Monster also contracts with Anheuser-Busch in the US and Brazil.Ĭoca-Cola only has four energy drink brands: Full Throttle, NOS, Power Play, and Mother, which comprise a tiny fraction of Coca-Cola's portfolio of over 3,500 beverages.
Interestingly, Coca-Cola is not only a rival but also a distributor of Monster drinks in the US and Canada. Its only competitors that have similar global reach are Coca-Cola ( NYSE:KO) in 200-plus countries, and PepsiCo ( NASDAQ:PEP), which is also in over 200 countries. Monster has been growing globally and is now in 90 countries. In 2012 Monster moved into Japan and Brazil, and expects to enter the Indian market soon. Its latest 10-K notes that Monster Energy drinks represent 92.3% of sales and are available in over 40 different varieties. Monster also has many different beverage brands like natural sodas, juices, teas, and functional waters in addition to its energy category, but these still represent a fraction of the business. These line extensions also helped expand Monster's gross margin from 51.8% to 53.3%. Sacks surmised that Monster's success was due to product line extensions of its higher margin new products Ultra Zero, Ultra Blue and Rehab Pink Lemonade. Smaller players in the space like Rockstar, 5-Hour, and AMP are all seeing sales declines with a seeming duopoly of Red Bull and Monster shaping up. Monster now has 34% share compared to Red Bull's 35.4%, according to Nielsen. The state of the competition However, the best news from the call was that the company is close to overtaking privately-held Red Bull in US market share.
But it certainly won't be at the rate over the past couple of years." As we're focusing on the existing markets we're in, we will still expand. ".expansion into newer markets is probably slowing a little bit. "Our revenues were affected by less robust growth rates for the energy category as a whole and Monster Energy, in particular, in our principal market, the United States, as well as in Canada and Mexico in the second quarter less robust growth of the energy category overall in Europe, the Middle East and Africa." CEO Rodney Sacks said on the second quarter call in August: Sales of energy drinks overall have been affected by health and safety concerns. In the second quarter the company's bottom line was hit with expenses of $4.2 million to defend the brand's safety record. Growth slowing and legal wrangling Monster Beverage boasts 20 years of gross sales growth, but has recently been beset by legal and regulatory challenges. Zum XR's advantage is its time release soluble beads of caffeine, which provide a smooth release of the energy components to avoid the "crash" that other energy drinks have. According to an interview with Zum XR's founder Bob Niichel in Beverage Daily, this product had one of the most successful beverage launches ever at Whole Foods. Zum XR's biggest retail outlet is Whole Foods Market in the western US. Zum XR, launched in April 2012, is an energy drink featuring time-release caffeine, and is gaining shelf space in retail outlets like bicycle stores, athletic clubs, GNC's, and convenience stores. The newest threat to Monster Beverage ( NASDAQ:MNST) is in stores, and will soon roll out nationwide.