Monster Beverage Corp is fast becoming the main rival for Red Bulls energy drinks crown

Monster Beverage Corp is fast becoming the main rival for Red Bull's energy drinks crown

Never far from the headlines, Monster Beverage Corp has caught Richard Corbett's eye; be it for its near-constant presence in litigation or its healthy set of Q1 numbers earlier this month.

If Justin Bieber were a soft drink he would, in my opinion, be a can of Monster Corp's namesake energy drink: Controversial, loud, very popular with the under-20s, disapproved of by their parents and often seen in court.

Both the singer and the drink have a bad-boy image, but both seem to have thrived on it to enjoy success around the world. I may not be qualified to explain the popularity of Justin Bieber, but I can perhaps attempt to suggest why the non-conformist Monster energy drink has fared so well in a highly-competitive market place and in the face of a tide of negative press. 

Monster entered the energy drink fray in 2002, some 15 years after Red Bull first featured in Austria. Its development was not just a flash in the pan and the concept, marketing and formula had been carefully put together over a period of six years. The rise of Red Bull had indeed been an important influence on the founders of Monster but, whereas Red Bull consumers were a relatively broad church, Monster was designed with a very well-defined audience in mind; young males.

Appealing to this segment of the market, where the unorthodox is the orthodox, has helped to shape the strategy and direction of the brand, and it is this precise targeting that is behind the dramatic progress it has made. It is also a formula that, in this age of the global village, seems to cross borders with ease.

Just over a year ago, drinks research agency Canadean published a consumer trends report on soft drinks that showed 85% of Monster drinkers were “early young adults”. This would indicate that the Monster message is being well received by those for whom it is intended. Achieving this has meant sponsoring and promoting a diverse range of ‘extreme’ sports that the skateboarding gamer community aspire too.

It is all about being bohemian and risky.

In Scandinavia, Monster would sponsor gaming competitions where competitors would do battle in large warehouses for hours on end, using cans of Monster to keep themselves awake. Okay, it's not exactly like sponsoring the FIFA World Cup, but it's still a shrewd medium of reaching the people you want to drink your product. This promotional strategy has, as Canadean’s survey showed, proved that Monster has been effective at reaching its target audience and that has underpinned its success.

Few companies have to mention that profits have been restricted by the “professional service costs related to regulatory matters and litigation” as Monster did earlier this year. 

These costs have racked up as the company has contested litigation and fought a number of high-profile legal battles with the authorities and even some of their own shareholders.

Despite what would normally be devastating publicity for more conventional beverages, If anything, Monster has seen its brand equity strengthen. The one thing young males hate is being told what not to do. Monster is effectively a brand that is almost immune to bad publicity and this again reinforces the fact that the brand’s fabulous growth rates are tied to successfully reaching its core drinkers.

Monster drinkers generally have a short attention span and show a willingness to experiment. Loyalty is often hard to engender and drinkers may be vulnerable to switching to the next fashionable new thing. To address this, there are as many as 34 different variants of Monster to choose from, keeping the product fresh and innovative. The names help to reinforce the identity of the brand with variants carrying off-the-wall names like ‘Rehab’, ‘Khaos’ and ‘Assault’. Only Monster can get away with calling a variant ‘rehab’.

Attracting the right age segment has been the goal, and an important part of doing this has been getting the pricing right. The age profile of the Monster consumer is far from affluent and the competitive price of the drink has been a major contributor to meeting the company's high volume ambitions. The master stroke was to put Monster in a 50cl can instead of the standard energy drink 25cl can; this gave a sense of good value and drinkers felt they were getting more bang for their buck.

Indeed, the larger can format was so popular that other brands have had to follow suit, even Red Bull, who had originally set the standard for the energy drink category with its distinctive 25cl size. The high penetration of private label products in energy drinks has illustrated just how price-sensitive the energy drink category is and Monster’s founders recognised this.

In fact. after the arrival of Red Bull, private label was one of only a few new energy drinks that showed they could at least compete to any degree with Red Bull. The energy drink category has been a mass graveyard for ‘me too’ product hoping to steal share from the Austrian sensation. None of this plethora of products has come close to rivalling Red Bull.

That was until Monster offered a very different energy drink proposition and proved that it could be done. If the Monster Beverage Corp spent less time in court, they may even get their profitability up.