View Full Version : What is the big bad red bull afraid of?
02-23-2004, 06:37 PM
Word on the street is red bull is afraid of rock star.
I hear they are telling their account managers pressure retailers to up the price of 16 oz. Energy drinks in general and rock star in particular.
It would seem rock star is gaining in market share, 20% to 40% in some markets and in Albertsons super markets they are blowing red bull away.
My customers have told me the red bull guys are giving them a song and dance on how they are losing money on 16 oz. Because 16 oz. is two servings for the price of one.
This is utter nonsense but red bull is taking their best shot.
Most retailers are not so stupid to believe that BS but it does show the arrogance of red bull.
Red bull has a lot of enemies out there. People think its because they are number 1 in the category but the real reason they have so many enemies is because they dont do business in a gentlemanly manner.
02-23-2004, 06:59 PM
Dont know what is so UNgentlemanly about a sales tactic of breaking down the "usage/comsuption" rate to its minimum.
Every above average sales person knows this sales tactic, obviously YOU dont...so does that make you below average or just not trained properly?
As far as RSTAR out selling RB in albertions.... COME ON PAL!!
maybe in a few ...and I mean MAYBE and a FEW.
When I was w/RB my one and only Albertsons sold 200 cases per month!! Thats 4800 cans a month, 39840 oz. per month, 160 cans per day sold, 6.6 cases per day, $.67 profit per can $3216.00 profit per month, $9072.00 in sales per month.
Ya see the sales tactic.
I am a Huge RED SOX fan, and you are sounding like most of my friends talking about how the Yanks are not fair, or UNgentlemanly.
Dude get over it...they (RB+ YANKS) may be #1 but not Champions every year.
Keep plugging and keep your share of the market, and try not to sound like energydude!! youll be fine.
02-23-2004, 07:36 PM
Hey Toby I dont sell rock star. In fact I have never posted the name or names of product or products I currently distribute. So please do not accuse me of using this forum to sell my stuff.
When I talk about red bull as being ungentlemanly I mean as a rule not just in this case.
Their arrogance and skullduggery are well known in the industry.
Again I have nothing to do with rock star other competing against them.
02-23-2004, 08:00 PM
"Hey Toby I dont sell rock star. In fact I have never posted the name or names of product or products I currently distribute. So please do not accuse me of using this forum to sell my stuff."
Lempke...I never said you sold ROCKSTAR. also I never accused you of using this forum to sell stuff.
My last comment was intended as a pick me up and not to cry or whine like edude "OUT ON THE STREETS". I apologize for not being more clear.
02-23-2004, 08:14 PM
My information on Albertsons selling more rock star then red bull came from red bull.
I know many red bull account managers and they fill me in.
The sales tactic that you seem so found of would insult the intelligence of my customers. Since I have to see these people every week the last thing I would ever do is insult them.
Ive been in sales for over 25 years and am quite proud of my successes. It would never occur to me to try to confuse my retailers with double talk and bogus figures.
My customers trust me because Im honest and respect them.
02-23-2004, 08:26 PM
"It would never occur to me to try to confuse my retailers with double talk and bogus figures.
My customers trust me because Im honest and respect them."
point taken with the honest line....however, confusion is cause by the initiator most of the time so maybe you should communicate a bit better!
and double talk....its figures pal, ya know "numbers" "sums"....and there is nothing "BOGUS" about the numbers I just showed you.
Sounds like you just CONFUSED yourself.
02-23-2004, 09:42 PM
It may be possible that Rock Star has gained some market share in many areas. And Red Bull should be scared and not at the same time. Rock Start is Red Bull only true competition. While many other energy drinks sell, Rock Star is the second hottest selling drink. But even with that said out of every 10 cans of energy drinks, 6-7 of them are Red Bull 2 of them are Rock Star, and the other 1 is of the rest. Rock Star may be up to 3 cans in some areas. Im am sure Red Bull is putting the pressure on the RMs to keep the gap wide open, but its not like Red Bull is in danger of going out of busines. And no way are they loosing money on 16 oz. cans. I believe it is made here in the USA, so it should only cost them about $8 a case, if that. It cost Red Bull $8 a case to make Red Bull and ship it over seas. Plus, Rock Star does not advertise on TV, so I think they are doing ok as well.
