Analysts Down on Rockstar

After years of massive growth and reportedly reaching the $1 billion benchmark at the end of 2011, Rockstar Energy appears to be falling off the pace with industry leaders Monster and Red Bull, according to analysis provided by Wall Street investment firms.

Over the previous four weeks ending on July 6, Rockstar’s sales in convenience stores have decreased by 5.1 percent, according to Nielsen data reported by Wells Fargo, a financial services company that provides market research.

The same Wells Fargo report notes that in convenience stores over the same time period, Monster’s sales increased by 11.9 percent and Red Bull’s sales increased by 5.6 percent. Although both of these figures are drops when considering the previous 52 weeks in convenience stores ending on July 6 (Monster: 13.1 percent growth; Red Bull: 13.4 percent growth), that performance easily trumps Rockstar’s. Over the same 52-week period, Rockstar’s sales had increased 2.2 percent, compared to the category average of 9.1 percent growth.

Two weeks ago, James Ford, Red Bull’s head of business insights and category development, stirred the pot even more, telling Goldman Sachs beverage analyst Judy Hong in a conference call that he believed Rockstar had been relegated to a regional brand, according to Goldman Sachs.

Part of the problem is that, while Monster and Rockstar continue to innovate at a similar pace, the reach of the bigger company amplifies consumer response to its new varieties.

“[Monster] continues to demonstrate its strong performance in this channel, led by its solid pipeline of new products,” the Wells Fargo report said.

In this year’s first quarter, Monster launched a new 12-pack of 8 oz. cans dubbed “Monster Minis,” which are available in four varieties: Monster Energy, Monster Absolute Zero, Monster Rehab and Monster Lo-Carb.

Even Ford lauded Monster’s Rehab and Ultra line extensions during the conference call, although Rockstar was arguably first to market in both areas.

Rockstar recently introduced “Supersours” in two flavors, bubbleberry and sour apple, as well as a line of caffeinated, flavored waters, but the declining numbers indicate that the offerings haven’t been enough to catalyze the company.