Red Bull So Yesterday

August 19th, 2009 | Sources: NY Times

How is it that a vile-tasting drink that costs 20 times more per ounce than a Pepsi can generate $700 million in revenues in just its fourth year of sales?

newjoltBecause it contains caffeine. A lot of caffeine.

The so-called “energy shots” are now ubiquitous at convenience stores, especially those located near college campuses or at truck stops.

Students, truckers, construction workers and others need their caffeine after all, and why bother sipping a cup of Joe or being seen with a hopelessly passé 16 oz. canned energy drink when you can slam down a 2-oz. jolt in one gulp? 

“It helps me stay up all night when I have work to do,” University of Maryland sophomore Matt Sporre told the New York Times.

Energy shots cost $3-4 per 2-oz. plastic bottle. At that price, a large bottle of Coke would run $40, a price-point that would humble even Starbucks.

In the face of the explosion, sales of first-generation energy drinks like Red Bull have lost their luster. 

So Red Bull has recently introduced its own shot, as has venerable Coca-Cola. Dr Pepper Snapple will soon have an entry and a raft of smaller companies have flooded the shelves as well.

oldschoolNone of them has managed to steal much thunder from the industry leader however.

Living Essentials, a Detroit-based outfit, still controls 80% of the market with something called 5-Hour Energy.

But why not do something about that awful taste?  “Five-Hour Energy’s not supposed to taste fantastic,” said Joseph Sperber, a spokesperson for Living Essentials.

“This is supposed to be a functional product, not something for flavor or refreshment.”


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