Trying to do it is expensive and risky. Failure is common. But Red Bull, the energy drink, has succeeded. From its base in that global economic category killer, Austria...
So, out of all the global corporations that are scheming and laying out tens of millions to come up with the next dominant concept, why Red Bull? Timing. Technology. And guile.
The drink was formulated and introduced just as Gen Y, the so-called 'Echo Baby Boom,' was emerging from tween-hood. It is a slightly smaller demographic bulge than its Baby Boomer parents, but still potent in terms of numbers. Technology, eg, the 'net, provided the opportunity for viral marketing that had simply not existed previously. Guile came in the form of capturing the generational conflict. It's dangerous. Your parents and teachers dont like it. Experts have concerns. Talk about the perfect selling proposition to teens and young adults.
This sort of success does not just happen. Businesses have to develop markets and have the operational sophistication to satisfy them when they emerge. Marketing has to focus on a theme and hit the right pitch. And management has to be able to adapt. In Red Bull's case, though originally designed for a younger market, ageing adults represent the world's largest population segment. As they get older, they look for fresh sources of energy. And Bingo.
In fact, there are many similarities between the success of mobile technology, social media and Red Bull in terms of their bifurcated appeal to young and old. Both started on the fringes and are now central in their place. And that suggests where you should be looking if you are seeking the next big thing. JL
Sheila Shayon reports in Brand Channel:
Red Bull is the most popular energy drink in the world with 3 billion cans sold annually and a cultish following that consumes the hosted events and sponsored contests the brand promotes through celebrity, videos and videogames and a tagline that says, "Red Bull gives you wings.”
Dietrich Mateschitz, CEO and founder of Red Bull GmbH, is captain of the $5 billion-a-year beverage empire and one of the most successful entrepreneurs on the planet today, yet remains under the radar outside his native Austria for a man whose product and tactics revolutionized the beverage energy and sports marketing.
Red Bull is a sprawling, privately held enterprise that embraces everything from sports teams, four in soccer, New York's Red Bulls (and the stadium), Red Bull Salzburg, Leipzig and Brasil, to two Formula 1 racing teams and one Nascar team.
The crown jewel of the kingdom is the Red Bull energy drink oft referred to as ‘liquid cocaine’ or ‘speed in a can,’ a carbonated drink made primarily of caffeine, amino acid called taurine, and a carbohydrate called glucuronolactone sold in a distinctive eight-ounce can with an enduring logo.
Mateschitz’s creation borrowed from a Thai energy drink Krating Daeng, which he discovered on a trip there in 1982 when he was international marketing director for Blendax, a toothpaste company and imbibed the drink which cured his jet lag. He modified the recipe for western consumption and launched it in Austria in 1987.
When Red Bull first gained traction in the early 1990’s, embraced by the hard-core party scene in Ibiza, the brand did nothing to quell rumors that the seminal ingredient taurine…came from bull semen or testicles as tales of the drink’s powers spread world-wide.
In the U.S., students of all ages were instant fans. "In the beginning, the high-school teachers who were against the product were at least as important as the students who were for it. Newspapers asked, 'Is it a drug? Is it harmless? Is it dangerous?' That ambivalence is so important. The most dangerous thing for a branded product is low interest," said Mateschitz in an extensive article in Bloomberg Businessweek.
“We expected it. It was a part of the strategy from the beginning. We would make the brand interesting enough that people wanted to get their hands on it."
And they did. According to AdBrands.net, “Since its European launch in 1987, the sickly sweet stimulant has carved out a whole new niche of "energy drinks" forcing soft drinks giants Coke and Pepsi to play an undignified - and so far largely unsuccessful - game of catch-up. Meanwhile, Red Bull itself is approaching megabrand status, with retail sales of around $11bn.”
It’s fair to say that Red Bull reinvented the sports marketing landscape by creating properties unique to the brand. The company sponsors some 500 athletes in 97 sports, many so extreme that three have died in the last two decades. Unconventional in all business dealings, the athletes are called "family members" and don’t have contracts per se, but agreements of ‘support.’
Its event marketing is impressive: Red Bull Crushed Ice Series, Red Bull X-Fighters World Tour in 2010 and Red Bull Cliff Diving World Series are examples all events invented by the brand, and endorsing players began in 2009 with Chicago Bears’ Kevin Hester and New Orleans Saints’ (now Miami Dolphins) running Reggie Bush and the roster now includes soccer star, Thierry Henry, skateboarder Ryan Sheckler and skier Lindsey Vonn.
Videos like this one with Ryan Doyle, among the world’s most innovative free runners and parkour artists, is the apogee of Red Bull’s acumen in producing high-quality branded content that embraces core brand attributes:
Mateschitz is now reaching more deeply into his next territorial imperative, media. Augmenting earlier forays, ESPN’s No Limits, the film That's It, That's All, and scores of web videos, Red Bulletin, is 98-page monthly glossy launched in the U.S. in May, (as well as seven other countries) selling for $4.99 at newsstands. The Red Bull logo is ubiquitous in the photos and stories of sponsored athletes.
Think of it as extreme branded content. “The perception is that there is content and there’s advertising. We’re challenging that perception that the media industry is still holding on to. The audience grows up and understands their athlete has brand logo stickers all over the board and the helmet, and that’s OK. If the end result is a good piece of content, parsing where it comes from is missing the point,” commented associate publisher Raymond Roker to Adweek.
In August, the brand released its first feature-length theatrical documentary on snowboarding, The Art of Flight, featuring Travis Rice. MTV Real World’s producers, Bunim/Murray Productions, are developing reality TV concepts for sponsored athletes, all output from Red Bull Media House.
Mateschitz told Businessweek this multimedia push is "our most important line extension so far. As a major content provider, it is our goal to communicate and distribute the 'World of Red Bull' in all major media segments, from TV to print to new media to our music record label,” and that "the total editorial media value plus the media assets created around the teams are superior to pure advertising expenditures."
A decade ago, a Fast Company article by Marc Gobé, then president and CEO of the desgrippes gobé group, wrote: "The beauty of Red Bull is that it's the antibrand brand. Red Bull doesn't have any of the commercial trappings of a traditional, off-the-shelf product. It's underground, even when it's above ground and that appeals to the young people who drink it."
One core product, one enduring logo, savvy sports marketing and a leader who has always seen his energy drink as part of a larger philosophical endeavor and mission: "It is a must to believe in one's product. If this were just a marketing gimmick, it would never work," as Mateschitz says.
One of his few unrealized desires is to have his own Red Bull country, one in which “Nobody tells you what you have to do—only what you don't have to do."
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