As The Coca-Cola Company makes room for Monster on its trucks, the soda giant is also making space for the baggage the brand brings with it. Yesterday The Wall Street Journal explored several controversies surrounding Monster (and the energy drink category on the whole), as it transitions its distribution over to Coke’s unrivaled global system.
The transition follows Coke’s purchase of a 16.7 percent stake in Monster last August which followed years of careful consideration. A WSJ source close to Coke told the publication that the company opted for a minority stake to “[protect] the brand and image of the company.” The belief is that by not purchasing Monster outright, Coca-Cola can at least partially shield itself from the negative press that has plagued the energy category. In doing so, Coke is able to reap the massive distribution profits of carrying Monster on its trucks while allowing the brand the freedom to continue engaging in the marketing tactics and strategy that has made it a powerhouse.
But the concerns surrounding the safety of energy drinks don’t appear to be going away anytime soon, and Monster’s damage control efforts haven’t come cheap. Last year, the company reported $43.8 million in professional service expenses, which includes legal expenses, compared to $38.7 million in 2013 and $19.7 million in 2012. The company ramped up lobbying efforts a few years ago as well.
Last month Monster settled two separate wrongful death lawsuits related to the 2012 deaths of a 19-year-old man in California and a 42-year-old man in Missouri. The company is scheduled to go to trial in August in the civil case of Anais Fournier, a Maryland teen who died of cardiac arrest in 2011 after consuming two Monster beverages within a 24-hour period. The brand has also been under fire for marketing to children under the age of 13, despite its assertions to the contrary.
But despite its adversaries, Monster continues to swell, increasing its revenue in 2014 by 9.7 percent to $2.46 billion. So Coca-Cola’s still putting its money on the beast. The partnership deal is expected to close in the second quarter of 2015.