02-23-2004, 10:02 PM
RB feels the best way to sell their product is to have no other ones around. I am glad to hear RS is doing well. SP does well when placed right next to RB as well. There is nothing wrong with offering choice when the products differ so much.
02-24-2004, 12:03 AM
so what your saing edude is the lawyers, law makers and politicions should MAKE the bar owners offer the consumer a CHOICE?
SO WHAT ABOUT THE CHOICE THE BAR OWNER SHOULD HAVE IN WHAT HE/SHE CARRIES?
you are jumping from one foot to the other!!
make up your mind!
02-24-2004, 12:58 AM
Thats it Toby dazzle them with bull****.
A red bull account manger can prove that ounce per ounce the retailer makes less money on rock star and I guess thats the truth, but its a half truth and where I come from a half truth is a lie.
Red bull @ $32.00 per case $1.33 per 8.3 oz. Can $0.17 per oz. Retail price $1.99 per can $0.24 per oz. $0.07 profit per oz.
Rock star $32.00 per case on going buy 3 get 1 free all the time brings the price down to $1.00 per 16 oz. Can $0.07 an oz. Retail price $1.99 per can $0.13 per oz. Profit per oz. $0.06
Well I guess red bull is right.
Now lets look at it my way red bull cost the retailer $1.33 a can they charge $1.99 a can profit $0.67
Rock star cost retailer $1.00 per can they charge $1.99 a can profit $0.99
I can see how one could believe they make less money on rock star as compared to red bull.
Sku per sku the retailer loses money every time a can of red bull leaves the store.
If a retailer chooses not to carry red bull he/she will make more money and all that stuff that is not selling starts selling. The retailer pays less for every energy drink other then red bull. Red bull cost the retailer money.
It would behoove the retailer to drop red bull for a less expensive like tasting product like xtrem or rock star. People will buy it up if there is no red bull.
Now Im very sleepy so Ill end it here and see what I posted tomorrow.
02-24-2004, 01:00 AM
Kinda funny that the Albertsons in West Texas don't even have RS. Has anyone noticed the amount of dispay and cold availability that Red Bull has in these stores? The new schematic for Albertsons calls for an entire 4' shelf MINIMUM and all the way up to a 12' shelf. Yeah...Red Bull is hurting allright......
02-24-2004, 01:10 AM
Toby seems like you just want to argue.... Choice is the american way. Think American and Buy American. RB needs to play fair, they just purchased 6 tables for a club nearby and told them they were free if they were exclusive..... not right Toby not right at all.
Red Sox fan
02-24-2004, 01:29 AM
This is kind of interesting. I was going back through some of "RB1's" old posts. It seems as though the only time he bothers to chime in is when something relatively positive is said about Rockstar. To which he usually replies with some slam about RS or some Red Bull propoganda. Is someone a little paranoid???
02-24-2004, 09:18 AM
I would be willing to bet that if this club took the tables and then a week or two later they carried SP, RB would not do a thing.
1)if it plays out the way you are telling us ...yes THAT would be illegal. (your BSing us)
2)I believe it WAS an incentive reward given for the CHOICE the bar owner made in his exclusivity.
NOTHING WRONG WITH THAT!!
Either way, stop whinning about it here and GO in and promote SP and PROVE us wrong that owners want a CHOICE!!
02-24-2004, 09:20 AM
To drop RB in hopes of making more money is stupid. Hey, why not drop Coke and Pepsi and only sell Shasta or Safeway Select? Doesnt work here when you have a brand that sells so well. And so what if Red Bull bought six new tables and offered them to a club. Go out and buy 7 tables signed by the Sum Poosie girls. No one sees anything wrong with that. RS is a great brand, and I think we all would love to see volume like them. But they still can not be compared with RB level of sales.
