The small 2oz Red Bull Energy Shots have arrived in Canada. Retailing for a mid-level $3.29 price point, the energy shot sells for cheaper than most other energy shots. This is a surprising pricing strategy to take, since they are the “leader” in energy drinks. At this price point, their profit percentage is likely to be less than that of the other energy shots. But seriously, the energy shots are all over-priced anyway – less product and smaller packages, but the same price as 16oz energy drink.
What is interesting to note is that while Red Bull is the leader in energy drinks as a whole, they have just entered the energy shots category of the market. The leader in this category is Living Essentials’ 5-hour Energy.
At the time of this post, the Red Bull energy shots have only entered the Canadian marketplace for about 4 weeks and have seen moderate success. Almost all other energy shots (Happy Planet shots, Rockstar, Monster, Amped, etc) have not seen nearly as much success as Red Bull in the shots category for a product launch. The sales numbers show that they are selling almost as much as the 5-Hour Energy, whereas other energy shots barely get off the counter and enter the consumer’s consideration set. At the same time, Red Bull’s energy drinks have not lost sales. Red Bull has essentially taken customers away from other energy shot drinkers or grew the shots category, without cannibalizing their current customer base for energy drinks.
An idea for the future: Red Bull should start running a “Mix and Match” 2 for $X promotion allowing customers to choose between both energy drink and one energy shot. This will undoubtedly increase their shots sales and help the shot surge in popularity. Whether this is a fad and is short-lived is still to be seen. Will 5-Hour Energy retain its leadership position in this category, or will Red Bull overtake it and be the energy drink brand for both cans and shots? We’ll have to wait and see!