Monster Import and Monster Nitrous to Enter Canadian Market

Monster Energy will be releasing four more new energy drinks into the Canadian marketplace.  The Monster Import and the Monster Nitrous line-up of Anti Gravity, Killer B, and Super Dry will be entering the Canadian beverage market in May 2010.

These energy drinks all have a different appeal to them.  The Import comes in a 550ml can and a patented plastic resealable cap.  This cap is unique because most energy drinks come in aluminum cans with pull tabs and are not resealable, whereas this cap is resealable by a turning motion.  Monster’s tagline for this energy drink is “One Hand, No Hassle” which indicates that the user can just open and close the cap with one hand.  The cap innovation is something totally new to the Canadian marketplace even though it has existed in the United States and Europe for quite some time.  And while the cap itself is innovative, it remains to be seen if the beverage itself actually has a great taste to make it a success.

The Monster Nitrous line-up is also a unique release.  These energy drinks are  also have a resealable cap, but unlike the Import the cap is similar to the Monster 710ml twist caps.  However, this is not the only unique thing about the 355ml energy drink.  The water used to produce the beverage and therefore in the beverage itself is carbonated and – nitrogenated.  Users that have tried the beverage before say there is a foamy top when the drink is first opened and this is a result of the nitrogen.  BevWire isn’t too sure on health aspects, but with regular energy drinks being given a bad name for their adverse health effects, what will the nitrogenated beverage do to consumers?

That said, the energy drink category is constantly innovating to look for ways to build sales.  Overall, this category’s main players have done a lot of innovating lately.  Red Bull has come out with energy shots.  Rockstar Enery has experimented with energy gum and also released two very successful energy drink flavors (Recovery Lemonade and Energy Cola).  And now Monster has come out with their Import and Nitrous.  Consumers are constantly switching to other beverage options to refresh themselves and quench their thirst.  Sometimes the users will switch to a different category altogether like enhanced water or ready-to-drink teas to meet their changing needs.  Therefore, if a category doesn’t innovate to keep up with the consumers changing demands, they are the ones likely to be left out in the dust.

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Segment or Brand – Article From Beverage Spectrum

An online article from Beverage Spectrum’s Gerry Khermouch sheds light on how some beverage categories are strong with opportunity to grow while others just have one strong brand while other competitors barely make a dent (article link here).  In the article, Gerry Khermouch mentions that vitaminwater, 5-Hour Energy, and Gatorade spawned a new beverage category (enhanced water, energy shot, sports drink, respectively) and copycat products eager to captialize on the category have entered the market but without much success.

“It implies that what appears to be abundant opportunity really is a solo success story, and all the pretenders are doomed to exhaust a lot of money, energy and credibility in a fruitless effort. That doesn’t mean there aren’t ways to build off that conspicuous success, but it won’t happen just by throwing your hat in the ring with your own version. ” ~ Gerry Khermouch

The article mentions that there has been success for other brands, but the success has not been easy to come by. Pouring lots of money to market the product doesn’t always bring success either (as seen by numerous enhanced water beverages, energy shots, and sports drinks in the marketplace).  Sobe Life Water, Red Bull, and Powerade have all seen limited success given the amount of resources they have put into growing their brands.  Competing on price doesn’t always help either.  If you have poured significant funding just to enter and compete on price alone, the likely result is that your product is no better than a private label product – so why bother entering the market?

The real opportunity to gain market share would be through innovation.  Innovation either improves on a beverage already on the market, or launches a new category altogether to meet a previously unmet need.  Let’s use the energy drink category to draw examples from.  Jolt Cola and Red Bull.  While Jolt Cola entered the market first in 1985 with their offering, Red Bull came in two years later with their version of an energy drink.  Red Bull improved on areas where Jolt Cola was lacking and quickly gained the majority of the energy drink market.  Jolt Cola may have contained more caffeine, or Red Bull’s marketing expertise helped them gain the leadership position.

Or Red Bull and 5-Hour Energy for another example.  Red Bull may have been the first to launch an energy drink and grow the category, but 5-Hour Energy innovated and spawned a segment within the category.  While other energy drinks entered the market to compete against Red Bull in the cold vault and cooler doors, 5-Hour Energy developed a small energy shot that was located at the till rather than where the rest of the energy drinks were.  Customers shopping on impulse would still see 5-Hour Energy at the checkout counter after the rest of the energy drinks are left behind in the cold vault.  As the article mentions, Red Bull’s energy shot offering is still fighting to gain significant market share.

As Gerry Khermouch says, “Healthy skepticism must be maintained about brands that are just expecting to cruise down the roads carved by segment pioneers.” You just cannot rely on your brand name to bring you success.  The beverage company has to work on developing a great product through innovation and market it properly in order to succeed.

Beverage Category Growth and Decline for 2010

Just scouring through some newsfeeds these past few weeks, and came across a BevNet article (link here) sourcing Beverage Digest on the beverage industry’s growth and decline.  The article is general and talks about the North American landscape, which normally focuses more on the United States than Canada.  The main point of the article hints at consumers shifting their interests away from CSDs (Carbonated Soft Drinks), where there has been decline in the past two years.  The only growth seen is within the diet CSD beverages.  After seeing that post, BevWire found some Nielsen statistics relating to the Canadian beverage industry and compares how Canadian consumers fare to the rest of North America.

Carbonated Soft Drinks (CSD) as a category saw decline in overall volume, but diet beverages grew.  In the last year, regular CSDs sold 1.6 billion cases less than the previous year while diet CSDs sold 4.4 billion cases more during the same time frame.  These numbers represent a 0.2% decline in regular soft drinks, and a 1.1% increase for diet products.  It’s also interesting to note that while regular cola beverages shrank 1.6 billion cases, the dollar value did grow.  Regular CSDs saw total dollars increase over 5%, while diet total dollars increased 7%.

So what does this mean?  This means that even though less soft drinks were being sold, prices were increased to soften the losses.  1.6 billion less regular soft drink cases were sold, yet total dollars increased 5%.  And diet products are becoming more of a popular choice for consumers, where diet soft drinks now represent over 37% of the total CSD market (compared to the United States where it is 30%) .

If beverages are not growing for CSDs, where have all the growth gone?  After all, people do have to drink something, right?  Well, the numbers seem to indicate that healthier options are the preferred choices now.  Juices and juice drinks demands (ie. Minute Maid, Tropicana and Dole juices) have increased dramatically this past year, where sales have increased dramatically.  Think this has anything to do with Sobe re-launching their juice drinks, or Fuze releasing a few more new flavors?

Surprisingly enough, the diet trend extends across to other beverage options.  While energy drinks are now on a slower increasing rate (and some other reports have it actually shrinking in the market), diet energy drinks did grow.  So no matter what the consumer is looking for – energy drinks, soft drinks, juices – they are looking for more healthier alternatives that have less calories.