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With New Endorsement Deal, Armstrong Continues To Take Different Path

Wednesday, 28 Apr 2010 | 9:41 AM ET
Lance Armstrong
Joel Saget | AFP | Getty Images
Lance Armstrong

Lance Armstrong's life has been defined by his against all odds cancer battle and his seven consecutive Tour De France wins that boosted his profile not only as one of the greatest athletes of all time, but as the most identifiable person in the world in cancer's fight, both symbolically and financially.

But in the twilight of his career, Armstrong has forged another unique path by lending his name and image to smaller companies in exchange for a piece of the action. In 2007, he became chief spokesman for FRS Energy, a small company that makes caffeine-free energy drinks and chews. With Armstrong's help, company sales have grown five-fold since he came aboard, the brand is now in more than 20,000 outlets nationwide and recently raised $23 million in funding. Today, Armstrong says the next company he will put his golden hands on is Honey Stinger, an 8-year-old small natural foods company based in Steamboat Springs, Colo., that makes honey-based energy gels, bars and chews.

The former Powerbar spokesman says he doesn't mind if all the marketing textbooks in the world recommend that athletes like him stick with high-profile, blue-chip brands.

"I don't care if they say in business school never do anything less than IBM," said Armstrong, who, together with Nike , have sold 70 million Livestrong bands since 2004. "I'm at a point in my life where I don't need anything professionally, financially or personally. I'd rather be with businesses who have products I believe in, and just as importantly, people I believe in behind them."

As part-owner of these companies, the money-making potential is greater if the brand succeeds, but for Armstrong, going with the little guy also fuels his competitive fire. Honey Stinger has eight full-time employees.

"It's a growth story and it's a competitive story," Armstrong said. "I like the product and I don't see any reason why Honey Stinger can't significantly grow. It's not the same kind of drive as when I'm on the bike, where I sometimes can't stand the guys I'm going up against. I have respect for the people at Powerbar and Clif Bar, but I think there's big potential here."

Source: Honeystinger.com

Honey Stinger was launched by Bill Gamber, an entrepreneur and athlete, in 2002, as a natural extension to his family's business. His grandfather founded Dutch Gold Honey and invented that familiar plastic honey bear design in 1957. Honey Stinger came into being during a period of time where making nutritional bars were so hot that more than 1,000 new bars launched in the US within two years of its founding. By sticking to its niche and growing small, mainly in bike and sporting goods retailers like REI, Gamber says the brand has grown every year. It's a still a hard business, as evidenced by Kraft giving up its biggest stake in the industry, Balance Bar, in November by selling it to a private equity firm after a nine-year run.

"Lance joining our brand is obviously a huge boost," Gamber said. "We're a small company that now has the opportunity, thanks to this partnership, to tell the world about our product."

Gamber said Honey Stinger will further grow the brand using Armstrong — was introduced the product when he met the company's marketing director during a mountain bike race two years ago — mostly in grassroots campaigns and on some packaging.

"It's not like we're going to be writing big checks and putting Lance on billboards everywhere or even put our brand on his jersey," Gamber said.

Armstrong, who at 38 came out of retirement to finish third in last year's Tour De France, is still one of the world's most influential endorsers. He still ranks in the top 50 out of more than 2,500 celebrities in the Davie-Brown Index, a poll that measures various degrees of popularity.

In 2007, Nike and Armstrong launched the LIVESTRONG collection, a line of shoes and apparel that would donate all its profits to the Armstrong Foundation. Since then, the line — sold most aggressively at Dick's Sporting Goods — has outpaced expectations. And, earlier this year, Nike announced that it would expand the line internationally in July to coincide with the Tour De France.

In fact, there's an argument to be made that Armstrong is more relevant now than ever, thanks to his role in the social media world. The cyclist is the 19th most followed person on Twitter, according to wefollow.com. He is one of two athletes, along with Shaquille O'Neal, that has more than two million followers. In fact, more people follow Armstrong — whose most popular tweets usually include when the drug testers randomly show up at his house — than the New York Times and Google .

The contract with Honey Stinger is as intricate as you'd expect with an athlete on par with Armstrong, but one of the things it doesn't include is any promise to use his Twitter influence.

"A lot of people who have wanted to get involved with us, have wanted to put Twitter promises in the deals," said Mark Higgins of Capital Sports & Entertainment, which manages Armstrong. "That's just not going to happen."

Why? Because Armstrong believes that doing too much of that will ruin his profile in the social media world.

"There's a delicate dance that I've witnessed," Armstrong said. "When I've occasionally tweeted about FRS or even Nike, I have people telling me that I'm pushing it down their throat or that I'm selling them stuff and I totally understand that. You've got to be authentic."

By willing to put his name behind the little guy, it's pretty hard to argue that Armstrong isn't authentic. Even still, he seems to be fighting that battle now more than ever, perhaps because the world in general is more skeptical of endorsements by athletes.

Last October, Armstrong was criticized by many for signing a three-year deal with Michelob Ultra . Some said that signing a beer endorsement didn't really fit his profile.

Said Armstrong: "People think I'm like a vegan who wouldn't touch a beer. I drink beer all the time. I probably have at least a sip of alcohol every day."

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