5 Strategies That Monster Used To Turn $1.7 Million into $55 Billion

Did you know that Coca-Cola, once launched an energy drink, called the “Mother”?

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The original name of Monster’s parent firm was Hansen Natural Corporation, which found its origin in the beginning of a modest juice stand in 1935.

Established by Hubert Hansen and his three sons, it was a small business: the father-son duo travelled around Southern California delivering freshly squeezed, unpasteurized juice to merchants and film studios.

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In the 1970s, Hansen’s introduced a range of sodas as well (that are still sold today), and their stand grew into a full-fledged enterprise.

Shortly after the release of its soda line, Hansen’s was acquired by the California CoPackers Corporation, which renamed Hansen’s to “Hansen Natural Company” (HNC).

Hansen's saw troubled times post this acquisition and didn't recover well

Monster Beverage Corporation was founded by Rodney Sacks and Hilton Schlosberg, who both emigrated to the US in the 1980s.

They bought the Hansen Natural Corporation, which was struggling at the time, for $ 1.71 million in 1990.

Decades later, Monster Beverage Corporation, originally known as Hansen Natural Corporation, launched the Monster Energy drink in April 2002.

The company’s vision was to create a product that could compete in the growing energy drink market, tapping into a growing demand for alternative beverages.

The critical aspect for Monster was to be both like and unlike the market leader and the drink that established the sector, Red Bull.

Monster was also launched as a Caffeine energy drink, to give you a heady boost. The way it differentiated from Red Bull, was that it marketed to a slightly more blue-collar audience and it was value for money.

The Monster “M” logo, resembling claw marks, became an instantly recognisable symbol, embodying the brand’s edgy and bold ethos. The logo was created by designers from McLean Design, a firm that is based in Walnut Creek, California. The firm specializes in both brand and packaging design and has a long list of brands like Coca-Cola that they’ve worked with.

Monster's initial product offering was distinguished by its significantly larger cans compared to competitors, and its blend of ingredients aimed at providing sustained energy.

The genius stroke was that Monster positioned itself as a value option, offering more liquid per can at a price comparable to smaller offerings from competitors. This strategy quickly gained traction, appealing to consumers looking for more value and a potent energy boost.

Monster expanded its product line to include a variety of favours and types, catering to diverse tastes and preferences, it today has more than 40 favours.

Monster became synonymous with extreme sports, sponsoring events and athletes in motocross, BMX, skateboarding, gamers and more.

Aligning with music festivals and entertainment events, Monster built a brand image that resonated with youth.

Over the years, Monster has focused its marketing on the concept of being everything that its customers were.

They based their business model on having influential people who enjoy Monster tell other people to try it. Imagine the winner of a UFC fight holding a can of Monster Energy Drink. By doing this, Monster has allowed the product to be moved by customer interactions and promoted by people who genuinely believe in its success.

In 2011, the brand launched the Monster Energy Outbreak Tour, an annual tour showcasing some of the best new names in hip-hop, EDM, rock, country, and college music.

Some of the most notable artists who played on the tour include Kendrick Lamar, Post Malone, Kane Brown, and 21 Savage.

Monster was distributed by Coke and beer maker Anheuser-Busch, in the beginning. But Coke gave heavy incentives to Monster to go solo with them, and Coke now has a 20% stake in Monster. The deal worked out well for Monster as well because it became an international brand.

Like others in the energy drink market, Monster faced challenges related to health concerns and regulatory investigations.

One of the most significant challenges faced by Monster Energy has been its intense competition with Red Bull, the market leader and pioneer in the energy drink segment.

• Monster had to position itself in a way that appealed to the same core demographic as Red Bull but with a distinct value proposition.
• Building a loyal customer base in the presence of Red Bull’s devoted following was a significant hurdle. This involved not only differentiating its product offerings but also developing a distinct brand personality.
• Red Bull continuously innovated with new flavours and product lines. Monster needed to not only keep pace but also innovate in ways that would make it stand out.
• Monster had to navigate this landscape carefully, ensuring compliance with health regulations while maintaining its brand image.
• Monster Beverage Corporation has also been criticised for its policy of indiscriminately suing companies or groups that use the word Monster, the letter M, or the word beast in their marketing for trademark infringement, despite such trademarks being generally dissimilar or distinguishable from Monsters.

5 Strategies That Monster Used To Ace The Market

1. Effective Brand Positioning: Monster Energy’s decision to offer 16-ounce cans at a price point comparable to the 8.4-ounce cans of Red Bull was a masterstroke. This value proposition appealed to consumers seeking more for their money.
2. Strategic Marketing and Sponsorships: Monster’s sponsorship of extreme sports events like the X Games and endorsement deals with high-profile athletes in motocross and skateboarding to increase brand visibility and brand equity.
3. Product Innovation and Expansion: Understanding the diverse preferences of its consumer base, Monster expanded its product range beyond the original energy drink. By Introducing variants like Monster Zero Ultra, appealing to health-conscious consumers, and Java Monster, targeting coffee drinkers.
4. Understanding the Target Audience: Monster’s marketing campaigns and product designs have consistently resonated with younger demographics. The use of vibrant colors, bold graphics, and engaging social media content has kept the brand relevant.
5. Overcoming Industry Challenges: In response to health concerns and increased regulations around energy drinks, Monster has been proactive in listing detailed nutritional information and advisories on its packaging. The company also engages in responsible marketing practices, ensuring that its products are marketed as adult beverages rather than targeting children.

The company has seen remarkable financial growth.

• It reported a net sales increase from about $2.1 billion in 2012 to approximately $4.2 billion in 2020.
• The revenue for 2022 is $6.22 billion, a bump from its revenue of $5.54 Billion in 2021.
• 90% of the Company’s revenues come from the Monster Energy drink segment, while the rest is earned through Alcoholic and co-branded drink products.

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