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KCBevGuy
05-25-2006, 08:48 PM
Hello all, I have been in the beverage industry for only six years with a GREAT Miller Distributor. As I evaluate the on premise channel and the world of energy drinks I have found that the beer industry approach is much different than that of Red Bull. If you have a moment to share thoughts with me on Red Bull’s approach to the local market it would be greatly appreciated. I would like to preference these questions by stating that we are not a red bull distributor.

A. For those of you who distribute Red Bull: How do you rate the support of RBNA as a partner in your brand portfolio?

B. Has anyone heard of successful local marketing that Red Bull sales teams, distributors or others have implemented with this brand that drives sales.

C. With the brand equity that Red Bull has, does anyone see a collapse of the current pricing umbrella with this product to allow for volume growth.

Any information that the members could provide on RBNA and its approach to Distributors, local marketing, sales force or other would be appreciated.


Thanks

KcBevGuy

JSCNitro2Go
05-25-2006, 10:51 PM
This is J. S. Clayborn in Texarkana, AR and I sell Nitro2Go Energy Drinks, and you can visit our site @ www.drinknitro2go.com (http://www.drinknitro2go.com) for more information. Basically, what RB does is make the c-store or big box retailer think that they have to carry the RB product. They make specials: IE: buy 10 cs get 1 cs free, and they give them 1 to 2 cs per month for shelf space. Also, they set sales goals for each store and if they meet these goals they give them more product as a bonus. The RB Distributor that covers our market drives 150 miles just to get to Southern Arkansas, and does a fair job, but when you have pre-arranged agreements with everyone in the market, this is an easy task for the distributor. Very few stores do not carry RB, as it is king of the industry. They were 1st to the shelf and this will continue forever. However, in some markets if you have the same shelf space as RB, RB will not do as well. When you have 8 facings in every location, there is little room for other brands. This is something they have done very successful. Also, their 4 pack program, and now 12 pack program is working very well to sell more product. All I can say about RB is if you want to see someone that does a good job, follow their lead and you will not go wrong. Another example is Budweiser or Miller, they do the same thing, just in discounts or volume pricing purchases. The name of the game is VOLUME. How many facings can you get choked down someones neck and let the fun begin. I am starting to see Coke aka as Full Throttle or Rock Star follow the lead of RB and it works for them too. Watchout for Monster, as they are gaining momentum slowly but surely.

If everyone had equal space, it would be very interesting to see which one would sell the best.

I doubt we will see this, but time will tell. Just a few years ago, Energy Drinks only held two shelves, now there are full doors of Energy Drinks. The population is growing, so that is one reason energy drinks are now slowing down. It kind of runs a cycle, starting @ age 16-age 35.

Everybody is shooting @ Red Bull, but they are NOT to be shot down, and the rest of us are just happy to have a small piece of the pie. If you can gain 5% of the total energy drink category, you have done something, based on the millions of $$ sold each year. Red Bull is solid, however most of the Corporate Guru's at the top or regional guys are for a better word, BUTT HEADS. Also, they think they are better than anyone else. Maybe they are, but lets see one of those guys take another brand of any type and see how they fall. I think anyone could sell Red Bull, Budweiser or Coca Cola, as they are merely ORDER TAKERS and Delivery Boys. No salesmanship required. Nuf Said. JSC

KCBevGuy
05-25-2006, 10:57 PM
Thank you so much for the input. I see the Monster growth in the KC market. It will be intreasting to see how AB distributors handle this new product and if they are capable on the local level of focusing on Monster with the same focus that they give Bud Light.

Cheers and thanks again

JSCNitro2Go
05-26-2006, 07:03 AM
What I dont look for with AB is distribution of Monster into accounts that dont carry Bud. If you have a dry market or county, then they will NOT service those markets with Monster. JSC

SumPoosieCat
05-26-2006, 08:26 AM
AB has one of the largest distribution networks in the world! Monster will thrive as will Rockstar because Coke too has a fantastic network setup to help Rockstar continue to grow. Red Bull has sat by and let these huge deals happen and what has been their response?
A 16.9 ounce can that cost nearly 4 bucks...

KCBevGuy
05-26-2006, 10:27 AM
Tall I agree with you and JSC. I do not think that Ab will take advantage of Monster distribution in places that they do not sell beer in. Additionally, for Red Bull to remain the dominate industry leader in this category they are going to have to collapse the huge pricing umbrella to regain the competitive edge and grow volume.

