Monday, March 30, 2009

Some Energy Drink Thoughts...

I often get questions about energy drinks, their future and who is winning. So here are some thoughts.

Red Bull - Its very interesting that they have moved away from their cartoon-based international campaign and into a US market, local personality campaign. Red Bull is a massive TV advertiser (over $50M a year) and this is a big departure for them. It signals that they believe the US market is different, and that they need to better market to their consumers here. The commercial above is both spectacular and personal, dimensionalizing "gives you wings" in a very aspirational way.

Monster - The cut over of distribution from the independent networks to CCE is still in progress, but it is interesting that there has been little innovation from the folks in Corona this year - save for their own entry into the energy shots - a segment in overkill already.

Rockstar - Another business in transition as it moves into PBG for distribution. Aside for some new sponsorships, again there has been little in the way of energy innovation. They will be hoping that a better aligned distribution system will help grow their business.

Overall the 10% growth that the category enjoyed in 2008 was higher than many expected. My feeling is that these products have become more mainstream, and will continue their growth as long as energy from communications and excitement from new ideas fuels the category. The issue may be that the momentum enjoyed by the Monster and Rockstar businesses may be mitigated within the portfolio selling selling constructs of CCE and PBG.

Maybe this is a year for Red Bull after losing share for 4 straight years. Time will tell!

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