Innovation Drives Energy Drink Market
A NAFFS STAFF REPORT
“Innovation isn’t just a department at Monster Energy, innovation is the core. All things spring from the central concern of innovation,” Geoffrey Bremmer, senior vice president for global innovation at Monster Energy, told attendees at the 105th Annual NAFFS Convention. “That’s because this energy drink market is made-or-broken based on innovation.”
Bremmer discussed the beverage landscape during the NAFFS 105th Annual Convention at the Resort at Longboat Key Club in Longboat Key, Fla. He told attendees energy is #3 at 16.8% of all non-alcoholic beverage sales.
Retail sales of energy drinks are at a high and energy drinks rank third with a 16.8% share of non-alcoholic beverage sales. Innovation, Bremmer said, is driving this growth, adding he emphatically believes the success of Monster, in particular, is due to prioritizing innovation.
He said there are two ways to grow: sell more to current customers or get more customers. Monster Energy, he said, is dedicated to doing both with these two primary approaches.
1) Excite current fans to buy more in many ways, adding new flavors and offering new usage occasions among the most successful.
2) Attract new fans with compelling products for unmet needs.
Innovation happens in many ways, Bremmer said. He gave several examples of product types and use occasions. The Reign brand serves for pre-workout, Monster Hydro for sport hydration occasions and Java Monster is the ready-to-drink iced coffee brand. These products also come in many packaging and positioning formats, including larger or smaller size cans, resealable ends, multi-packs and variety pack configuration.
Functionality is also an important element, and Monster Energy added BCAA’s for muscle recovery in the the Reign pre-workout or electrolytes, coconut water, querecetin and milk thistle for better recovery with the Rehab Monster line.
Monster Energy, Bremmer said, is a do-it-yourself, in-house innovator. No outside incubators are used, no minority investments in other’s ideas. The company, he said, is not dependent on acquisition for growth, which, he added, positions the company well for innovation. In-house teams are asked to develop ideas and pitch them just as an outside company would pitch.
Bremmer said with regard to innovation, it pays to be fearless. “Taking risk and being the only one out there trying this particular version can pay off,” he said. He showed a video taken on a mountainside during an outdoor music festival. It showed one enthusiastic attendee dancing on his own. Lots of young people were watching him dance; none joined in at first. Bremmer said the confidence it took to dance alone and then continue doing so even if the groundswell behind him didn’t look to be forthcoming. The video progressed with a second dancer and a few more sporadically joining in. At last, a slew of people began running toward the small group of dancers until it was a flash mob with the original dancer.
While being first to market with the next big idea is always preferred, Bremmer said, “you may be out there dancing alone. Jumping on a trend right as it’s gaining momentum would be ideal to guarantee success, but it’s nearly impossible,” he said. “You have so many additional things to consider first: retailer/distributor lead times; supply chain; competitor response and saturation; and the timing, often more than two years before launch.”
To help illustrate his point, Bremmer turned his focus to the Monster Energy product line, “Ultra”.
He said this line deliberately has a more approachable design, given that its target market is adults seeking a zero-sugar, easy-drinking, flavored energy beverage with caffeine.
Adding a new item to this line required the product design to be unique and compelling to stand out and gain trial; the flavor name descriptive, so consumers knew what to expect. Most importantly, he said, any new item has to create incremental growth to the company’s existing item assortment.
Two recent launches in the Reign Total Body Fuel line came out in Orange Dreamsicle and White Gummy Bear (which is really pineapple) and they hit Nos. 2 and 4 respectively in sales for the entire performance beverage segment. The team took a chance with flavoring the product line with something new and the response was immediate. The target market being body conscious, the team recognized its consumer was skipping sweets, so dessert-flavored supplements performed well. They determined “functional indulgence” was what was being sought, so they found a way to give it to them in a set of products that were jumped upon, he said.
Of course, the innovation team doesn’t hit it out of the park every time. Bremmer talked about some of the less-successful launches and how they tried to figure out what went wrong. One such flavor was an attempt to launch an exotic tropical flavor, so they arrived at Lilikoi Lychee, which is a combination of an Hawaiian passion fruit and lychee. Research revealed the general population is not familiar with Lilikoi or Lychee, so they weren’t compelled to try them at all, least of all together. So the team pivoted, offering this product only on the fitness channel, online and in Hawaii, where the flavors are familiar to the populations.
Another specifically targeted consumer is those that are seeking a full-calorie beverage. Monster created a full line of products which were created for this consumer in mind. This consumer is not looking for zero sugar or 300 mg of caffeine in a beverage but prefers full flavor and sweeteners. Bremmer said tweaking the products must happen constantly, further highlighting the importance of the innovation team. He added that the team’s research found some flavors don’t work well with juices and that this segment demanded the original Monster energy drink in compelling flavors unique to them, such as:
and Aussie Lemonade,
Kahotic (Tropical Orange)
Papillon (peach nectarine)
These were existing Monster juice flavors and has existed. The task was to launch a full-calorie line not dependent on juice – Monster Reserve. It initially launched in white pineapple and watermelon. The watermelon flavor profile “jumped the shark” so Monster pivoted to Orange Dreamsicle and Kiwi Strawberry which is being rolled out now.
Another area of innovation in full swing at Monster is the addition of a line of alcoholic products. Bremmer said the thinking is that Monster has strong brand affinity in place and a massive fan base of drinking age. “Hard seltzers opened consumer’s minds to new alcoholic RTD options,” Bremmer said. He said his team has a lot of excitement about this crossover and the momentum in the category. After some extensive research, the idea emerged: provide authentic Monster flavor profiles with 6+% alcohol by volume and zero sugar. No energy blend is also needed because companies can’t legally add caffeine to ready-to-drink alcoholic products in the United States.
Bremmer said he views alcohol products as a win-win for Monster because the addition the alcoholic line is wholly incremental to existing business, so there would be no cannibalization to existing line(s). He said the line will include four flavors at first, Scary Berries (which is a red berry inspired by Monster Ultra Red), Mean Green which is an original Monster “Green” as people call it, White Haze which is Monster Zero Ultra and Peach Perfect, all to be called the Beast Unleashed and to be launched in Spring 2023.
Bremmer said concentrating on innovation has proven to be a successful model for Monster and that the firm has shown flavor innovation can carry the day for new beverage launches, adding that paying careful attention to the public response to each can bring great success to a new launch.
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