Who Owns Red Bull?

[chuchok]

makes for some interesting reading...

The Soda With Buzz

Clever marketing helped Dietrich Mateschitz turn a so-so beverage into a billion-dollar brand.

Red Bull, the "energy" drink created by Austrian Dietrich Mateschitz, doesn't taste very good. Nor does it sound very appealing: The berry-flavored beverage is spiked with mysterious additives like taurine and glucuronolactone. And at $2 for an 8.3-ounce can, Red Bull's retail price is at least double what you'd pay for a 12-ounce can of Coke. But it does pack some energy. Red Bull, with 80 milligrams of caffeine, has more than double the dose found in the larger Coke serving, and it has 110 calories per serving versus Coke's 140.

Consumers downed 1.9 billion cans of Mateschitz's potion last year, generating just about $2 billion in revenue. By our reckoning Mateschitz's 49% share of the business is worth $2 billion.

Mateschitz, 60, typifies a new class of billionaires who got rich not by inventing a new product but by selling an ordinary one inventively. Donald Trump gets a premium for his Manhattan apartments because he has propagated the notion that a Trump building is superior to comparable property across the street. Sidney Frank made billions by selling Grey Goose vodka, nearly indistinguishable from bottom-shelf brands, at a rich price.

"When we first started, we said there is no existing market for Red Bull," Mateschitz recalls, in a thick Austrian accent. "But Red Bull will create it. And this is what finally became true."

Since introducing Red Bull in 1987, Mateschitz has invested heavily in building the brand. Last year he spent $600 million, or 30% of revenue, on marketing. (Coca-Cola spends 9%.) But unlike rivals who pay millions of dollars for superstars like Britney Spears, Mateschitz relies on cheaper talent: hip youngsters, students and a legion of fringe athletes. Red Bull sponsors some 500 athletes around the world, the type who will surf in Nova Scotia in January or jump out of a plane to "fly" across the English Channel. Every year the company stages dozens of extreme sporting events, like the climbing of iced-down silos in Iowa or kite sailing in Hawaii, as well as cultural events like break-dancing contests and rock music jam sessions. Then there is Hangar-7, an eye-popping structure of glass and steel that Mateschitz erected next to the airport in Salzburg, Austria. The building serves as a chic eatery for club crawlers and provides shelter for the Flying Bulls, a fleet of 15 show planes that appear at air shows around the world. Mateschitz's latest indulgence: the purchase of a Formula One racing team, an extravagance that will absorb $100 million a year to keep on the track while generating only $70 million in revenue.

All these activities are geared to one objective: to expand Red Bull's presence amid a deluge of new energy drinks being introduced by upstarts and beverage behemoths like Pepsi and Coke.

So far the results have been spectacular: In some countries Red Bull commands an 80% market share. In the U.S., where Red Bull enjoys a 47% share of the energy drink market, sales are growing annually at a 40% clip. Last year it sold 700 million cans in the U.S.; this year it hopes to sell 1 billion.

Impressive results for any go-getter, but even Mateschitz would admit he didn't exactly grab his Red Bull fortune by the horns. Raised by two primary-school-teacher parents who separated when he was very young, the convivial Mateschitz took ten years to get through college. "Life as a student is enjoyable," he muses, during a rare interview at Hangar-7. After graduating with a marketing degree from the University of Commerce in Vienna at the age of 28, Mateschitz worked various marketing jobs, including stints at Unilever and Germany's Jacobs Coffee. In 1979 he became the international marketing director for Germany's Blendax (later acquired by Procter & Gamble), where he pushed products like toothpaste, skin creams and shampoo.

It was a job that took him all over the world. In Thailand he discovered the benefits of a syrupy tonic drink sold in pharmacies as a revitalizing agent. After the long flights from Europe to Bangkok, Mateschitz would down the tonic over ice. His jet lag all but disappeared. He decided to study up on the market. "I realized that these little syrups developed in Japan did extremely well all over Asia," he recalls.