Great input, THANK YOU!

Ron Swedelson
05-26-2006, 02:48 PM
Trust me, you have to sell thoes shelf programs, pricing, location, 4 packs, 12 packs, all that into stores...Red Bull gives very little away free if not on a contract, were as every other drink goes by the buy 3 get 1 free, and at a cheaper price. Out of 100 stores, 98 will want Red Bull. But only 35 will want to do any sort of program, 20 will not want to carry the Sugar Free or the 4 packs. 10 will always be comparing your prices to that of the loacl cash and carry, 60 will always say "so and so is giving me free cases this week, you have to give me free cases too", only 10 will want fridges, 25 will take some sort of case stacker, shelf power wing, or display piece...need I go on. If you let thoes number be, simply because that is all the market asks for...yes, you are an order taker. I never allowed these numbers to sit and always tried to sell in more skus of product, better placement, more POS. Everyone wants your brand, but they don't want the whole portfolio. Sorry, I take offence to being called a former order taker.

fusion
05-26-2006, 04:19 PM
Congrats on 1800 posts, Ron. Lots of insight in that history!

Ron Swedelson
05-27-2006, 06:27 PM
Thank you...I have worked very hard the achive this milestone...next stop....2000!!

Mr Zabe
05-27-2006, 07:56 PM
Ron,
Congrads on the big 1800. smile.gif <Said with respect.>
Not that numbers matter; you old timers are the life blood of this board. smile.gif
Zabe

[ 05-27-2006, 07:57 PM: Message edited by: Mr Zabe ]

-VV-
05-27-2006, 10:09 PM
Let me go ahead and chime in as well. Congratulations on your posting milestone, Ron! I definitely enjoy and have benefitted from the insight and wisdom you share so willingly on the boards.

Cheers!

Coco Rico
05-28-2006, 03:52 PM
Congrats Ron, I've enjoyed reading your posts over the years.

And, to add to the original topic, I agree with Ron that it is a severe over-simplification saying that Red Bull's reps are merely order takers because the product is so popular.

6-8 years ago, these same reps helped create the category by aggressively selling a no-name product that everyone in the industry thought was over-priced and a fad that wouldn't take off here in the States. Now look where we are.

I think it is incredibly naive to believe that Red Bull maintains and grows it's presence and continues to grow in the US this year at 40% without a tremendous amount of work and strategic thinking at the field level.

Although, I guess having competitors constantly underestimate them has helped Red Bull maintain it's dominance in the industry.

TallThinBlonde - your comments about Red Bull's pending premium priced 16.9oz remind me of the early days when people like you discounted the viability of an 8.3oz beverage selling for $2. Only time will tell with this new product offering, but I learned long ago not to bet against Red Bull when they have their minds set on something.

CR

SumPoosieCat
05-28-2006, 08:06 PM
I thank Red Bull every day for helping to create this Energy Drink category which now provides me a very good living. However, you cannot ignore that the once dominant Red Bull is not so dominant and is no longer number 1 in the largest energy drink market in the USA (LA), and about to become number 3 in San Francisco. Monster and Rock Star have signed huge distribution agreements with 2 of the biggest distribution companies in the world and the Red Bull response has been... a 16.9 ounce can for nearly 4 bucks. Please tell me there is more! Please tell me Red Bull has some type of plan to slow down or stop the train that seems to be running right over their head. Better yet tell me what you think Red Bull CAN DO to stop or slow down the Monster/Rockstar train.

reset man
05-28-2006, 10:28 PM
I think eventually Red Bull will come down in pricing. Monster is their main competition in my area and I've been told by some of my accounts that the Red Bull distributor is telling them they should charge more for 16oz. energy drinks because they're bigger. Well, Red Bull's pricing is $32, maybe a 10+1 free deal and Monster is 3+1 free=$24 net cost on-going. It does take some audacity to tell an account to sell something for more when the pricing is much sharper than what your giving. It seems the Red Bull distributor is now starting to talk about their competition which only means they're being effected by them. Monster is starting to expose the fact that Red Bull is way over priced by selling a great product, twice the size for a better price.

KCBevGuy
05-28-2006, 11:22 PM
Great input from all thank you very much. Tall blond, I think that Red Bull could do several things to slow down and/or stop the train.

