1. Write a summary of the red bull case. 2. Complete a SWOT Analysis. 3. Write a list of problems that red bull has. 4. Describe the sales performance of brands in the energy drinks market as outlined in Table 1 in the Red Bull case 5. Include a forecast for the sales for the next years for all brands involved. RED BULL AND ENERGY DRINKS 2010 Marketing Events and Budgets The bulk of Red Bull's marketing, sometimes estimated at 40% of sales, focused on sponsoring events called "Red Bull moments." Many had the potential to attract large crowds of young people and/or garner public relations exposure, as with the proposal to take Austrian daredevil Felix Baumgartner up 120,000 feet and drop him, to break the record for the longest free- fall skydive and to be the first human to break the speed of sound in a free-fall. Red Bull sponsored air races, auto racing, soccer teams, and the ever-popular Flugtag series. Red Bull also spent considerable amounts on advertising: $50 million in 2009, down nearly 30% from the $70 million it spent in 2008, according to Nielsen. Category Growth and Shares International expansion was a strong source of growth. In 2009, Red Bull had boosted sales in the Far East by 43%, with strong growth also reported in the French, Brazilian, and German markets. The following year, Red Bull announced plans to expand further in Africa, Russia, India, and Japan. Sales of the leading brands in the United States appeared to be slowing by the end of 2009, but the category reported strong growth in 2010, probably spurred by energy shots, a new two-ounce product form pioneered by 5-Hour Energy and quickly adopted by major competitors. According to Nielsen, for the 13 weeks ended September 25, 2010, in all outlets combined (convenience, grocery, drug, and mass merchandise, excluding Wal-Mart), sales in the energy drink category, including energy shots, increased 14.9% versus the same period a year prior (Table 1). Table 1. Top three brands of energy drink, U.S. case sales, per Beverage Digest (in millions). Brand 2006 2007 2008 2009 Hansen's Natural 58.6 79.1 79. 87.7 Red Bull 53.7 63.9 67.2 68.0 Rockstar 31.4 43.6 39.8 37.4 5-Hour Energy created the new category, which led to its dominance. The product promised fewer calories, natural ingredients, vitamins, and other nutrients for longer-lasting energy without a sugar crash. The product's small size allowed it to avoid crowded shelves and refrigerators and be merchandised near cash registers, next to lighters and key chains; independent distributors started peddling the product to convenience stores as well as retailers such as Dick's Sporting Goods, Home Depot, Kroger, and Wal-Mart. By 2010, $60 million of advertising had generated sales of approximately $300 million.1 Monster was also expanding beyond the United States and sponsored motocross races, among other events. Hansen had a distribution agreement with Coca-Cola in Europe, but according to UBS analyst Kaumil Garjawal, the company was careful to avoid over-distribution before regional marketing plans were in place. 2011 and Beyond? Not everyone was optimistic about the future of energy drinks, despite strong growth in 2010. Research from Mintel indicated that marketers might be failing to grow the pool of interested consumers. According to its survey data, 74% of consumers said they hadn't consumed energy drinks or shots in the previous three months, and 69% of these said they were not interested intrying them, citing high prices (48%), too much caffeine (43%), and a general feeling that energy drinks/shots just were not good for you (43%). In addition to new product packages and formulations, the category sparked opposites. Slow Cow, an "anti-energy" drink, promised to address hyperactivity, anxiety, and the jitters while increasing mental awareness with theanine, chamomile, valerian, passiflora, and other ingredients with calming effects. Hansen's promised to launch Monster M3, a highly concentrated energy drink in a five-ounce glass bottle, as well as original and extra-strength versions of a new two-ounce energy shot, WORX. AriZona, the leading ready-to-drink tea, partnered with longevity and lifestyle expert Oz Garcia to create two innovative, healthy FastShot formulas, A.M. Awake and P.M. Relax, as well as RX Energy Fast Shots, made with a green tea base and a proprietary performance blend of vitamins and herbs, including milk thistle, taurine, and B vitamins