How to eat a rival's toast by going one step further in sponsorship.
For decades Coca-Cola established itself as the great brand that it is, among other things, through its omnipresence and creativity in sports sponsorship.
One day in the mid-1990s, however, a small Austrian company called RedBull came along and began to grow rapidly thanks mainly to its sports sponsorship, the very area where Coca-Cola had until then reigned unchallenged.
Such was its growth that by the time CoCa-Cola realised it, RedBull had already grown to such a size that it became unaffordable to buy it. Confident in its economic power and, above all, in its dominance of retail and the Horeca channel, the Atlanta-based company was sure that with its Burn brand it would dominate the Austrian bull and take over the leadership of the burgeoning energy drinks sector.
The typical arrogance of the ocean liners against what they consider mere speedboats made the American giant's managers underestimate the rival and not realise that, no matter how much Coca-Cola they were, they would not be able to beat RedBull, trying to do the same at the level of sports sponsorship. And so it was, despite all the power of its distribution channels and advertising campaigns, Burn never managed to take off, nor threaten the throne of the energy drink benchmark.
Many others tried to replicate and improve on RedBull's giant leap in marketing. We saw the attempts of companies also of Austrian origin such as PowerHorse, others such as Rockstar (now owned by Pepsi) and an endless number of brands of the most varied origins and seriousness, such as Hype, TNT, Leopard, Rich, etc.
None of them succeeded until Monster came along. A brand that only emerged in 2002 from a traditional Californian juice company, which today, with 38% worldwide market share, is hot on the heels of the Austrian Red Bull, which is still the world leader in the segment with 42%.
What did Monster do that the others didn't, and has RedBull rested on its laurels? In reality, RedBull continues to be tremendously profitable, but its growth figures are much lower than those of Monster, which, with a product of very similar taste and content, all they did was to base their strategy on three apparently very simple pillars, but as was later seen to be very effective. They were the only ones among many who knew how to hit the right key!
As I said at the beginning of my reflection, I think the big secret was in their sponsorship strategy, where they did nothing really innovative, as they followed a similar strategy to that of Red Bull, but with some small key nuances where the clear premise of being a turn of the screw more transgressive stood out. Let's look at a few examples:
- Monster focuses on motorsports and eSports. While RedBull is much more diverse and focuses on any sport where there is risk and action, Monster focuses more on transgression, athletes and even controversial territories such as the UFC with Conor McGregor.
- RedBull doesn't use stunning girls in its promotions and when it did use them, it did so in a more subtle or elegant way.
Living in controversy and sometimes fostering the role of 'bad boy' in its sponsorships has undoubtedly been a fundamental cause of its unstoppable rise. The appeal it has aroused among the younger public, where the new and numerous consumers are arriving, attests to this.
Along with the creation and strengthening of the brand, in terms of distribution, they opted for a can size that was twice as large and at half the price; they were not the pioneers in both cases, but they were the most consistent in their application.
They also innovated and were more groundbreaking than Red Bull in their product packaging, with 100% cans personalised with their sponsored athletes and with a variety of flavours and presentations that were much more radical than those of Red Bull.
RedBull, it must be said, continue to be excellent and innovative in their marketing in general and in their sponsorship in particular, but the rise of Monster is a good example of the extent to which a successful and courageous sponsorship strategy can end up threatening territories that are a priori more difficult to conquer.
Incidentally, Coca-Cola, chastened by its initial arrogance towards RedBull, had no choice but to cede its entire portfolio of energy drinks to Monster in exchange for the 20% of the company that it currently holds. Aware that the parent company, in Atlanta, would not be able to provide the start-up mentality that such a dynamic sector requires, it seems that they made good on the premise of allying themselves with the enemy when they were aware of not being able to defeat it.
Good lessons from Monster, no doubt, for the sceptics of sports sponsorship.
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Pablo de Villota
Responsible for Sports Sponsorship Management of PROA