1. Implement a greater discounting program and or increase amount of free cases with regular post downs or increased case giveaways.

2. The mobile energy teams that are out in the market need to do a much better job approaching consumers and informing consumers about the brand. I was approached by this team once and all they did is handed me a Red Bull. No hello, No here's what we are doing nothing.

3. Red Bull supplier representatives need to really evaluate the position of Monster and Rock Star in the Off premise cooler sets. If they do not have the space that is deserved, they must get it.

4. Last but not least. They must fix the pricing problems that they have created for the bar owners. Most markets, Red Bull can be purchased from $1.00 -$3.00 cheaper per case at big box retailers like Costco and Sam's club. This has left a BAD taste in the mouths of most bar owners and does the brand nothing for loyalty.

KCBevGuy
05-28-2006, 11:27 PM
Congrats on 1800 posts, Ron. Lots of insight in that history! Please chime in on the current topic if you would. Your input would be appriciated.

JSCNitro2Go
05-29-2006, 04:34 PM
I wish someone would volunteer for this, and give us 20 retail locations to do a test in, to see what is the consistent seller of the energy drink category. However, the test would have to be equal and fair, and equal shelf space, etc. It would be very interesting to see apples compared to apples for once, and let the cards fall where they may. The retailer is going to say, well if I give everyone the same space as I do for RB, AB, ML, RS, FT, Mstr, etc, we could have one hell of show. This game we are playing in the beverage business, is similar to Auto Sales. If you go to a Car Dealership, and they have the majority of one brand or make, that they probably do sell more of that brand or make of vehicle. It is simple math. More facings should equal more sales of that brand. RB has done a great job, and I dont think Monster. RS, FT or anyone will ever out sell them in total volume. You will see some markets do better than others, but as a whole they will continue to perform very well. They coined the business, so they are here for good. If we were all still in the 8.3 or 8.4 oz business, they would have the whole category. They are going to sell these larger cans @ $4.00, so just get use to the idea. That is where the 16 oz should be anyway. Energy Drinks, Soda's and everything else is more expensive than beer. This is very interesting to me. If they could get $1.99 for a 16 oz beer, you would see that quickly. JSC

KCBevGuy
05-29-2006, 08:31 PM
J.S. That would be one hell of a study. I would love to do the same in the beer set as well. By the way, you can get plenty of 24 oz beers for 1.99. Most of the domestic beers, I am certian that you can find some lower ends for .99 however the 1.99s are Bud, Bud Light, Miller Lite ect.

Nice thoughts thanks for the insight

JABevan
05-30-2006, 09:26 PM
JSCNitro2Go, I may have the most democratic sales channel available. I have a network of energy drink vending machines. I sell over 30 drinks, add more every week, and tailor my offering to each location. Each product gets one slot, and I've experimented with pricing, positioning, etc. in all my machines. Each machine has slightly different sales patterns, which result in slightly different planograms... BUT, everything is market driven.

Here are the standings by volume YTD:

1) Red Bull
2) Monster
3) Rip It Power
4) Monster Lo-Carb
5) Kronik Energy

Not a completely perfect test, but those are the real numbers... for what they're worth.

JAB*

KCBevGuy
05-30-2006, 09:55 PM
JAB

That is a great amount of information. Thank you for sharing your insight.

KcBevGuy

greg
05-31-2006, 10:24 AM
Originally posted by KCBevGuy:
I think that Red Bull could do several things to slow down and/or stop the train.

1. Implement a greater discounting program and or increase amount of free cases with regular post downs or increased case giveaways.

RED BULL grew their budsiness by this model. To go back to it would be cheapening the brand as well as creating a price war between the energy drink companies. Solid brands would loose revenue while "possibly" gaining volume. The winners would be retailers only.

2. The mobile energy teams that are out in the market need to do a much better job approaching consumers and informing consumers about the brand. I was approached by this team once and all they did is handed me a Red Bull. No hello, No here's what we are doing nothing.
There job is to get the drinks in as many peoples hands as possible. Let the drink the selling. An RB Regional Mgr once told me that over 70% of the American public has never tried a REDBULL.

3. Red Bull supplier representatives need to really evaluate the position of Monster and Rock Star in the Off premise cooler sets. If they do not have the space that is deserved, they must get it.
Agreed.

