Red Bull fuels the fire of the Cola War

May 26, 2008

Mateschitz's energy drink pioneer company, Red Bull, hopes its new Red Bull Cola, which debuts in Las Vegas in June, will grab a larger share of the mainstream crowd.

The editor of Beverage Business Insights in New York, Gerry Khermouch, recently said "If, as energy drink proponents have been saying, energy drinks are the new colas, then it's perfectly logical for Red Bull to try to reinvigorate the declining cola segment."

Unlike Pepsi and Coca-Cola, Red Bull Cola will enjoy a 100% natural image and command a premium price. Its formula will consist of kola nut and coca leaf.
The debut comes as Red Bull has fallen behind Monster Energy as the top energy drink in term of volume, according to Beverage Digest. Monster Energy owns 27.6% of volume compared to Red Bull's 24.6%.
Beverage Digest editor, John Sicher, said "Red Bull is a very strong brand and it has an enthusiastic following but the cola business in the U.S. is in decline. Even with their brand strength they will face headwinds after some probable initial excitement."
Indeed, the realm has fallen considerably from its golden era. Still according to Beverage Digest, carbonated soft drink sales dropped by 2.3% in 2007. Colas, which makes up more than half of soda sales, shrank back by 7.7%. Atlanta's Coke company volume was off 3% while Pepsi's was down 4.8%.

Nevertheless, unlike many other beverage brands outside the Coke and Pepsi domination, Red Bull does enjoy the advantage of an already existing strong distribution. That shall be a big difference between Mateschitz's Red Bull Cola and Branson's ill-fated Virgin Cola, which never established a decent route to market in two tries.

"The cola from Red Bull. Strong & natural" Red Bull spent, in 2007 alone, $82.5 million on media and marketing materials in support of beverages and events. However, the budget for the launch of Red Bull Cola has been made public.

Red Bull Cola will be available in 8.4-oz. cans at bars, club and restaurants, as well as 12-oz. cans at convenience and grocery stores. Pricing has not been revealed yet.