how it feels, how it talks, how brand ambassadors portray your brand — it’s such a rich consumer experience,” Liquid I.V.’s Andrade-Wells said. “That conversion rate is a lot stronger, and the likelihood of that then affecting subsequent purchases for other people is so powerful. That’s why a lot of emerging brands are relying on this space early on, to generate that grassroots word of mouth versus a paid advertisement.”

Comparatively, a smaller percentage of food startups have invested in ambassador programs, Digiday’s analysis found. This could be due in part to the fact that beverage products lend themselves better to sampling than food products, or that sports events typically align better with beverage usage occasions.

Still, some food brands are finding opportunities to use brand ambassadors. During the 2024 Olympic Games, Mexican-American food brand Siete Foods hosted “Local Legends” watch parties for the U.S. Soccer Women’s National Team to celebrate athletes Jenna Nighswonger and Naomi Girma. The parties were Siete Food’s way of celebrating the local communities that helped support the athletes.

Siete Foods’ marketing tactics even caught the attention of snack and beverage giant PepsiCo — PepsiCo bought the brand in a $1.2 billion deal.

In another example, last year, pickle brand Grillo’s Pickles started Grillo’s Pickles University, which encourages student ambassadors to spread the word about the brand on their college campuses. Those accepted into the ambassador program were sent packages full of Grillo’s merchandise to hand out to their peers, and the packages included sweatshirts, baseball caps, drink koozies, water bottles and coupons.

College ambassador programs are attractive to CPG startup brands because they allow the brands to start building loyalty and awareness among future members of the workforce before they have even completed school. By 2030, Gen Z will make up 30% of the workforce, as Baby Boomers move further into retirement.

This is the first year Lucky Energy will have a presence college campuses and the brand is weighing how best to attract student consumers during key moments like football tailgates and finals week. “How do we power people to give them the energy that they need [the first week back]? How do we make them laugh? How do we entertain them throughout our experience on campus?” Saify said. “We will power a couple of tailgates at some of the top 25 football programs in the country. As we get into finals week, we’ll have an opportunity to get out there and get products into the hands of people.”

Meanwhile, Liquid I.V. has built a large network of student ambassadors across major universities including Virginia Tech, the University of Mississippi, Gonzaga University and the University of South Carolina. During Liquid I.V.’s campus tours, these student ambassadors help the brand connect with the student body in unique ways. For example, when visiting Mississippi State University, Liquid I.V. enlisted the help of Mississippi State track and field star Sherman Hawkins Jr. to interview students at a football tailgate and ask them about their favorite flavor of Liquid I.V. At the University of South Carolina, the brand enlisted USC women’s soccer team members Hallie Meadows and Brianna Behm to interview students.

• Lucky Energy isn’t hitting the brakes on in-person brand activations any time soon. In fact, the brand’s new field marketing team will be placing an even greater emphasis on IRL events next year.
  • “We’re definitely increasing our investment because we’re new, so we’re starting from a place of zero. Next year, we’re planning out an entire calendar’s worth of events that we’re going to be at. One of the first hires that I made is a director of field marketing who came over from [protein bar brand] RXBAR. So, we’re definitely dialing up the event calendar for next year.” — Hamid Saify, CMO of Lucky Energy
• Graza is still looking for the best fit for its event activations.
  • “For us it’s a test-and-go strategy. I think we’ll keep investing in different one-off ways, see what works for us and what doesn’t, and take it activation by activation,” — Kali Shulklapper, director of marketing at Graza
• Liquid I.V. hosted successful festival and IRL event experiences in 2023, which it carried over into 2024. The brand plans to double down on that approach in 2025.
  • “We launched our field marketing team this year, our two-year partnership with F1 Miami and our college ambassador program. For us, 2024 has been a signature moment for us to drive a stake in the ground and say, ‘Yes, we’ve learned a lot in the last couple of years. This is worth continuing to invest in. Let’s double down in 2024 and find how to run some of the infrastructure of these core programs.’ I fully expect in 2025 we’re going to continue to scale these things out so it will absolutely keep being a critical part of our total marketing mix at the brand.” — Stacey Andrade-Wells, CMO of Liquid I.V.