By happenstance, a Blendax licensee in Thailand named Chaleo Yoovidhya also owned a tonic drink company. Mateschitz floated the notion of introducing a tonic drink in the West. Yoovidhya loved the idea. In 1984 Mateschitz quit his job to partner with Yoovidhya. Each invested $500,000 of savings and took a 49% stake in the fledgling outfit. They gave the remaining 2% to Yoovidhya's son Chalerm, but it was agreed that Mateschitz would run the company.

[Nordlys]

I was quite surprised to find this vending machine at Den Haag Centraal station (Hague Central Station) in the Netherlands early this year. Since when did they start marketing the product outside Thailand? Do they sell it elsewhere in Europe?

[Soi Mongrel]

It's sold EVERYWHERE now, all over Europe and the US for sure. It's huge. There's even a sugar-free version in the States. It's carbonated everywhere except Thailand, I think, which still has the original syrupy version.

[Nordlys]

It's sold EVERYWHERE now, all over Europe and the US for sure.

<{POST_SNAPBACK}>

Since when???

[Soi Mongrel]

It's really just become a phenomenon in the past two or three years.

[Zarkow]

It's sold EVERYWHERE now, all over Europe and the US for sure.

<{POST_SNAPBACK}>

Since when???

<{POST_SNAPBACK}>

Ehum...it's been sold in Sweden för over 10 years...so, what backwater country do you come from? =)

[Thomas_Merton]

The Soda With Buzz

...

The berry-flavored beverage is spiked with mysterious additives like taurine and glucuronolactone. And at $2 for an 8.3-ounce can, Red Bull's retail price is at least double what you'd pay for a 12-ounce can of Coke. But it does pack some energy. Red Bull, with 80 milligrams of caffeine, has more than double the dose found in the larger Coke serving, and it has 110 calories per serving versus Coke's 140.

...

Anyone know of the medical effects of regularly drinking Red Bull?

[pluto_manibo]

It has been marketed in Europe for over 12 yrs, although it was made illegal in some EU countries, in the 90's. Never had a vodka/Red Bull...try it!

[eddie11]

It's sold EVERYWHERE now, all over Europe and the US for sure.

<{POST_SNAPBACK}>

Since when???

<{POST_SNAPBACK}>

In the late 90's in the UK ,when you walked into any town centre

bar all you could smell was Red Bull (very sickly smell IMO)

[sua yai]

My old employer was exhibiting at a grocery trade show in the UK some 11/12 years ago and red Bull was being launched in the UK there.

A number of scantily clad ladies trooped all over the NEC for three days handing out free glasses of the product.

I reckon everyone was so wired up that not a lot of business got done anywhere except the Red Bull stand!!

[aughie]

I was going to say people mix their alcohol w/ it. It's popular enough.

[chownah]

The Soda With Buzz

...

The berry-flavored beverage is spiked with mysterious additives like taurine and glucuronolactone. And at $2 for an 8.3-ounce can, Red Bull's retail price is at least double what you'd pay for a 12-ounce can of Coke. But it does pack some energy. Red Bull, with 80 milligrams of caffeine, has more than double the dose found in the larger Coke serving, and it has 110 calories per serving versus Coke's 140.

...

Anyone know of the medical effects of regularly drinking Red Bull?

<{POST_SNAPBACK}>

I think the Red Bull company has done extensive research and knows exactly what the long term effects are....but they are keeping it secret....a la US tobacco.

But this is an unsubstantiated rumor which I hope you will spread.

[Heng]

Kidney problems according to many. Unfortunately... nothing scientific has been proven yet. Could make for a good masters thesis. Then sell the results to Dietrich for a nice sum.

[Richard Hall]

The Red Bull success story is indeed a phenomene and I personally consider it an example of proper marketing at its very best.

The owner of the original brand (Krating Daeng, the Thai translation for Red Bull) is T. C. Pharmaceutical Industries Co. Ltd.

