The Amazing Story Behind Red Bull

redbull
July 10th, 2008

Few days ago, I read an article about the energy drink company – Red Bull. I was totally shocked and amazed after reading it because I didn’t pay much attention to this company in the past. The only thing I knew about Reb Bull was that it’s an energy drink that can help you stay awake at night. How on earth do I know the story behind this company is so inspiring?


Founding Period

The company is founded by, Dietrich Mateschitz, a former toothpaste salesman. He also had experience selling dishwashing detergents and soap for Unilever, one of the best consumer products brand management companies. It took him 10 years to graduate with a marketing degree in Austria at the age of 28. But that’s not the most surprising part, the surprising part is that “Red Bull” was actually an energy drink selling in Thailand! Also, unlike Coca Cola, the contents of Red Bull are actually not patented. All the ingredients are listed on the side of the can. In other words, this man has turned an ordinary beverage into a billion-dollar brand!

So how did he find out this drink which has changed his whole life? During his sales trip in Thailand in 1982, he learned from a local toothpaste distributor, his future partner, that energy drinks were hot products among people who need to stay awake at night. After Dietrich tried that drink, it totally cured his jet lag.

Since he loved the drink so much and always expected more out of his life, he came up with the idea to create his own business. At the age of 40, he quit his job and started the comany with the local toothpaste distributor. Each invested $500,000 of savings.

Tough Part

However, his entrepreneurial Journey is not as smooth as he expected. Dietrich tried to apply for a license to sell the high-energy drink in Austria but it took him three years and many sales calls to get the license to sell the product.

Moreover, the result of the initial marketing research is not very promising. People hated the taste and thought the drink was too sweet. After losing a million dollar in two years, he still fully believed his company will be successful. Dietrich financed everything without outside capital. He finally realized that the Austria’s market was not big enough for the company to grow. So he decided to expand the business to Hungary, Germany and UK.

Buzz Marketing

After this tough period, the company didn’t have much money left to spend on advertising. Therefore, Dietrich found out that only buzz marketing can increase their sales. He hired students to drive cars with a big Red Bull can strapped on top and asked them to walk around college campuses and gave away free samples at parties and bars.

Red Bull also sponsored exclusive and exciting events that got high and FREE media coverage around the world. It supports around 500 extreme sports athletes who compete in special and often record-breaking events.

So far, it seems his strategy is working pretty well. The energy drink company has 70-90% market share in over 100 coiuntries. In the US, Red Bull enjoyed a 47% share of the energy drink market in 2005. Another surprising fact is that the company only has around 1,800 employees worldwide making the sales volume per employee close to a million dollars. Not bad for a $1.6 Billion company. :)

Dietrich, the only billionaire in Austria, is ranked #260 in the 2008 Forbes’ World’s Billionaires list , with net worth US$4.0 billion. He is an extraordinary entrepreneur “who got rich not by inventing a new product but by selling an ordinary one inventively”. I like the following quote from him a lot:

“If we don’t create the market, it doesn’t exist.”

I think Red Bull is truly a real brand with soul, hisotry & substance.



Sources

The Soda With Buzz – Forbes.com
The Powerful Sales Strategy Behind Red Bull – SellingPower.com

Vincent Chan
Hi, I'm Vincent, co-founder of Primitus. This is my personal blog where I share all of my startup experience and lessons learned. If you think that I can help you on anything, feel free to let me know. Let's keep in touch on Twitter and Facebook. You can also subscribe this blog with RSS.
  • http://hardknoxlife.wordpress.com Dave Knox

    Vincent…great write-up. During college I actually worked for Red Bull as one of their Student Brand Managers as they launched in Ohio. They are an amazing brand and the standards they hold their partners to (bars, etc) are truly first class. Great post!

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