Red Bull Market Analysis

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Market Analysis
Red Bulls are competing in the non-alcoholic beverage market and in the specific segment of Energy Drink.

The segment only occupied 1% of the Australian’s non-alcoholic beverage market (in 2004). However, it is dominated by 2 main companies that are Red Bull and its rival V. The following table is the actual volume and value of this segment.

Figure 1: Energy Drink Segment actual volume and value size
The energy drinks market after initial fast growth gave signs of some declines. This is most likely to be reversed, with growth coming back in Energy Drink Segment.  

Figure 2: Australian’s non-alcoholic beverage growth rate
In comparison with other segments, the Energy Drink appears to have rather high growth rate (13.6%) seconds only to fruit and tea drink. “Both market leaders invest heavily in marketing,” said Red Bull’s Ms Aldridge. “In fact, Red Bull’s marketing investment for 2007 will reach record highs and will be increased to $33 million. This is an increase of 38% on 2006 and 65% on 2005.” As well as ‘above-the-line’ advertising, Red Bull marketing dollars are continuously invested into consumer-focused events such as F1 and the Red Bull Air Race. It also invests in a sampling program and has found multi-buy promotions, whereby customers might buy two Red Bull cans for $5, or two Red Bull bottles for $6, to be highly effective. Ms Aldridge also hopes that the launch of the Red Bull 355ml can earlier this year will further increase convenience store sales and profits. “Red Bull is consumed throughout the day and night with a higher proportion in the afternoon and evening, so it is a good idea for store owners to check their stock levels at this time to avoid potential out of stocks and missed sales opportunities,” Ms Aldridge said. Despite only occupying only a small segment in the beverage market, this is an interesting segment to be considered for investment.

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