Mr. Dietrich Mateschitz required the rights for worldwide marketing of the brand except for the Thai market when the product was established in no other market but Thailand. Means he could certainly get his hands on that deal very cheaply. Then he initated a marketing strategy that was indeed unique and eventually made the brand a worldwide success.

In the Austrian Red Bull company Mr. Mateschitz holds 49% ownership while T.C. Pharmaceuticals covers for the rest. With Red Bull being internationally so successful T. C. recently launched a canned variety under the English name (Red Bull Extra) but other than the Austrian product it is not carbonated and the can design is also different to distinguish it clearly from the Western variety.

Despite all rumours actually the Thai product contains less caffeine because Thai FDA limits the content to 50mg per serving. Back in the past Austria was indeed the ideal place in Europe to start the campaign and set up a production facility because this country has more relaxed food regualtions. The original Red Bull could not be marketed in Germany due to its high content of stimulating ingredients and needed to be adjusted.

Neverheless, Austia remains the hub in Europe for energy drink manufacturing. Besides Red Bull, also Otsospa (maker of M150) produce their Shark brand there and the maker of Power Horse (Spitz) a brand that is very successful in the Middle East has also their facilities there.

As far health is concerned the advice can only be not to overdo it. Caffeine is a stimulant and therefore the consumption should be done with care. Mixing caffeine with alcohol and consuming this blend is big amounts is pretty much like trying to drive a car in first and reverse gear at the same time with is not very recommendable as anyone can surely figure out easily.

Cheers,

Richard

Edited June 13, 2005 by Richard Hall

[Nordlys]

It's sold EVERYWHERE now, all over Europe and the US for sure.

<{POST_SNAPBACK}>

Since when???

<{POST_SNAPBACK}>

Ehum...it's been sold in Sweden för over 10 years...so, what backwater country do you come from? =)

<{POST_SNAPBACK}>

My backwater country is Japan/Thailand.

I must have been to Sweden 3 times in the last ten years but never seen it.

Do they sell it at kiosk/convenience stores?

[Highwayman]

Above is a car l saw in Melbourne recently. Red Bull has been in Australia for about ten years l think and l've seen it all over the world for years now.

[soi lurker]

I think the biggest problem with products like red bull containing stimulants like caffeine and guarrana is the availability to adolescents. This has been documented as being of concern in Australia but, to date, im unsure what has been done about it.

[soi lurker]

Been available here for many years too!

[Soi Mongrel]

It's sold EVERYWHERE now, all over Europe and the US for sure.

<{POST_SNAPBACK}>

Since when???

<{POST_SNAPBACK}>

Ehum...it's been sold in Sweden för over 10 years...so, what backwater country do you come from? =)

<{POST_SNAPBACK}>

My backwater country is Japan/Thailand.

I must have been to Sweden 3 times in the last ten years but never seen it.

Do they sell it at kiosk/convenience stores?

<{POST_SNAPBACK}>

Good God, man...they sell it EVERYWHERE! 7-11's, supermarkets, convenience stores, out of vending machines...

[pyros]

Anyone knows how many cafeine there is in a cup of strong coffee ??? I ask this because i drink quite a lot of coffee and i more than once drink red bull ( with or without vodka ) and there is no efect whatsoever on me . I can drink 10 and go to sleep without any problem . The only problem is when i drink it that my stomach acid goes way over the top ( heartburn ) , but that is from 1 allready .

[Eman]

I was quite surprised to find this vending machine at Den Haag Centraal station (Hague Central Station) in the Netherlands early this year.  Since when did they start marketing the product outside Thailand?  Do they sell it elsewhere in Europe?

<{POST_SNAPBACK}>

I know this is a bit off topic, but this picture of a vending machine reminded me...

I can't remember seeing any vending machines in Thailand.

Just curious as to why ?

[mpdkorat]

I was quite surprised to find this vending machine at Den Haag Centraal station (Hague Central Station) in the Netherlands early this year.  Since when did they start marketing the product outside Thailand?  Do they sell it elsewhere in Europe?

<{POST_SNAPBACK}>

I know this is a bit off topic, but this picture of a vending machine reminded me...