02-24-2004, 09:53 AM
Your funny Ron... So what if RB buys a bunch of stuff hey you just do it to????? That is what laws are for Ron to protect little companies from big companies doing things unfairly. But in your fantasy world nothing RB does is wrong. We are know you and Toby have gotten rid of your Playboys magazines and replaced them with RB cans. Just be careful not to cut yourself the opening, it is kind of little. ;)
02-24-2004, 02:07 PM
The ironic thing here is that if it is true that Rockstar is gaining momentum, Red Bull shouldn't worry, everyone else who doesn't sell a 16 0z should. It is clear that no one can really compete with Red Bull at 8.3oz, so Rockstar did (what Pepsi did when they first started) give the consumer twice the product for the same price. If a second energy drink starts gaining market share who do you think it will hurt first, Red Bull, or the hundreds of other energy drinks fighting for the remaining piece of the pie?
By the way, the pitch about store owners losing money with 16 oz is correct. They are doing a favor to the Rockstars of the world by charging the same price as Red Bull - why do you think Rockstar has to give a perpetual 1 on 3. The retailer could justify a higher price because of the product's size, and by not doing so loses out on more potential profit.
Secondly, your profitability analysis of Rockstar in grocery doesn't consider Red Bull 4-packs, which have shown tremendous growth, and provide a retailer with an additional revenue generating SKU.
Lastly, no one has considered the long-term impact on energy drinks with the practice of selling 16 oz for a cheaper price. Let's be real, the reason why energy drinks sell for as much as they do is the perceived functionality and its correlation with being seen as a premium item. Selling twice as much for the same price only cheapens the public perception of the category which in essence can kill the golden goose. Once you do that, anyone who sells an energy drink, will be looking for something else to sell.
[ 02-24-2004, 01:09 PM: Message edited by: Coco Rico ]
02-24-2004, 02:52 PM
Originally posted by Red Sox fan:
This is kind of interesting. I was going back through some of "RB1's" old posts. It seems as though the only time he bothers to chime in is when something relatively positive is said about Rockstar. To which he usually replies with some slam about RS or some Red Bull propoganda. Is someone a little paranoid??? I'm reald worried since I've never seen the crap.
What a joke...........
02-24-2004, 05:10 PM
Coco, I am no great fan of rock star. When I started this thread it was more or less about what I had heard about red bulls fear of rock star.
I agree with you whole heartedly about not cheapening the category. As a matter of fact when one of my customers offers to sell my brand for $1.89 or $1.79 I ask them to please not go below $1.99. Some of them look at me like Im crazy but as you pointed out and I point out to them people drink energy drinks for their functionality, I feel if its priced cheaper then the consumer will perceive it as being a cheaper brand that does not work as well as the market leader.
Maybe no one can really compete with the market leader in 8.3 oz. Can but again if I can (and I do) sell 1 of mine to 3 to 5 of theirs then Im not doing badly and my retailers are very happy with that. At least I have sell through.
A storeowner does not base his/her margins on per oz. Measurements but on the cost to them per unit. When a retailer pays $1.33 for a can and sells it for $1.99 he makes a profit when he buys a can for $1.00 and sells it for $1.99 he maker MORE profit. Get it? Its simple. A retailer does not sell drinks by the oz. A convenience store is not a bar. The retailer is looking at what he has invested in the goods and the percentage he will earn on said goods.
By the way rock star comes in 6 packs offering the retailer yet another sku.
Believe me I have no problem with the idea of selling rock star for a higher or even a much higher price. In fact I believe the retailer is losing money by selling red bull for $1.99 about a quarter of my customers sell red bull for from $2.29 to $2.49 if these stores can get that price why shouldnt they all get that price after all why leave the money on the table? A red bull drinker will pay $2.49 so they should pay that. Dont you agree coco?
