Monster Energy CEO Rodney Sacks says rivals 5-Hour Energy and Rockstar are just ‘treading water’ in sales terms while his brand is outstripping fierce rival Red Bull, which he hints caters more for yuppies.
In a business update on January 7, Monster Beverage Corporation reported Q3 2013 net sales of $519.4m (+8.9% year-on-year). Net income was $92.2m (+7% year-on-year), and Sacks said Monster sales were accelerating.
Citing AC Nielsen data for convenience stores (C-Stores) – the most important channel for energy – Sacks said Monster stretched its unit share gap with Red Bull by 8.5 share points over the four weeks ending September 23 2013.
At the end of this period Monster held a 37.5% share, followed by Red Bull (29%), Rockstar (10.1%), 5-Hour Energy (7.4%), NOS (3.4%), AMP Energy (3.3%) and Full Throttle (1.5%).
“If you look at our competitors – look at the brands from 5-Hour, Rockstar, AMP Energy, NOS – you can see that they’ve generally just been treading water and not many any real progress or real impact in this category,” Sacks told his audience of analysts and investors in New York City.
Red Bull’s for yuppies, right?
“There’s a very large gap between Red Bull and our brand and the rest of the category – that really just continues to widen,” he added.
In terms of value share over the same period, Monster held 35.2% of the C-store market, followed by Red Bull (33.8%), 5-Hour Energy (9.8%), Rockstar (8.1%), NOS (2.9%), AMP (2.6%) and Full Throttle (1.2%).
Chatting about Monster’s somewhat eye-catching support for professional bull riding in New York, Sacks said the fast-growing sport was one way to connect with the brand’s supporters in areas like the Midwestern US.
“The majority of our consumers are the American population – it’s not just yuppie, well to do professional people. The consumer base is blue collar, and that is our largest consumer base across America…That’s really how we distinguish ourselves, largely, from Red Bull,” Sacks explained.
Addressing the health of the US energy drink category in C-Stores, Sacks said it still held strong promise, growing $235m in dollar volume terms in the year to Sept 28 2013, whereas CSDs grew $136.7m.
On a dollar volume share basis over the same period, energy held a 26.6% dollar volume share in the C-store channel (+0.3%), second only to CSDs at 34% (-0.5%), followed by water at 11.3% (-0.3%) juice/juice drinks, 8.1% (-0.1%) sports drinks, stable at 9.6%, tea 5.6% (-0.1%) and RTD coffee 1.9 (0.2%).
Energy's flying but soda's flagging...
Talking about NPD, Sacks said that Monster Zero Ultra was now the firm’s No.2 selling SKU – over the same C-store period to September 28 – with the diet Ultra portfolio ($97m, 5.1% dollar share), Monster’s No.2 sub-brand and a source of “sustainable growth” for Monster without undue cannibalization of the core brand.
“Our base core consumer is still 18-34 primarily male, but the expansion of our line-up has brought it, we believe, additional consumers – more female and older."
Insisting that he couldn’t explain problems in the US soda category, where sales volumes are falling, Sacks said: “The focus of our products is basically function...with CSDs there’s a complete focus on the diet aspect and the sugar, and that’s a different consumer…we don’t really stress that it’s a diet product or zero calorie…”