I can't remember seeing any vending machines in Thailand.

Just curious as to why ?

<{POST_SNAPBACK}>

There is a water vending machine not 20 meters from where I'm sitting now.

[Nordlys]

I know this is a bit off topic, but this picture of a vending machine reminded me...

I can't remember seeing any vending machines in Thailand.

Just curious as to why ?

<{POST_SNAPBACK}>

Vandalism and tampering?

And maybe it's cheaper to hire a sales clerk than to buy a machine.

[gburns57au]

The Austrian version has been for sale in Oz for a long time.....the Thai one is banned as is Lipotivhan.....

[Thomas_Merton]

The Soda With Buzz

...

The berry-flavored beverage is spiked with mysterious additives like taurine and glucuronolactone. And at $2 for an 8.3-ounce can, Red Bull's retail price is at least double what you'd pay for a 12-ounce can of Coke. But it does pack some energy. Red Bull, with 80 milligrams of caffeine, has more than double the dose found in the larger Coke serving, and it has 110 calories per serving versus Coke's 140.

...

Anyone know of the medical effects of regularly drinking Red Bull?

<{POST_SNAPBACK}>

I have posted this question here - there are some very interesting answers.

[sadman]

Vodka Red Bull has become one of the 'in' drinks amongst young and old alike in the UK. Some reckon they can't sleep after a session, due to the caffeine, bit I must say I've never had a problem.

My favourite, however, must be the TVR - tequila, vodka and Red Bull. Tastes fantastic, kicks like a mule but bashes the wallet somewhat.

[MP5]

Chaleo Yoovidhya as the the second richest person in Thailand with estimated net worth of over $2billion. Now some of you might wonder who this guy Chaleo is and how come he's richer than PM Taksin (who, for crying out loud, owns a telecommunication empire, launches a few sattellites and even afforded money to buy Liverpool).

Well, it was the Yoovidhya family who founded the "Krating Daeng" energy drink, which eventually become known as "Red Bull" throughout the world.

Chaleo who is the founder, owns 49% of this Red Bull company, the other 49% is owned by the company founded by the Austrian entrepreneur Dietrich Mateschitz, who must be credited for the branding and marketing genius.

Needless to say Red Bull is a very successfull enterprise. The last I've heard they own an F1 racing team!! Dietrich is also the richest man in Austria - smart guy.

Clever marketing helped Dietrich Mateschitz turn a so-so beverage into a billion-dollar brand.

Red Bull, the "energy" drink created by Austrian Dietrich Mateschitz, doesn't taste very good. Nor does it sound very appealing: The berry-flavored beverage is spiked with additives like taurine and glucuronolactone. And at $2 for an 8.3-ounce can, Red Bull's retail price is at least double what you'd pay for a 12-ounce can of Coke. But it does pack some energy. Red Bull, with 80 milligrams of caffeine, has more than double the dose found in the larger Coke serving, and it has 110 calories per serving versus Coke's 140.

Consumers downed 1.9 billion cans of Mateschitz's potion last year, generating just about $2 billion in revenue. By our reckoning Mateschitz's 49% share of the business is worth $2 billion.

Mateschitz, 60, typifies a new class of billionaires who got rich not by inventing a new product but by selling an ordinary one inventively. Donald Trump gets a premium for his Manhattan apartments because he has propagated the notion that a Trump building is superior to comparable property across the street. Sidney Frank made billions by selling Grey Goose vodka, nearly indistinguishable from bottom-shelf brands, at a rich price.

"When we first started, we said there is no existing market for Red Bull," Mateschitz recalls, in a thick Austrian accent. "But Red Bull will create it. And this is what finally became true."

