Monster wants to control its own international supplies

Monster wants to control its own international supplies

Monster Beverage Corp is to start full production in South Africa before the end of this year as it ups its focus on local supply in international markets.

CEO Rodney Sacks said a problem sourcing 50cl cans in South Africa means full production in the country will be delayed until “towards the end of the year”. However, Monster will import cans to its South Africa site, allowing part production by the middle of this year.

The energy drinks maker is also still looking to manufacture its brands in India and Japan in a bid to improve profitability, the company's CEO said. 

In November, Monster said it was on course to start production of its energy drinks in Japan “within the next few months” while in August Sacks said plans to start production in India were “progressing satisfactorily”.

“As we increase volumes we are continuing to introduce local production,” Monster CEO Rodney Sacks told analysts in a business update last week. “That is becoming higher on our agenda and is very important.”

Sacks said a problem sourcing 50cl cans in South Africa means full production in the country will be delayed until “towards the end of the year”. However, Monster will import cans to its South Africa site, allowing part production by the middle of this year.

“We can use the site as a springboard to export to the Mauritius and other nearby markets,” Sacks added.

The company already controls its own production in some regions, including Brazil.

Sacks said the company is expecting strong international sales when it releases full-year results next month. US sales for the final quarter of the year have also been good, the CEO said. Citing Nielsen figures, Sacks said sales have been accelerating since September, with Monster securing a 16% increase in US market share in the 13 weeks to 28 December.

Sacks said that in contrast, rival brands such as 5-Hour Energy and Rockstar have been “treading water and not making any real progress”.

An analyst who attended Monster's business update last week said the firm has a “substantial runway for international growth”.