Red Bull’s Jon Hughes talkes to ELIT ROWLAND about flavours, price-marks and ‘Me Too’ brands
BW: How is Red Bull working with wholesalers to grow sales?
JH: We take a category approach that focuses on what’s right for wholesalers and retailers – our field sales reps have tools that help depot managers to know how much space, range and focus to allocate to the energy category.
What have been your main achievements in the past year?
In the last 12 months, we have continued to grow within energy, despite the soft drinks category as a whole slowing down. In terms of penetration, 41% of consumers now drink energy drinks, compared with 30% two or three years ago, and there is still huge opportunity for further growth.
How about the biggest challenges?
This category is becoming ever more competitive – there’s been an explosion of new SKUs, flavours and ‘Me Too’ brands. So it’s never been a more confusing time for shoppers and retailers to pick the right range. Sales in soft drinks in the first quarter have also been quite low because of the weather. But we’re rising to the challenge by making sure our prices are right, our distribution is in place and we have responded to consumer demand for different flavours with the launch of Editions.
How do you plan to develop your portfolio in the next six months?
We’re launching price-marked packs across our single-can range this year, based on feedback from consumers, retailers and wholesalers. We’re also bringing some of our marketing properties to our packs to bring a bit of excitement to the category, such as the Jamie Roberts 4-pack and a new Danny MacAskill 473ml can – he’s a ground-breaking trials rider.
How has the launch of Red Bull Editions affected the original variant?
Overall, it is still growing, despite the launch of Editions. It’s a bit too early to find out the impact it’s having on the core energy range, but Editions has been developed to appeal to a different kind of consumer – those that don’t like the taste of energy drinks – so we’re confident it will pull new shoppers into the category.
Is the energy market in convenience being polarised into ‘value’ and ‘premium’, with not much in between?
We’re seeing a lot of volume going through at the value end, but mainstream and premium also play important roles – ultimately, it’s about getting the balance right. I’ve walked into some stores that have three different ‘value’ brands – that’s two-thirds of their fixture!
Retailers should be offering their customers choice, but also look at which products are delivering strong rates of sale and profits, whilst continuing to move the category forward.
With so many suppliers entering the energy market, how will you ensure you retain your position at number one?
We’re investing £20m in marketing and have over 250 projects, from underground music events to cliff diving, planned for this year to make sure that we continue to connect consumers with a great, Red Bull experience. Consumers love our brand which ultimately generates interest in the category and helps it continue to thrive.