Since introducing Red Bull in 1987, Mateschitz has invested heavily in building the brand. Last year he spent $600 million, or 30% of revenue, on marketing. (Coca-Cola spends 9%.) But unlike rivals who pay millions of dollars for superstars like Britney Spears, Mateschitz relies on cheaper talent: hip youngsters, students and a legion of fringe athletes. Red Bull sponsors some 500 athletes around the world, the type who will surf in Nova Scotia in January or jump out of a plane to "fly" across the English Channel. Every year the company stages dozens of extreme sporting events, like the climbing of iced-down silos in Iowa or kite sailing in Hawaii, as well as cultural events like break-dancing contests. Then there is Hangar-7, an eye-popping structure of glass and steel that Mateschitz erected next to the airport in Salzburg, Austria. The building serves as a chic eatery for club crawlers and provides shelter for the Flying Bulls, a fleet of 15 show planes that appear at air shows around the world. Mateschitz's latest indulgence: the purchase of a Formula One racing team, an extravagance that will absorb $100 million a year to keep on the track while generating only $70 million in revenue.

All these activities are geared to one objective: to expand Red Bull's presence amid a deluge of new energy drinks being introduced by upstarts and beverage behemoths like Pepsi and Coke.

So far the results have been spectacular: In some countries Red Bull commands an 80% market share. In the U.S., where Red Bull enjoys a 47% share of the energy drink market, sales are growing annually at a 40% clip. Last year it sold 700 million cans in the U.S.; this year it hopes to sell 1 billion.

Impressive results for any go-getter, but even Mateschitz would admit he didn't exactly grab his Red Bull fortune by the horns. Raised by two primary-school-teacher parents who separated when he was very young, the convivial Mateschitz took ten years to get through college. "Life as a student is enjoyable," he muses, during a rare interview at Hangar-7. After graduating with a marketing degree from the University of Commerce in Vienna at the age of 28, Mateschitz worked various marketing jobs, including stints at Unilever and Germany's Jacobs Coffee. In 1979 he became the international marketing director for Germany's Blendax (later acquired by Procter & Gamble), where he pushed products like toothpaste, skin creams and shampoo.

It was a job that took him all over the world. In Thailand he discovered the benefits of a syrupy tonic drink sold in pharmacies as a revitalizing agent. After the long flights from Europe to Bangkok, Mateschitz would down the tonic over ice. His jet lag all but disappeared. He decided to study up on the market. "I realized that these little syrups developed in Japan did extremely well all over Asia," he recalls.

By happenstance, a Blendax licensee in Thailand named Chaleo Yoovidhya also owned a tonic drink company. Mateschitz floated the notion of introducing a tonic drink in the West. Yoovidhya loved the idea. In 1984 Mateschitz quit his job to partner with Yoovidhya. Each invested $500,000 of savings and took a 49% stake in the fledgling outfit. They gave the remaining 2% to Yoovidhya's son Chalerm, but it was agreed that Mateschitz would run the company.

For the next three years Mateschitz tinkered with the drink formula and developed a marketing strategy. The Thai drink is called Krating Daeng (translation: "red water buffalo"). But for Western markets and later others in Asia, Mateschitz preferred the name Red Bull. He decided to carbonate the drink to make it more familiar to Western palates and to package it in a slim blue-and-silver can. But he left in place three key ingredients found in the Thai drink: an amino acid called taurine, the caffeine, and glucuronolactone, a carbohydrate. A friend of Mateschitz's came up with the slogan "Red Bull gives you wings."

Before launching, Mateschitz hired a market research firm to test Red Bull's acceptance. The result was a catastrophe. "People didn't believe the taste, the logo, the brand name," he recalls now with a smile. "I'd never before experienced such a disaster."

Mateschitz ignored the research and set up offices in Fuschl, a town just outside Salzburg.

Passing the taste police was only one of the obstacles. Mateschitz needed the approval of the ministries of health in most European countries because some of Red Bull's ingredients hadn't been used in anything else on the market. The Austrian health ministry was the first to grant the okay, in 1987. Powered by a secretary and a six-person sales force, Red Bull began to show up in retail outlets and bars across Austria.

Approval to distribute Red Bull in Hungary and the U.K. soon followed. In 1994 Red Bull entered Germany, where the drink became so popular that the company couldn't meet the demand of nearly 1 million cans a day. Halfway through the first year Red Bull disappeared from the shelves. It was back in stock the next year, but Mateschitz believes the hiccup hurt his market share, even though Red Bull now has a 50% share of the German energy drink market.

