Red Bull Drops Energy Shot

Cola discontinued, too, as company refocuses on core energy drink product

Published in CSP Daily News

By  Steve Holtz, Online News Director & Beverage Editor

SANTA CLARA, Calif. -- Despite a third-place position among energy-shot sales in convenience stores, Red Bull North America will end production of its energy shot, as well as its less-successful Red Bull Cola. "Moving forward, Red Bull North America will sell through existing inventories of Red Bull Cola and Red Bull Energy Shot," the company said in a statement, "but will not proceed with additional production."

The change comes as a repositioning of the company to focus on its energy-drink brand.

"Red Bull has ambitious plans for growth and is well-positioned to [image-nocss] continue the momentum that has led to the brand's dominance of dollar share within the category," the company stated. "Energy is the fastest-growing category within beverage, and Red Bull is delivering the most incremental dollar sales to the energy-drink category, and investing the most into the category than any other player. With that said, Red Bull North America will focus efforts against our core brand--Red Bull Energy Drink."

One retailer's experience with the brand hinted the change may be coming.

"We never picked up the cola and dropped the energy shot at the start of the year," John West, director of sales and marketing for 7-Eleven licensee Alon Brands, told CSP Daily News. "The shot performed well for us, but the local distributors dropped it back then."

Added Lundy Edwards, general manager of Forward Food Marts, "Our supplier has been out of the shots for over a month now, and it never pushed the cola. Although we had it in all last year, it did not show up in the top 80% of SKUs sold in 2010."

According to c-store-specific data from SymphonyIRI Group, Chicago, Red Bull Energy Shot was the No. 3 best-selling energy shot in convenience stores for the 52 weeks ending December 26, 2010, as reported in CSP's Category Management Handbook.

During that year, the brand saw $24.5 million in c-store sales, up a healthy 38% from the previous year, and 8.1 million in unit sales, up nearly 34%. It lagged behind No. 1 SKU5-Hour Energy ($672 million in c-stores sales, up nearly 50%) and No. 2 Stacker 2 6 Hour Power ($26 million in c-stores sales, down 10%).

Despite clear growth and relatively healthy sales, Red Bull North America, Santa Clara, Calif., will pull the plug to remain focused on its core energy drink.

"The energy-drink category and Red Bull have a bright future as the category is still in its infancy," the company said. "Mintel sees the energy-drink category growing to $8 billion by 2015 (70% growth). This is where Red Bull North America will put its focus."
For the week ending June 11, 2011, according to Nielsen (last 52 weeks): Total energy dollar volume was up 13.9%. Red Bull dollar volume was up 14.9%. For dollar share: Red Bull is No. 1 at 39.9 share.

By Steve Holtz, Online News Director & Beverage Editor
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