Energy-Drink Upstarts Are Sapping Monster's Strength
17 Abril 2019 - 6:29AM
Noticias Dow Jones
By Jennifer Maloney
The king of energy drinks is in need of a boost.
Monster Beverage Corp. is losing market share, fighting in court
with an upstart competitor and trying to stop its biggest partner
-- Coca-Cola Co. -- from releasing an energy version of Coke.
Now Keurig Dr Pepper Inc. is jumping in with an energy drink
developed by Lance Collins, the entrepreneur behind successful
brands including Fuze tea, BodyArmor sports drinks and Core bottled
water. His new drink, Adrenaline Shoc, is meant to appeal to
consumers looking for less sugar and more natural ingredients, Mr.
Collins said.
"Traditional energy drinks have ingredients that you can't
pronounce: glucuronolactone, inositol, taurine," he said. "We took
all those things out."
It is a consumer shift that beverage industry analysts say
Monster has struggled to address.
Monster accounted for 41% of energy-drink sales in American
retail stores in the four weeks ended April 7, down from 45% a year
earlier, according to an Evercore ISI analysis of data from IRI, a
market research firm. Meanwhile, a new entrant called Bang has
quickly captured about 9% of the market.
A Monster spokeswoman referred to its previous comments,
criticizing Bang for "false and unsupported" health claims. At an
investor meeting in January, Monster CEO Rodney Sacks said
fitness-oriented energy drinks like Bang will end up expanding the
category, allowing Monster to continue to grow.
Monster is touting a new brand called Reign, which contains
coenzyme Q10, a dietary supplement taken for heart health. "Will we
have competition? Sure, we will. But we've had competition before,"
Mr. Sacks said in January. "Ultimately, we're confident about the
ability of Monster to continue to grow and the ability of Reign to
participate in that space."
The Monster brand has nothing to do health and wellness,
Evercore ISI analyst Robert Ottenstein said. "Monster recognized
that to their credit. They recognized that they couldn't use the
Monster trademark to go after Bang. The question is are they going
to be able to do it? There's a whole new wave of brands with
authenticity in the fitness space."
Other players are crowding into the category: Anheuser-Busch
InBev SA in 2017 bought organic energy-drink startup Hiball Inc.
And Amazon.com Inc. just launched its own energy drink under its
Solimo brand.
Coca-Cola, which owns an 18.5% stake in Monster and distributes
the brand through its bottling network, has developed a drink
called Coca-Cola Energy that is already being introduced in Europe.
Monster says the move is a violation of an agreement the companies
struck in 2015; they are in arbitration.
Bang also has drawn Monster into a fight. In September, Monster
sued Bang's parent company, Vital Pharmaceuticals Inc., alleging
that it doesn't contain creatine, the ingredient it touts
prominently on its cans, and that the company had made false health
claims about its product. Monster also raised concerns about those
health claims with the Food and Drug Administration, according to a
person familiar with the matter. Monster's March launch of Reign
was a parallel attack on Vital, with the new brand's packaging and
flavors closely mirroring Bang's.
Vital has sued Monster alleging trademark infringement and
refutes Monster's charges.
"A meritless and frivolous lawsuit has no chance to prevent the
inevitability of Bang's meteoric rise to the top," Vital said in a
September news release. "Consumers choose Bang because it's more
effective, tastes better, and doesn't contain harmful amounts of
sugar and ingredients like D-glucuronolactone contained in
Monster."
Monster called Vital's trademark suit a bad faith attempt to
slow its Reign launch.
Keurig Dr Pepper has taken a significant minority stake in
Adrenaline Shoc with a path to ownership and will distribute it
nationally. Terms weren't disclosed. The deal comes unusually early
in the brand's development. Typically startup brands build sales on
their own before striking a national distribution agreement. This
one has yet to appear in a single store. Keurig plans to launch it
in June.
With the energy-drink category fragmenting, Keurig Dr Pepper
said it wants to offer consumers a range of options. It already
owns two small traditional energy-drink brands and earlier this
month said that it would distribute Runa Clean Energy, an organic
energy drink with caffeine derived from the Guayusa leaf. Runa is
owned by All Market Inc., which also owns Vita Coco coconut
water.
Adrenaline Shoc has no sugar and contains caffeine derived from
green coffee beans, yerba mate, coffee-bean fruit extract and
guarana.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
April 17, 2019 07:14 ET (11:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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