4. Last but not least. They must fix the pricing problems that they have created for the bar owners. Most markets, Red Bull can be purchased from $1.00 -$3.00 cheaper per case at big box retailers like Costco and Sam's club. This has left a BAD taste in the mouths of most bar owners and does the brand nothing for loyalty. Delivering to bars a single product is labor intensive, time consuming and marginally profitable at best. The Bar owner/manager is better served paying the premium then wasting time going to Big Box retailers chassing a couple of bucks. I will bet you no bar owner will ever lose money on his RB sales.

[ 05-31-2006, 10:25 AM: Message edited by: greg ]

Ron Swedelson
06-02-2006, 11:16 AM
#3 in San Francisco? wow, I'd like to see thoes numbers. Last time I checked, Red Bull was still #1 in San Francisco and had a huge lead over RockStar and Monster. Both are still sold by 7-Up in this area, and although they are huge sellers, and you have to respect their increase in sales, I do not see them taking over the #1 spot. Especially with one of Red Bulls Corporate offices just on the other side of the bridge from San Francisco. Now other areas, I can not fully comment on because I have not worked in them for some years now. But out here, seeing the sales numbers, actually selling Red Bull, and even Monster and Rockstar all within the last few years here, I can tell you I do not see that shift happening. I would like to know if you had a source out here, looking to sell your product, and told you this. Or what numbers you might be looking at. I have been wrong before...I don't know if I have been wrong twice...but I think at least once before....(sorry, stupid joke)

greg
06-02-2006, 04:35 PM
Nitro2Go also manufactures over 10 top selling energy supplements under the Nitro2Go brand name which is the top seller in the State of California.


I got the above info from JSCs website. I have never seen or heard of the 10 top selling energy supplements you listed as being your brand.( It did not go unnoticed what you wrote and what you implied to the reader by delicately wording your statement) What about Xenadrine, Lipo 6, Hydroxycut, Redline,STACKER 1,2 & 3, Zantrex, Fahrenheit, etc. I would surely like to believe that if you are #1 in Cali then you would most definitley have an impact to some degree in the rest of the US like the rest of the products I mentioned.

JSC, I guess in a way I'm calling you out. I do not have anything personal against you. I have something against they way you show up and start acting like your selling us AMWAY with your over the top statements and bizarre numbers about your product that few have seen in stores or anywhere else in the marketplace.

fusion
07-01-2006, 09:02 PM
I see that Red Bull will now be producing Sugarfree in 12 packs. Thoughts?

Mr Zabe
07-01-2006, 09:04 PM
Would that be the 8.2oz cans or the 32oz jumbo cans? LOL

erikaloeckel
09-27-2006, 08:20 AM
hi kc,
since everybody is using very vague sales figures in this discussion, i would be very interessted in an overview of the sales statistics in the last years (worldwide/us/europe) - does anybody know, where to find this info?
thx!
erika

CStoreCatMan
09-27-2006, 06:11 PM
Hmm...don't know. But I've read EVERYWHERE that Red Bull lost about 10 share points last year...I wonder how they're doing YTD.

RedBullFan
09-29-2006, 01:14 AM
JSC, I read the 2nd post and I have disagree with you. RB gets shelf space not to knock out other brands but to grow the category!! I do have to say it has worked pretty well. I see more and more c-stores with a full door of energy drinks.

Another thing you said was if you could see equal shelf space, you wonder how RB would sell. Well in some Safeway cold sets, Monster has more facings! Yet RB still seems to sell very well.

I also have to disagree with the "order takers" comment. After the sales rep sells in the shelf space, the reps need to help the retailer sell more product. IE selling in displays, coolers, secondary locations, etc.

RB does not sell the "buy 10 get 1 free" program like you said. In my area, they do a 15 and 1. And I see Monster and Rockstar deals for 10 and 5. (both sold by the same distributor)

Sorry for ranting, but I had to say my piece.

Ron Swedelson
09-29-2006, 10:01 AM
When I sold Red Bull, the 15 and 1 was only like twice per year, and a display was manditory. Trust me, working for Red Bull is by far not just being an order taker. I felt the same way till I joined up, there is a lot more to it than just selling. Yes, you only have a few skus, so you are not in an account all day, but the ones who just take an order and leave the product, do not last very long.