Former Navy SEALs selling energy drink mix in some Virginia 7-Eleven stores
By KIMBERLY PIERCEALL | The Virginian-Pilot | Published: October 26, 2017
VIRGINIA BEACH, Va. (Tribune News Service) — The counters and shelves of 7-Elevens in Virginia Beach and Chesapeake were already filled with bottled and canned promises of nearly boundless energy – usually in five-hour increments – before little packets of Strike Force Energy began showing up recently.
But if anyone can disrupt the hyper-competitive $13 billion energy drink market dominated by Red Bull and Monster, retired Navy SEAL Sean Matson and his business partners are confident their upstart can.
Selling online since January 2016, the company recently launched a trial run with 14 locations in Hampton Roads carrying its brand of liquid energy. The small packages, a little larger than a stick of lip balm, can be emptied into any beverage without stirring.
The size has been key to setting Strike Force apart and appealing to its primary customer: active-duty military.
Matson should know. He served from 2005 to 2015 and co-founded another company with fellow SEAL Zach Steinbock: Matbock, which aims to sell lighter and more efficient gear to combat fighters. Matson was well aware troops had long relied on caffeine, namely cans of Rip-It energy drinks. But the cans can be bulky and don’t necessarily keep a person hydrated, especially in parched war zones, he noted.
Plus, “try to ship a 12 pack of Red Bull to Afghanistan,” said Strike Force Energy’s founder and CEO Bruce Schlee, referring to the cost.
A box of 40 Strike Force packets, carrying 8 ounces total, would cost $39.99 and only $3.99 to ship, whether the destination was within the United States or an overseas military base, he said.
Packets are also sold in the Coast Guard Commissary and the company is in talks with the Army Exchange. In lieu of a Defense Department contract to supply the troops their energy fix, the company has been banking on soldiers, sailors, Marines and SEALs buying their own, offering subscriptions and active-duty military discounts.
The company has been selling about 200,000 packets a month, Matson said, a steep climb from where it started eight years ago in Palmetto, Fla., as flavored water.
Schlee’s uncle, a chemical engineer, was renting a building to a struggling water company when he pitched the idea of flavors. There was a hitch: Shipping water, flavored or not, was pricey. That’s when Schlee, a robotics entrepreneur helping his uncle, thought the flavored juice could instead be put in a separate packet and marketed to the military. Double Tap was born, but short-lived. The Double Cola Company sued to put a stop to it, so Schlee said he shelved it for three years.
It wasn’t until his robotics company was working on a project for a new customer, Matson’s Matbock, that the idea returned. He said Matson walked into his office for their first meeting with an energy drink in hand when, on a lark, Schlee asked if he wanted to try one of the packets with “pretty much the same formulations as it is now.”
Matson liked it and thought he could sell it to troops he knew.
Not long after, Schlee got a call: “Hey, I think I just sold $10,000 of this stuff, how quickly could I get it?”
That was November 2015. Schlee hustled to form an LLC, ordered equipment and cleared out space in his robotics warehouse to start making the packets in mass quantities.
“It’s a classic built in the garage, trial-and-error story,” he said.
Now, Schlee is CEO and Matson is president, as the company is poised to be carried in a couple of thousand 7-Elevens across the state of Florida by the first of the year. The company has also had talks with Quick Trip and Stop-n-Go, and has high hopes for a nationwide 7-Eleven roll-out. 7-Eleven declined to comment for this story.
Matson said the company is expecting sales of at least $1.8 million this year. If they were carried in each of 7-Eleven’s nearly 11,000 stores, he estimated sales of more than $40 million a year if the company sold at least 10 packets a day per store.
But that’s if it can gain attention in a flooded marketplace. A May 2017 report from the Mintel Group revealed that 18 percent of 2,000 people it surveyed were “overwhelmed" by the number of drinks promoting energy.
Energy drinks can also come with a stigma because of the health effects of drinking too many. Schlee likened his to a medium cup of coffee with a hit of B vitamins without much of the unpronounceable ingredients in other energy drinks. So what does it have? Niacin (vitamin B3), vitamin B6 and B12, potassium citrate, sucralose, taurine, sodium benzoate, malic acid and citric acid.
Strike Force’s sugar-free, zero-calorie packets in original, grape, orange and lemon flavors retail for $1.19 each and have less than a quarter ounce of clear liquid that can be added to any beverage to give it 160 milligrams of caffeine. According to the Center for Science in the Public Interest, a tall cup of Starbucks coffee Pike Place Roast can contain 235 milligrams in 12 ounces, 5 Hour energy has 200 milligrams in 2 ounces, and Red Bull has 80 milligrams in 8 ounces.
On a recent morning, Matson drove a loop of 7-Elevens in Virginia Beach in his Strike Force pickup truck featuring the company’s hashtag slogan #kickthecan printed on the side, checking supplies on the counters of participating franchises.
At one stop, the driver of a red Mustang pulled up and yelled, “Were you on Shark Tank?” referring to the reality show. Matson wasn’t – another energy shot maker had been – but the driver still seemed interested in the energy mixer, noting the 7-Eleven was part of his morning routine.
Strike Force was on Fox & Friends, though, an appearance Matson credited with giving the company an immediate 20 percent sales boost on the day the episode aired in December 2016, keeping more than half of the new customers as repeat buyers. The company has been spreading the word via sponsorships of indoor skydiving athletes, an MMA fighter and a few bikini fitness models.
Seizing on the popular presidential slogan, it plans to market one of its most popular flavors with the advertisement: Make America Grape Again.