Wells Fargo retail and consumer products analyst Bonnie Herzog ably played the role of reporter today, breaking the news that Monster Energy is planning a 6 percent list price increase to retailers on core products at the end of the summer.
Citing a network of retailer contacts, Herzog sent out a note indicating that the pricing increase, which is not expected to hit Muscle Monster or Java Monster, will take effect on Aug. 31. It matches a pricing uptick from Red Bull earlier this year and, according to Herzog, “the lead time given to retailers… is longer than what is typical, potentially giving retailers a longer opportunity to purchase inventory ahead of the increase.”
Herzog read the move as a confident play by Monster, which recently completed its $2 billion-plus sale of 16 percent of the company to the Coca-Cola Co., Inc.
Fleshing out its new position in the Coke stable, Herzog noted, the energy drink company is planning to introduce a pair of 100-calorie products called M100 in orange and citrus flavors, perhaps as a brand to take on the Pepsi-owned MTN DEW Kickstart juice/energy hybrid.
The extended buy-in period before the pricing increase is a strategic move designed to boost third-quarter sales volume, Herzog posited.