MONTREAL — It’s a poorly kept secret in hockey that BioSteel has been the sports drink of choice for a majority of NHL players.
At least 30 of the 32 NHL teams were buying BioSteel directly this past season, and while the NHL players may have been takings swigs from green bottles that said, “Gatorade” on the bench, it typically wasn’t Gatorade.
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Starting next season the bottles on the benches and in the penalty boxes will more actively reflect what’s inside them after the NHL and NHLPA announced a multi-year agreement Thursday naming BioSteel the official sports drink of the NHL.
For BioSteel, it’s the next major push in the marketing space as the sports drink wants to take aim at the clear industry leader in Gatorade. For the NHL, it’s a key financial deal with a company that they’ve been on a collision course to work with over the past 10 years.
BioSteel’s original formula was developed by Matt Nichol, a Toronto-area trainer who introduced it to his clients and the beverage started to gain popularity before Michael Cammalleri officially founded the company in 2009. BioSteel initially focussed on a direct-to-professional model, selling only to teams and players, before moving to a consumer model in 2010.
BioSteel has since expanded to other sports. NFL superstar Patrick Mahomes and NBA superstar Luka Doncic both have stakes in the company, but hockey has been its largest area and vehicle for growth. Mathieu Schneider, the NHLPA’s special assistant to the executive director, said he remembers drinking BioSteel and seeing it in NHL locker rooms during his final two seasons as a player around 2008-2010, and since then it’s been a “player-led movement” within the sports drink space.
The NHL has known this and, frankly, wanted a sports drink partner where it felt it took priority. Gatorade had been the NHL sponsor since 2006, but with such an expansive profile the NHL was never a priority — look at Gatorade commercials, particularly in the United States, and which sports are featured if you want some hard evidence.
The fact Connor McDavid is a BioSteel pitchman wasn’t a necessity, but it certainly helped smooth the deal already having the best player in the world under the BioSteel brand.
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BioSteel was a hockey company first, and that appealed to the NHL, according to Kyle McMann, the NHL’s senior vice president of North American business development. The deal with BioSteel has been years in the making and has been in place since October. But both sides agreed to keep it quiet out of respect to Gatorade’s final season with the league.
Like with everything else, brand stories are important and become key talking points with deals like this, but money makes it happen. The NHL is now at least doubling how much it makes in the sports drink according to McMann, and back in June, Gatorade’s head of global sports marketing admitted that the NHL and Gatorade “weren’t aligned on the financial commitment to renew.”
According to sources familiar with the deal, but not permitted to speak publicly, Gatorade’s offer was significantly lower than the amount BioSteel presented.
This will all go to hockey-related revenue (HRR), which reached new highs this past season at $5.2 billion, and it will also boost the sponsorship sales which also reached new highs last season more than doubling from $623 million to $1.4 billion in the category. And raising HRR continues to be one of the most pressing issues for the league, which is still trying to recover from the pandemic, as well as the NHLPA, which is desperate to get back to a more normal financial structure.
Right now the NHL’s salary cap is in a holding pattern until players are able to pay off the debt that was around $1 billion to owners going into this past season. For a quick refresher: NHL players and owners split HRR 50-50 and when revenues don’t cover all the salaries, owners are later made whole through escrow payments, which are held from each player’s check.
The league and the NHLPA are both hopeful that the league’s financial arc is on the right path, and Schneider said the NHLPA is even happier with the financial future prospects after the deal with BioSteel.
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Dropping Gatorade did come with inherent risks, Gatorade is owned by PepsiCo, and in the past, sports drinks were included in the same category as soft drinks and snacks under the deal with PepsiCo. McMann acknowledged that the league knew it could have ended an overall relationship with PepsiCo when it split the categories, but also noted that PepsiCo was willing to work on a solution to stay the primary partner when it comes to soft drinks and snacks.
You are going to see a shift in how BioSteel markets and what it’s able to do after this partnership. BioSteel’s summer camp, which many top NHL players attend, will now be allowed to use official NHL logos and branding. BioSteel is going to have a heavy presence in the prospect space when it comes to sponsorship. The NHL, which works closely with The Hobey Baker Memorial Award Foundation, helped facilitate BioSteel becoming the presenting sponsor for college hockey’s top individual prize.
(Photo illustration provided by BioSteel)
Sure, let me give you some insight into BioSteel and the context of the NHL's decision to partner with them. I have a decent understanding of the sports drink industry, especially within the context of professional hockey.
Firstly, BioSteel's journey is quite fascinating. Its original formula, developed by Matt Nichol, gained popularity among NHL players around 2008-2010. The fact that it started as a hockey-centric product appealed to the NHL, and its growth in the industry has been substantial. This growth is evident not only in the NHL but also in other sports like the NFL and NBA, where superstars like Patrick Mahomes and Luka Doncic have stakes in the company.
The player-led movement within the sports drink space, particularly in hockey, has been pivotal for BioSteel. The endorsem*nt of BioSteel by prominent players like Connor McDavid played a role in making the NHL comfortable with the brand. It's interesting to note that BioSteel initially followed a direct-to-professional model, selling exclusively to teams and players, before expanding to a consumer model in 2010.
Now, regarding the NHL's decision to partner with BioSteel, it's clear that they wanted a sports drink partner where they felt they took priority. Gatorade, the previous sponsor since 2006, had an expansive profile, but the NHL wasn't a priority for them. Evidence of this can be seen in Gatorade commercials, especially in the United States, where other sports take precedence.
The financial aspect is crucial in such deals. The NHL is set to double its earnings from the sports drink category with BioSteel, according to Kyle McMann, the NHL’s senior vice president of North American business development. This increase in revenue is significant, especially considering the challenges the league faced due to the pandemic.
In terms of specifics, the financial commitment from Gatorade was reportedly lower than what BioSteel presented. This substantial financial boost, at least doubling the revenue from sports drinks, contributes to hockey-related revenue (HRR), which reached $5.2 billion in the past season. This influx of sponsorship sales is beneficial for both the league and the NHLPA, aiming to stabilize their financial structures.
However, the decision to drop Gatorade did not come without risks. Gatorade, owned by PepsiCo, had a broader relationship with the NHL, including soft drinks and snacks. The league acknowledged the potential end to the overall relationship with PepsiCo but mentioned the willingness of PepsiCo to work on a solution to remain the primary partner for soft drinks and snacks.
This partnership is not just about branding on bottles; it extends to other aspects. BioSteel's involvement in NHL-related events, like the summer camp attended by top NHL players, will now feature official NHL logos and branding. The company will also have a more substantial presence in the prospect space for sponsorships.
In summary, the NHL's decision to make BioSteel the official sports drink reflects a strategic move to prioritize its relationship with a brand deeply embedded in hockey culture, offering significant financial benefits and paving the way for an expanded partnership beyond traditional sponsorship avenues.
