In 1997, HNC that had till then been selling only fruit juices and sodas, made an entry into the energy drink market by launching ‘Hansen’s Energy’ in a slim 8-oz. can. It was the same year that Red Bull also made its debut in the energy drink market. HNC expected young American males between 18 and 30 years of age, who needed a quick energy boost, to be most attracted to the new beverage and hence made them its target market...

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MONSTER’S BRAND POSITIONING

HNC did not spend money on commercials (TV or billboards) or other forms of mass media marketing. Instead, the company gained publicity for Monster by sponsoring rock concerts and extreme sports that included Motocross . Speaking about the reasons for choosing Motocross, Hall said, “It was the coolest thing out there – not organized, rebellious. It was on the edge. Its ever-evolving nature attracted me.” Monster also sponsored skateboarding, surfing, car racing, and electronic games, or e-games. By sponsoring such events, the company sought to attract young adventure loving customers to its brand. At various sponsorship events, the company served as a backdrop for recognition by placing its logo on the sports vehicles or equipment, walls of the venue, and on the clothing of the athletes/artists....

CHALLENGES TO GROWTH

Over the years, Monster along with the rest of the energy drink players was subjected to a growing legal onslaught from people who claimed that energy drinks had caused them harm. In 2012, Monster was slapped with a ‘wrongful death’ suit by the mother of a 14 year-old girl who died from ‘caffeine toxicity’ after she consumed two 24 oz. Monster cans within 24 hours. In addition, the US Food and Drug Administration announced that it was investigating five other suspicious deaths, along with one non-fatal heart attack attributed to the consumption of Monster energy drinks..

USHERING IN A NEW ERA

In August 2014, Coca-Cola paid US$ 2.15 billion for a 16.7% stake in Monster and two seats on its board. The deal was expected to better align each of the two companies’ product portfolios and distribution capabilities. Both companies transferred ownership of certain businesses to the other. While Monster transferred its non-energy business to Coca-Cola, the latter transferred ownership of its energy business to Monster. Muhtar Kent, Chairman and CEO of Coca-Cola, said, “Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category.” Through the deal, Monster became Coca-Cola’s only presence in the energy drink segment...

THE ROAD AHEAD

As of 2016, Monster held 26.8% of the market share in the US energy drink market, while Red Bull was the market leader with a share of 38.3% (See Exhibit III for Worldwide Top 10 Energy Drink Making Companies). Monster was also the top-selling cold beverage in the US Army & Air Force Exchange Service ...

EXHIBITS

Exhibit I:Energy Drink Market, as of 2016
Exhibit II: Monster’s New Products in 2015.
Exhibit III: Worldwide Top 10 Energy Drink Making Companies, 2015 .
Exhibit IV: 2015 Survey of Convenience Store Retailers.
Exhibit V: US per Capita Consumption of Soft Drinks (in gallons).