Andy Morton

just On Call - Monster Beverage struggles to crack energy shot code

By | 28 February 2013

Monster posted its full-year results yesterday

Monster posted its full-year results yesterday

Monster Beverage is re-evaluating the energy shot category as its Worx brand continues to struggle against 5-Hour Energy, the company's CEO has said.

In a conference call with analysts yesterday (27 February), Monster chairman and CEO Rodney Sacks said sales of Worx were “substantially lower” in the fourth quarter than in the same period last year. The company's overall net sales jumped by 15% year-on-year in Q4 results, announced yesterday.

“I think we're going to continue to look at and evaluate,” Sacks said. “But we do believe there is still some opportunity that as a beverage company, we shouldn't walk away from (the energy shot category) and take it off the table.”

Sacks admitted that Worx has struggled against 5-hour Energy, which dominates the segment. “We believe there is room for a competitor, but so far nobody's been able to really crack the code,” he said.

Sacks also said Monster will discuss its share repurchase program, doubled in August last year, at a board meeting tomorrow. However he refused to speculate whether the company will introduce an additional program.

He also highlighted a number of lawsuits facing the company, but said he could not discuss them.

The US Food and Drug Administration is investigating filings over recent years where energy drinks have been cited in relation to patient deaths. Meanwhile, the family of a 14 year-old girl, who died after allegedly drinking two 24-ounce cans of Monster, last year filed a lawsuit against the company. 

Expert analysis

Energy Drinks and Energy Shots - US

This report explores the energy drinks and shots market. Energy drinks and shots continue to thrive for their functional positioning, particularly providing an energy boost. The market faces a number of issues, the biggest one focused on the possibly harmful side effects of consuming energy drinks and shots.This report addresses this and other issues and explores growth-driving opportunities.

Sectors: Company results, Soft drinks

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