What we can learn from the Ghost Energy acquisition

Hey everyone,

It’s time for another bite to chew on. 

Lots of buzz around the Keurig acquisition of Ghost Energy drink this week. 

Normally we don’t delve too much into M&A, but this deal is interesting because it has some things to teach modern consumer brands. 

Like how to differentiate, brand, and grow insanely fast…without a heavy reliance on direct response and Meta ads. 

Ghost launched in 2016, but their energy drink lineup came around in 2020. They grew to over 9 figures over that period and then sold for a 10-figure exit. 

That’s a crazy outcome. Life changing. 

Let’s dive in.  

On the Menu

• Details of the deal

• Key factors of their success

• How they did it without heavy reliance on Meta 

Details of the deal

$990 million.

That’s what KDP (Keurig Dr. Pepper) paid for 60% of Ghost Energy. 

With the remaining 40% to be negotiated in 2027. If Ghost keeps growing by triple-digit rates, that number could get much bigger. 

KPD is also committing another $250 million to get behind the Ghost brand.

No one knows exactly what valuation we’re talking about here, but some analysts are estimating around a 3X multiple of revenue. 

Usually in consumer, we see valuations based on EBITDA or net cash flow multiples, which obviously result in smaller outcomes (since EBITDA is usually 20% or less of top line). 

Of course, tech companies sell for multiples of revenue all the time, but that’s because they can (theoretically) scale infinitely and have margins of 80% or more. 

Consumer is much tougher in general, so we don’t see the revenue valuation method as often. 

Acquirers willing to pay an X of revenue are motivated or your brand has serious bargaining power. Usually both. 

Let’s take a look at the factors that led to the big exit. 

Key factors

Ghost rapidly gained market share in the big energy drink market. 

They did it by differentiating themselves with fun flavors and healthy positioning. Most of their competitors, in contrast, are filled with all sorts of unnatural junk.

✅ Big TAM / fast growth

Most estimates have the energy drink market at $75 billion globally and growing to more than $100 billion by 2030. 

An upstart brand gobbling up a whole bunch of a (very competitive) market with a massive TAM? That gets attention. 

✅ Product differentiation

No added sugars or colors, plus vitamins and supplements separate = low guilt. Ghost zigged when everyone else zagged. 

They changed energy drinks from something club kids guzzle to power their late-night adventures to something health-conscious gym rats use to help their workouts. 

✅ Brand differentiation

They have leaned into the “health conscious” user persona with a heavy focus on lifestyle positioning. Their positioning of a healthy alternative is reflected in their efforts to appeal to athletes, coaches, and health influencers.  

✅ Licensing / brand partnerships

Healthy can often = boring, but Ghost also leans into fun, tasty, and unique flavors so it’s not just about the feel-good health angle. 

They’ve partnered with established candy makers like Sour Patch Kids to create unique flavors that leverage existing consumer awareness. 

✅ Trending 📈

At Obvi we sought to make healthy collagen supplements both fun and delicious. It was the key insight that helped us gain traction and scale rapidly. 

“Candification” in the health and supplements category is now a big trend, which is why you see “gummi” versions of everything these days. 

Ghost is riding that wave. 

✅ Strategic buyer

Sometimes M&A is just about a PE firm grabbing a trending brand so they can flip it or add it to their portfolio.

But KPD is all about beverages. They own about 30 different drink brands, including stuff like 7/UP and Clamato. 

They’ve also seen their coffee business shrink a bit recently (down 4.7% in 2023), so they are probably looking for something new to help spur growth. 

How they did it (without relying on Meta)

This might be the most interesting part of the Ghost story. 

They went from no one to being bought for a billion dollars by a multinational company, and they didn’t really do it through performance marketing. 

Instead, it was mostly brand marketing + distribution. 

Ghost got serious about retail early on. They are already sold by Kroger, 7-11, Publix, and Walmart. In fact, they were on the shelves of every major chain by 2022. 

They still sell online, but remember more than 80% of all commerce is still done in person. So Ghost went to where their customers are. 

With mass distribution, their two growth levers seem to be merchandising and lifestyle brand marketing. 

Merchandising

At Obvi, we know how much packaging and merchandising matter in retail. 

Not only does your product have to stand out on the shelves, but it has to quickly and clearly communicate its unique selling points (USPs). 

You have like half a second to catch a customer’s eye and maybe another 5 seconds to sell them after that. Most folks don’t read the fine print. 

Ghost has a distinct brand look and feel, but they also nail the basics of retail packaging with clear USP callouts:

Not only is this eye-catching, but you instantly see things like “zero sugar” and the unique flavor (in partnership with a known candy brand). 

Lifestyle brand marketing 

Ghost has focused on brand marketing through major deals with major sports teams, communities, and events.

Some of their partnerships include: 

• Faze Clan (gaming)

• Insomniac (music festivals)

• Phoenix Suns

• Chicago Cubs

• Philadelphia Phillies

• Las Vegas Golden Knights

• Electric Daisy Carnival 

• XSET (eSports)

If you go to Youtube and search “Ghost Energy Drink”, you’ll find pages and pages of recommendations, reviews, taste tests, and comparison content. 

Much of it organic, but no doubt a bunch is also sponsored/influencer marketing.  

On their TikTok page, they lean into workout, fitness, and health content. On Instagram, their focus is on sports, events, and their brand merch. 

Their Twitter (X) account is actually “GhostLifestyle” rather than, say Ghost Beverage or drink.

Their tagline across social is: “Rebel against the status quo”. 

Their distinct sense of brand and positioning is consistent across their digital channels, and they are committed to getting in front of their target audience through a variety of experiential marketing tactics.

Sum it up

We know, there’s a lot of the Ghost story that can’t be easily copied or replicated. 

You’re probably not going to 4X in 48 months and then sell for a billion dollars to a major international brand. 

But what you can take from the Ghost Energy playbook is stuff like:

• Distinct product and brand differentiation

• The value of packaging and merchandising

• Ways to move beyond Meta and direct response advertising

• Factors that lead to big exits (if you’re looking to sell)

We’re not saying “ditch you are FB ads and start making deals with sports teams”, of course (we still use Meta a lot), but Ghost is a CPG case study that illustrates that there are other ways to achieve hyper-growth than just Facebook ads.  

One last thing…

Don’t forget to join Ash, Alex Song, and Caleb Madsen for our fireside chat about Meta Ads Mastery on November 5th.

We’re going to go over strategies and insights that help ambitious, high-growth DTC founders and operators take their brands to the next level.

BONUS - If you’re spending at least $50k per month on Meta, you can apply to have your account audited live during the webinar.

Click here to get your free seat.

All the best, 

Ron and Ash