just On Call - Sugar fears push Monster Beverage to lower calorie options
Monster said it is reformulating its juice lines
The CEO of Monster Beverage Corp has said its new Ultra Sunrise will help capture trends for “lighter” energy drinks as health fears over sugar seep into the category.
In a call with analysts, following the release of first-half results yesterday, Rodney Sacks said the no-calorie Ultra extension, is part of Monster's attempts to introduce products that are “more drinkable... lighter in calories and lighter in taste”. Sacks also said the company is reformulating its juice brands to fit this profile.
Explaining the change, the CEO said: “We think there have been some health concerns about CSDs, that have now translated into the dark CSDs, because of some scares about sweetness. We think this will pass, and I think things will settle down, but there are certainly some changing consumer trends and preferences.”
He added that Monster would not give up on its full-sugar offerings as “there are a majority of consumers that still like full-flavoured, heavy-bodied drinks, just as they like light wines, and they like heavy wines".
Meanwhile, Sacks denied Ultra Sunrise was Monster's move into the CSD category, or that it will compete against PepsiCo's Mountain Dew Kickstart.
“This product has got nothing to do with CSDs,” he said. “It's got nothing to do with Mountain Dew. This product is going to be merchandised in the energy door with the other Ultra products.”
Wells Fargo analyst Bonnie Herzog on Wednesday said in a note that Ultra Sunrise may go up against Kickstart in the “breakfast” beverage category and would help Monster attract new consumers in different consumption occasions.
Sacks yesterday also listed Nielsen figures for the 13 weeks to July 26 that showed Monster sales in the US increased by 9% against an industry average of 5.3%. In the same period, Red Bull sales increased by 4% while Rockstar's stayed flat. AMP sales fell by 11% and 5-Hour Energy by 2.5%.
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