02-24-2004, 11:51 PM
So now Edude is thinking of me and Toby in an erotic way? Did you rename your drink to Sum D!ck? Is that what you need? Please, all I ask, is show me what law you are talking about. And show me one other person, other than Mrs. Energy, that is on your side on the RB being unlawful? This is all I ask. That, and try not to think about me in that way. As happy as you may be now with San Franciscos current affairs, I will not invite you up for a wedding. Sorry, your fantasies will have to be kept to just that.
02-25-2004, 11:03 AM
Ron, we will never see this Law!
Two reasons, it doesnt exist, and SumD!ck will not look it up if it did, which it doesnt so I guess its only ONE reason.
Now sumd!ck has stuped to sexual advances!
LETS MAKE THIS REAL CLEAR AND SIMPLE!
02-25-2004, 02:44 PM
MONSTER is doing well here and Rockstar seems to be fading. Differwnt coast I guess.
Red Sox fan
02-25-2004, 05:06 PM
and what coast would that be?
02-25-2004, 07:28 PM
There is no fade here on the West Coast. Monster does have some play. I know they have a good guy working on-premis for them in Vegas and possibly LA area. But I couldnt see them ahead of RS in any market. Could be wrong, but that is what my take is.
02-26-2004, 08:10 PM
I think the law you guys have been wondering about is called the "Sherman Anti-Trust Act".
Its to provide an equal playing field.
02-27-2004, 12:03 AM
Does not matter what you show them they feel RB is some how above the law.
02-27-2004, 01:13 AM
I think red bull manages to follow the letter of the law but not the spirit of the law.
Just because a tactic is not illegal does not make it ethical.
Ive said it before red bull conducts business in an ungentlemanly manner.
Does any one remember when Pillsbury was trying to put Ben and jerrys out of business? That really backfired and ended up putting Ben and jerrys on the map.
One day red bull will go after the wrong people and a grassroots movement could spring up the same way it did for Ben and jerry.
02-29-2004, 03:17 AM
Lepke explain to me how RB giving 5k cash and gifts to a bar and telling them in return they have to throw out all other energy drinks. Tell me how that is legal or OK?
02-29-2004, 01:15 PM
Energydude, Im not an attorney I dont practice law but I do know for a fact red bull have very good lawyers and they dont make a move without consulting them first.
With all the suing red bull does out there they are very aware of liability. They dont want someone doing to them what they so readily do to others.
02-29-2004, 06:10 PM
edude, because you or Lepke dont like it or thinks its unethical....doesnt make it illegal!
Just repeating what you said Lepke. Maybe if he heards it a thousand times it will sink in.
Is RSTAR even available in any West Coast bars? I haven't seen it in one (and I get around).
Does RBULL, etc. do most of its business in bars or supermarkets? Just curious.
03-15-2004, 06:01 PM
Rock Star is avalible in bars and clubs, just not as strong at all as Red Bull. Rock Star is sold here by Southern Wine and Spirits, and 7-up. So Southern has the ability to get it into bars, I just think its easier for clubs to go with 8 oz. can since once opened, it can't be stored.
Don't quote me on it, but a few years ago I asked the SF Dist. what their sales numbers were for on premis, and it was about 15-20% of their numbers. Grocery, I dont know.
03-15-2004, 06:07 PM
15-20% is about right Ron, I was thinking it was 20-25%, but whatever. The real cool thing is that whatever the % is, in general 6 out of the top 10 accounts in RB areas/regions/citys are on-premise. That is one of the reasons RB has a much larger sales force and "reward" system setup for that part of the business.
Is RSTAR even available in any West Coast bars? I saw it on the menu (along with RB) at the Beer Hunter in Rancho Cucamonga (CA)
Thanks for your responses... I am trying to figure out where the real growth of this energy-drink industry is. Europe sells so much more than the US, and from what I could see, they have a lot fewer brands!
Is the growth in the bar (ie, mixed with alcohol) segment? Or the supermarket / C-store segment?