From the outset Mateschitz dispensed with TV ads in favor of guerrilla marketing, a tactic that would ultimately become Red Bull's trademark. "We were always looking for a more creative, different point of view," explains Mateschitz. What could be more wacky than Red Bull's Flugtag (flying day) contest, in which people compete to fly the farthest over water in homemade flying machines. He targeted students by paying the trend-setting types to throw Red Bull parties and supplied them with the drink. The company also marketed the drink to bars, which took to using it as a mixer with alcohol.

The marketing gimmicks fueled sales of 1 million cans the first year. But they also piled up a $1 million deficit, financed 90% by the partners' initial capital and 10% by a bank loan guaranteed by a friend. Sales doubled to 2 million cans the second year and doubled again the third year, enabling the company to recoup all of its losses.

Some European countries still haven't approved sales of Red Bull. Denmark and France claim that the drink violates their food regulations. Mateschitz says his executives meet with French authorities ten times a year--so far to no avail. "They can survive without Red Bull, and we can survive without France," he sighs. Meantime, it plans to launch in Japan this year; Dietrich might even alter the formula there because the Japanese have been drinking these tonic drinks for so long.

Can the cult of Red Bull continue? Since Red Bull entered the U.S. in 1997, launching energy drinks as a category, the market has become a $1.7 billion business. Coca-Cola, PepsiCo and Anheuser-Busch have all jumped in, as well as a number of upstart brands like Rockstar, Monster and Crunk, the latter being peddled by Grey Goose entrepreneur Sidney Frank.

Declares Mateschitz: "We created the market. If you appreciate the product, you want the real one, the original. Nobody wants to have a Rolex made in Taiwan or Hong Kong." Yet Red Bull's U.S. market share has fallen from 75% in 1998 to roughly 47% today, a smaller piece of a fast-growing pie. "Coke and Pepsi came from nowhere in the water business to having the top two brands. They could easily become major factors in the energy drink category, too," warns John Sicher, editor of the newsletter Beverage Digest.

So far Mateschitz has been cautious about extending the Red Bull brand. In Los Angeles the company is test-marketing an herbal tea drink called Carpe Diem that's supposed to boost the immune system and improve metabolism. It's been sold in several European countries for a few years but so far doesn't look set to repeat Red Bull's success. Mateschitz also intends to employ the Carpe Diem banner for a chain of fast food outlets offering Austrian and international food packaged in edible "crunchy containers" made out of potato. And he plans to launch a quarterly magazine in Europe filled with stories and pictures evoking the Red Bull world: music, extreme sports, night life, social trends. He bought an island in Fiji from the Forbes family for an undisclosed sum and plans to turn part of it into a resort.

The original Thai formula of Krating Daeng™, "Red Bull" in Thai language has been energizing people for generations. It was developed by T.C. Pharmaceutical Industries Co. Ltd. in Bangkok Thailand where it is still manufactured, and has been recently license to a well known beverage.

Krating Daeng™ is a potent refreshment that combines Vitamin B and two pharmaceutical grade metabolic activators; the natural amino acid Taurine C2H7NO3S and stimulating Caffeine C8H10N4O2 and should be consumed responsibly.

Krating Daeng กระทิงแดง

MP5 Out

-

[rossiok]

Great marketing,in the UK its massive with the high spending "youf".

Promoting "extreme"sports helps as well;Fi,bike racing,ski ing ,surfing,moto x,skateboarding, blah,blah ect

Lippo is better though,brought some back for my mates ,they loved it LOL

[DkinThailand]

Somewhat off topic:

Someone told me M-150 is banned in the west due to whatever ingredients it has. Anybody know this as truth?

I know a few falangs here who drink it instead of Red Bull simply for this 'fact'.

[Soi Mongrel]

Probably just more caffeine than is allowed by law; not sure, though.