Monster has seen initial success in Japan, according to analysts

Monster has seen initial success in Japan, according to analysts

Monster's entry into the Japanese market has seen initial success, but competition in the country's energy drinks sector remains “fierce”, according to an analyst.

In a note to clients yesterday (29 January), CLSA analyst Caroline Levy said that Asahi, Monster's Japan distributor, is “pleased with its initial success in the market”. Retailer 7-11 is also happy with the high price point of the California firm's products, added Levy, who recently conducted a “market tour” of Japan and the US.

Overall, she noted that Monster has “impressive distribution” in Japan, where it launched in last year's second quarter.

However, she flagged that consumers have many options in the market, with a host of local and Western brands such as Red Bull, Rockstar and Burn. “Monster’s cans do stand out on the shelf, but consumers are clearly spoilt for choice in Japan,” the note added. 

On Monster's US performance, Levy predicted “tough comparisons and a maturing category to drive decelerating growth”. She added: “We believe higher costs outside the US remain a structural issue for margins.” 

In November, Monster reported a slowdown in nine-month net profits. The company came under the media spotlight last year after facing a lawsuit and a US Food and Drug Administration investigation into energy drinks that had been linked to the death of consumers.