Or will the US never catch up to Europe because we just don't have clubs that go til 8am? And are Starbucks / Jamba Juice (juicebar) type places in the US capturing part of the market that might otherwise go to energy drinks?
What is the consumption breakdown in Europe? Is it true that most of the energy drink consumption is in all-night clubs?
One more thought: I saw a drink called 'Sparks' that is an energy drink pre-mixed with Vodka. It seems to have fallen flat. It seems like people would rather go to bars and order energy drinks there, as opposed to sitting around the house getting amped & loaded with pre-mixed drinks.
What do we think of that proposition?
03-16-2004, 12:22 AM
well in Ireland it is bars n clubs.
I had heard (maybe wrong) the per cap consumption is 7.5 in Ireland.
THATS ALOT OF RB!!
03-16-2004, 12:35 AM
What I would like to know is why are drinks that do not follow FDA Guidelines of no more than 6mgs of caffeine per fluid oz. allowed to sell in the USA??? I would really like the FDA to answer that. USA manufactures have to follow FDA rules but if it is FOREIGN you can do what you want?
RB has 10mgs. per fluid oz. does anyone think this is right or fair??? Its like FOREIGN cars made to go 150mph but American made cars only 75mph. FDA...... BEVNET.......ANYONE!!!
03-16-2004, 08:45 AM
Vipers top speed is 175mph (Dodge USmade)
Vettes top is just under 185mph (Chevy USmade)
GT40 top speed just under 190 mph (Ford USmade)
Chryslers concept ME412 is est at over 200 mph.
Those #s are far from 75 mph...in fact hybrids have top speeds of over 75mph. Maybe edude is thinking of his first car the MODEL "A".
Now, is a few mgs really making that big of a diff in RB compared to SP?
Sounds like edude is wanting to whine, complain and bitch about RB and forgein countrys being unfair.
03-16-2004, 12:29 PM
Where has the FDA recommended 6mgs of caffeine per fluid oz? Obviously they haven't mandated this because most coffee would become illegal. What resources clarify this claim, because I can't find any one way or another.
03-16-2004, 12:54 PM
I think Sparks is still holding its own, but pretty much in its intended market...the ghetto. I saw it a few years ago as a test market in San Francisco, and it sold extrmely well in the Tenderloin dist., I still see it moving, but only in the ghetto.
03-16-2004, 10:40 PM
college campuses as well.
the stuff's made by steel reserve aka miller. we do well with it around MSU and in the hood, single serve style.
03-17-2004, 05:08 PM
The guideline is for carbonated beverages and is even posted on the www.dpsu.com (http://www.dpsu.com) website. Caffeine is supposed to be no more than 6mgs. per fluid oz. RB and a host of others are way over the guideline why is the FDA allowing this to happen? Anyone????
03-17-2004, 07:49 PM
Were on the site does it show that? Also, is this based on carbonation levels? I think we need a bottler here to answer these questions.
03-17-2004, 09:32 PM
Most energy drinks are classified as dietary supplements not as carbonated beverages.
A dietary supplement can have any amount of caffeine.
03-18-2004, 12:47 AM
great point Lepke.
03-18-2004, 02:45 AM
Lepke can you name some carbonated dietary supplements for me?
The only FDA guideline on caffeine is a max of 200ppm.
Perhaps that translates to the amount quoted.
Either way, the FDA rule is 200ppm. Fact easily confirmable by the research people at any energy drink company (like they actually do research...hahaha!!!!)
I don't think Miller makes this stuff. Its an independent company in SF. Steel may be the manufacturer, but they and/or Miller are not the guy behind the guy. Am I wrong?
03-25-2004, 08:32 AM
Cali Energy Drinks fall under Carbonated beverages and the max allowed of caffeine is 6mgs. per fluid oz. according to the FDA.
03-25-2004, 09:51 AM
Actually Red Bull, and most other energy drinks fall under the dietary supplement category edude
03-25-2004, 10:07 AM
Yeah that is what I thought too. But the FDA sees it a little different. According to the conversation I had yesterday if it is carbonated it falls under the soft drink rules. She is having her boss call me today to discuss it with me further. I will let you know what they say.
