LONDON -- Even as a beverage-industry journal reports Red Bull has lost its lead in the energy-drink segment in one sensefor the first time, a new report out of London outlinedthosefactors that have driven success in the energy-drinks sector pioneered by Red Bull in 1987.
The report, “The 10 Key Factors for Success in Energy Drinks - Europe and the U.S.,” published by The Centre for Food & Health Studies, highlights areas that define success in the category, including:
· A benefit the consumer can feel
· Focus on one benefit
· Focus on one [image-nocss] brand
· Lifestyle marketing
· Packaging innovation
· Innovation in distribution
· Premium pricing
· Internationalization
· Asian innovation
The energy drinks market is one of the out-and-out success stories of the functional food revolution that began in Japan in the 1950s when a Japanese scientist launched Yakult, widely regarded as the world's first probiotic drink and functional beverage, according to the report.
The sector has benefited from widespread energy deficits and the relative ease with which selected stimulant ingredients, such as caffeine, guarana and taurine, can be incorporated into products.
Report author, Julian Mellentin, saves special praise for Red Bull, a brand that has risen to be one of the most globally recognized in little more than 20 years.
Aside from clever marketing (a singular strap-line, "Red Bull gives you wings"), branding (clear and simple), distribution (initially avoided supermarkets, which still only account for 30% of its sales) and packaging (the slim-line can), one of the key factors behind the success of Red Bull and other leading brands is the fact they do what they say on the can, namely providing an energy boost.
"Energy drinks, like all the best performing functional foods, deliver a benefit that is immediately effective and detectable," writes Mellentin. "Red Bull made the energy benefit its primary selling point."
Meanwhile, Beverage Digest reports Red Bull has fallen behind Monster as the top energy drink in terms of EQ, or absolute volume, according to report in BrandWeek. Monster now owns 27.6% of sales, compared to Red Bull's 24.6%.
"Monster has not overtaken Red Bull in sales or market share,"a Red Bull spokesperson told CSP Daily News. "They are slightly ahead in EQ because their cans are larger and this measurement is very different."
The news comes a day after Red Bull announced it will debut a line extension—Red Bull Cola—in Las Vegas in June, a reported previously in CSP Daily News.
Unlike Coca-Cola and Pepsi, Red Bull Cola will be 100% natural and command a premium price. Its formula will consist of kola nut and coca leaf.
"If, as energy-drink proponents have been saying, energy drinks are the new colas, then it's perfectly logical for Red Bull to try to reinvigorate the declining cola segment," Gerry Khermouch, editor of Beverage Business Insights, told BrandWeek.
The downward trend of cola sales, however, will present a long-term challenge to Red Bull Cola, said Beverage Digest editor John Sicher. "Red Bull is a very strong brand and it has an enthusiastic following, but the cola business in the U.S. is in decline. Even with their brand strength, they will face headwinds after some probable initial excitement."
Red Bull already faces a highly caffeinated cola competitor in Diet Pepsi Max, which Sicher described as doing "moderately" well.
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