Monster Beverage CEO Rodney Sacks has hit back at suggestions the firm doesn’t have any big 2014 launches and believes a new Punch Monster line could fly given broad consumer appeal.
The firm is branching out beyond its core energy territory to snare older consumers, as well as more women, and significant recent successes in this respect include its zero-calorie Ultra line.
But during a Q&A session following Monster Beverage Corporation’s business update on January 7, an audience member tackled CEO Rodney Sacks on the hot button issue of NPD in 2014.
“There’s no Ultra, there’s no Rehab, there’s no real big launch. And I’m just wondering if that’s part of the plan? Do you want to focus more on the core three or four legs of the stool, or are you still looking to see more legs out there down the road?” he asked.
‘Let me address punch – I think you’re wrong…’
In 2014 the company will ship its new Punch Monster line (pictured above) from the end of Q1, which will replace products previously marketed as Monster DUB edition (pictured).
With this in mind, Sacks replied: “Let me to address punch. I think you’re wrong. It’s not just a new design. It’s a completely different product, it’s positioned differently.”
Sacks explained that Monster DUB had been marketed to a “carb culture” and was a very niche product that the company had found it difficult to attain extensive US distribution for.
That said, one of the widest products (in terms of appeal) was punch, he added, which was why some of Monster’s competitors had also launched in this space.
“We believe that a punch product as a brand and as a sub line will appeal to a far broader audience of consumers,” Sacks said.
“We think there is a runway for the punch line…We’ve kept a badge on the back of the can because we want to retain the equity we have with the Dub consumer, but it is a completely new product.
Peace Tea innovation in 2014
Monster believed its new punch line could make “quite a step up”, Sacks said, before adding: “We’ve changed the flavor, we’ve changed the positioning, we’ve changed the cans. We believe that in this way we will continue to retain our existing consumer base.”
Other innovations in 2014 will involve Monster’s Peace Tea brand, which will launch its first juice cocktail (without tea and 5% juice) called Viva Mango this year, with expansion dependent upon product performance.
Turning to Monster’s Ultra line, Sacks said the firm still counted this as innovation, given that Monster Ultra Red was only launched a couple of months ago and the Blue product has not yet had a full year in the market.
“While you say it’s not innovation, it is…and if you look at Muscle Monster, again…its distribution is still low and that whole line now, with strawberry and, later this year, peanut butter, will give us a solid block,” he said.
“So when you look back at innovation – we think we have three strong sub-lines as such, where we feel we’ll benefit from the effect of those fully in 2014.
Muscle Monster outstrips Core Power
Launched just over 12 months ago, Monster Energy Ultra (across all three flavors) is the firm’s No.2 sub-brand, with a $97m, 5.1% dollar share of group sales, which cover Rehab, Java, Ultras, Absolute Zero, Lo Carb, Green and other smaller lines including DUB.
Zero Ultra in the white can is Monster’s No.2 selling SKU, with unit sales of 26m for the 13 weeks ending November 23 2013 (AC Nielsen C-Store data) versus 12.1m for Monster Ultra Blue.
Muscle Monster established Monster as protein drink No.2 with a 20.3% value share (AC Nielsen Total US Convenience, 13 weeks ending 9/28/13) within its first six months on the market.
The brand is well ahead of Coca-Cola-backed Core Power (4.4% share by value) and trails Muscle Milk (68.1% value share in the same 13 weeks) but increased the incremental value of the protein drinks category.
In Q3 2013 Muscle Milk was worth $45.5m, Muscle Monster $13.6m and other products (including Core Power, Gatorade SRS 03, ABB Pure Pro 50) $7.8m.
“We’ve added incremental volume to the category, and the protein drink category is up 35.8% versus a year ago,” Sacks said.