Updated: Rockstar Says Promotion Juiced Competitors’ Share, Innovation on the Way

Note: This story has been edited to include comments from Rockstar that were not in the initial story. The original story can be found here.

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 of June convenience store numbers 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.

According to Joey Cannata, Rockstar’s EVP of Sales and Distribution, however, much of that separation is coming from increased promotional activity on the part of Red Bull and Monster.

He said that the two companies have engaged in much heavier and more frequent promotion in 2013 when compared to the previous year, increasing their growth.

“Rockstar has maintained a very similar promotional pattern when compared to last year,” Cannata said.

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. Rockstar was first to market in the rehab space with Rockstar Recovery, although that product line has been eclipsed by Monster Rehab.

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.

That may change soon, however, according to Joey Cannata, Rockstar’s EVP of sales and distribution. Two weeks ago, the company began testing its own two-SKU Zero line — Rockstar Pure Zero — in Northern California and the Pacific Northwest. There are high expectations for Pure Zero in the second half of the year.

“Initial results have been off the charts,” Cannata said, adding that a national launch in 7-Eleven is coming soon, along with a two-month buy-one-get-one-free promotion that will run from Sept. 4 through Nov. 5.

“We expect that to positively increase our share and volume in the small-format channel,” Cannata said.