Semtex and Kamikaze follow Red Bull charge
As in most markets, Red Bull leads the burgeoning energy drinks category in both Slovakia and the Czech Republic. But growth in the sector has attracted a number of other players. Lubomír Sedlák reports.
The energy drinks scene in the Czech Republic is more or less dominated by two major players, Red Bull of Austria and the local manufacturer Pinelli, with respectively around 45% and 40% of the market. In third place, with a 7% share, is TecFood, followed by Al-Namura and S.Spitz.
According to ACNielsen Czech Republic, between June 2004 and May 2005, a total of just under 27,470 hls of energy and isotonic beverages were sold for approximately CZK301m. Compared to the preceding twelve months, this represented growth of some 24% in terms of volume and almost 18% in value.
For Red Bull, sales have been even more dynamic. "In first half of the current year, they were almost twice as high as those of the local energy drinks market in general", said Red Bull spokesman Marek Teyssler, who declined to reveal what his company's 2004 turnover actually was.
Pinelli, based in the Central Bohemian town of Cáslav, was founded in 1993 and started off by making nectars and other fruit beverages. Two years later, it launched its first energy drink, named after the (in)famous explosive Semtex, which is to this day the company's flagship product. "Semtex is responsible for most of our sales, as far as this category goes," marketing manager Kamila Viková told SDI.
In the years that followed, Pinelli began to make other energy drinks as well, namely Erektus Guarana (for men with problems), No Delirium (for those who have drunk too much), ISO Sprint (predominantly for sportspeople) and Truck Power (for drivers). Semtex itself moreover became available in a sugar-free version and one for children called Junior.
Viková also declined to disclose Pinelli's turnover and profit figures. "Our market share regarding this type of product, however, has from year to year been steadily - even if only moderately - growing," she said.
The Prague company TecFood, meanwhile, was established in 2003, its sole energy drink, called Kamikaze, includes the ingredients vernal grass, puncture vine, hemp, prickly pear and guarana. "Our turnover last year reached approximately CZK20m," managing director Jaroslav Dostalik said, adding that "sales growth has somewhat slowed down because Red Bull slashed the price of its product."
Another Prague-based firm operating in this segment, albeit with only a minimal market share, is Al-Namura. Founded in 1992, it focused primarily on importing Mr Brown iced coffee into Czech Republic, but 11 years later, it also launched its energy drink Shock, which contains caffeine, taurine, bergamot and various vitamins. Apart from Red Bull, the other company in the top five is another Austrian group, S. Spitz, which markets the Power Horse brand.
Commenting on the overall situation as far as energy drinks in the Czech Republic are concerned, Teyssler says the local market is still behind other European countries. Per capita consumption is at present just two cans, compared with between six and as many as 13 in other western European markets, but it is growing.
In other parts of Europe, Red Bull does not have serious competitors, but in the Czech Republic, there are altogether some 10 players on the market. Teyssler does not see as a problem those energy drinks which are "sold under dumping prices" in the country's stores as private labels of retail chains. "The Czech consumer holds in esteem a brand and quality," he concluded.
What is said about energy drinks in the Czech Republic can also be said of Slovakia. It a growing market but with numerous products that don't have a 'name.' "Communication by their manufacturers with the consumers, especially in retail, moreover is solely about price, not about building a brand image or the benefits of the beverage to these consumers," Red Bull's Marek Teyssler noted.
In the Slovak Republic, the market is also dominated by Red Bull, with Czech producer Pinelli in second place. "Between 16 August and 5 December of last year, according to our research, Red Bull was drunk by 11.6% of those asked and Semtex by 5.4%," Linda Zábavíková from the Median SK agency told Soft Drinks International.
In the year to February 2005, Red Bull's sales in Slovakia reached 925,000 litres, representing year-on-year growth of 19%. "The truth is, though, that our market share during those 12 months actually fell from roughly 61% to around 58%," Teyssler conceded.
Ranking third in Median's table, with a share of 4%, is Relax, a brand produced by Czech company Walmark which at the end of 2004 sold its soft drinks division to Maspex of Poland. Another 2.9% of Median's survey participants favoured Isostar.
TecFood's Kamikaze brand was introduced to Slovak stores in June 2004, but was banned four months later by the country's State Veterinary and Food Administration which suspected it - incorrectly as it turned out - of containing tetrahydrocannabinol. The ban has subsequently been lifted. "When that ruling was issued, we were experiencing a month-on-month growth of 50% and therefore expected to sell by end of this year some 250,000 cans, worth almost CZK7m," said Jaroslav Dostalik of TecFood, adding that, according to the company's estimates, Kamikaze would be drunk by approximately 2.5% of Slovaks.
Lubomír Sedlák is Central Europe correspondent for Soft Drinks International.
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