03-25-2004, 10:38 AM
I know US food and beverage regulations are very different than Canadian regulations, but I thought Id give you guys a heads up on what going on here regarding allowed caffeine content.
In Canada, it is illegal market a beverage where caffeine has been added as a food additive, except for colas, to a certain level (this explains why there is no caffeine in Mountain Dew around here.) However, theres no limit in caffeine content when caffeine naturally occurs in an ingredient (e.g. coffee, tea and guarana). This explains why we have some energy drinks containing caffeine amounts well exceeding 200 mg (compared to a cup of coffee at aprox. 100 mg and Coke at approx. 35 mg), by using guarana as an ingredient. Guarana contains up to 3x more caffeine than coffee.
BTW, in Canada, we can only find the Thai version of RB, which is sold as an dietary supplements, falling under another set of regulations, way more liberal. I think that the US version of RB contains caffeine as an ingredient, which would make it an illegal beverage here.
03-25-2004, 10:47 AM
Interesting thanks for explaining that... I did not know! smile.gif
03-25-2004, 11:14 AM
Very interesting, I always wondered why exactly RB couldn't be sold in Canada. And Edude I will be very interested to hear what you find out, because when I talked to the FDA office here in Chicago about it, they told me that it is a dietary supplement and that the rules regarding those are extremely liberal
04-14-2004, 02:08 PM
Originally posted by Energydude:
Yeah that is what I thought too. But the FDA sees it a little different. According to the conversation I had yesterday if it is carbonated it falls under the soft drink rules. She is having her boss call me today to discuss it with me further. I will let you know what they say. Got an update edude?
04-15-2004, 09:17 PM
It's kinda fun to see the posts of Energydude and the way of pushing his products trough this forum... I have nothing to do with the beverage industry, just a regular guy that likes to be informed.
I have been tracking the development of the energy drink market in the USA and in Latinamerica and it's interesting how the "small guys" try to gain marketshare (and money) by "attacking" the "big guy". Red Bull started the category and there's no question about it, but how did they do it? By attacking Coke or other competitors? No. Just with the product (I'm not saying that it's good or not) and with an unique (even now) marketing strategy. There is a huge market for Energy Drinks all over the world and I like to ask to edude: why trying to gain market over other companies instead of making the market bigger? why to target the same people in the same places? With this approach you are only saying people that your product is "LIKE RED BULL, but better"... or "RB tastes like crap, this one is better"... Why not doing your own strategy? Sure, Pepsi attacks Coke all the time, but we all agree that Pepsi is not whateverPoosie or BIB. Just my opinion.
04-15-2004, 09:50 PM
Valid points but look at it this way... RB is a lousy product and it is very expensive. Who cares if they started or developed the market?
Did Walmart invent discount stores??? NO! They took an idea and did it better. RB is not a very good product and it is losing steam. Rockstar has made real strides out west and continues to gain marketshare. There is nothing wrong with expressing your opinion and sharing with others the weaknesses in your competitions product. You shouldn't bad mouth your competition??? Why not if they deserve it? Just my opinion! smile.gif
05-25-2006, 09:06 PM
Two years ago when I started this thread most people were very skeptical that rock star was even a contender. People just could not believe it.
Red bull knew and thats why they had a meeting with all their account managers.
While red bull is certainly not going anywhere, what a difference two years makes.
[ 05-25-2006, 08:18 PM: Message edited by: Lepke ]
06-01-2006, 11:51 AM
The bottom line is that some of the competitive 16oz brands are catching up to Red Bull. In the SoCal market, Monster is the one nipping at RB's heels...not Rockstar. I know, RB is still the #1 selling energy drink, but I've seen account specific sales numbers that don't have them all that far ahead of the competition. In fact, I would not be surprised in the least to see 2006/2007 numbers show Monster pass them up...