Arnold Palmer Finally Making Big Money Off His Drink
CNBC Sports Business Reporter
Ten years ago, Mark Dowey and his two friends in the dairy business were sitting in a country club dining room when one of them ordered an Arnold Palmer, the half lemonade, half iced tea drink combination made famous by the golfing legend.
Up untl that point, Palmer — whose connection to the drink goes back to the late 1960's when he was reportedly overheard ordering the drink in a restaurant — had not capitalized on it. Knowing this, the three decided it would make sense to draw up a business plan — on a napkin of course — and present it to Palmer's agents at IMG.
IMG soon granted the rights for Arnold Palmer tea to Dowey's company, Innovative Flavors, who would search for the perfect partner to make the product.
As part of the process, the business team surrounding the now 80-year-old golfer trademarked his name associated with the product.
They found that partner in AriZona Beverage Company and the rest is history.
The Arnold Palmer Light Half & Half was born.
The product has been on the market for 10 years and Dowey says that the business has doubled every year.
This year, the brand is on pace to hit $100 million in sales, Dowey said. Roughly half that business is done in food, drug and chain stores, while the rest is done in mom and pop stores across the country.
The Palmer beverage represents 10 percent of AriZona's total business, but 40 percent of its growth, Dowey said.
That growth has led to bottles of almost every size, from the most popular 20-ounce version to the biggest 64-ounce. There's even a 10-ounce bottle for kids, an attempt to go up against carbonated beverages in schools.
Last year, Innovative licensed a powdered tea stix version, a five calorie mix that can be put into a bottle of water. Those stix, Dowey says, has outsold almost every competitor in the space.
And the next market to be conquered is the restaurant area, where Dowey says that when people order an Arnold Palmer they soon will be able to get the real one.
"Anywhere in the world, you can order an Arnold Palmer and they'll know that it's a lemonade and iced tea," Dowey said. "It's amazing how he has not only transcended time, but transcended generations. We've seen Kids who were born after he finished playing talk about the drink on Facebook and on blogs."
Palmer was the first client that ushered in the modern day sports agency business, and for that matter the modern day endorsement model, when IMG founder Mark McCormack signed him as his first client in 1960.
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