Red Bull clarifies cola plans; industry insiders, watchers doubt success

, BevNET.com staff writer.

 

This Red Bull won’t give you wings.

That’s the message the company provided yesterday as it clarified its description of the just-announced Red Bull Simply Cola. With only 32 mg of caffeine in an 8 oz. can, the product will have only slightly more kick than any other soda.

As an energy drink, Red Bull has long been the leading brand. But with the company making it clear that its natural cola will focus on taste rather than functionality, industry skepticism ratcheted up another turn.

Scott Van Winkle, managing director of equity research with the Vancouver-based Canaccord Adams financial services firm, said he was skeptical about Red Bull’s hint that they may try to land their product on Whole Foods’ shelves.

“There is a very, very, very small likelihood that a core natural food retailer would take a Red Bull branded product,” Van Winkle said.

Additionally, while Red Bull may have a positive reputation in mainstream channels for providing energy, Van Winkle said natural food customers have a negative perception of the brand. Hyped caffeine levels and artificial colorings don’t quite fit the natural foods mold. Van Winkle said Whole Foods may be more likely to pick up a mainstream brand than other natural retailers, but even that natural food giant would bow to the will of their customers.

Van Winkle held only slightly higher expectations for the product’s success in mainstream channels.

Several companies have introduced natural cola products before, and none of them have crossed the threshold from niche product to cooler case regular, Van Winkle said.

“I just don’t think natural soda is on the tip of people’s minds as a [healthy] alternative to Coke or Pepsi,” he said.

The cola may even fail to sway brand loyalists.

Greg Racine, a full-time college student in Boson that lives in one suburb and works 20-30 hours per week in another, said Red Bull and coffee are important parts of his life.

But his brand loyalty, he said, would not lead him to try Red Bull’s all-natural cola product. Even though he said he avoids other energy drinks, he views Red Bull as “just something to make it through work,” and not a brand he looks to for taste.

Still, the all-natural badge may entice some shoppers to give the product a chance. Ken Weeks president of Liquid Access LLC, said the natural formula “[has] got to be better for you than Coke or Pepsi.”

However, as someone who grew up in America’s Bible Belt, he said he didn’t think people in that region would respond well to Coca leaf as an ingredient

Regardless of the product’s success, Red Bull isn’t the only mainstream beverage company to attempt a natural-soda launch. Last month, Pepsi launched Pepsi Raw in the United Kingdom.

According to Bill Bruce, the publisher of the UK-based magazine Beverage Innovation, the product launched exclusively in nightclubs and bars, and there is currently no sales information available.

Even if Red Bull Simply Cola manages to unite the mainstream and natural foods channels, it could be a while before most U.S. consumers see it. The product will launch in the U.S. market initially in Las Vegas – which Red Bull said they are not treating as a test market.

“We are launching in Las Vegas only, at this point, due to limited product availability,” Radden said. “We simply don’t have enough ingredients to produce the quantity needed for a full U. S. launch.  However we will be rolling out Red Bull Cola nationally later this year.”