There’s been a lot of activity lately in the energy channel with Monster and Rockstar releasing new products, so it’s only appropriate that the market leader Red Bull releases something as well. However, unlike their previous release (energy shots) their latest innovation brings the competition back into the cooler door with other energy drinks. Also intriguing is the fact that the 473ml is only available in the regular size and not the sugar free flavor. That said, the newest innovation can barely be called an innovation at all – bigger can for one flavor.
Bevwire isn’t to convinced that this new bigger can is the best idea that Red Bull could come up with. Most users are trending to smaller sizes with portion controls yet Red Bull moves in the opposite direction. The larger can likely provide lower margins since the retail prices are not hugely different yet there’s more product in the can – energy shots have more margin than cans due to lower material and product cost. Also, what about the cannibalization factor? By having consumers trade up to the larger size, the more profitable smaller cans sell less. Not to mention, their multi-pack sales may decline since consumers can get twice as much product in 2 473ml cans instead of a multi-pack. The can itself does not come with a resealable option like the Monster Import, so the benefits are fairly limited.
It’s interesting to see who Red Bull is actually targeting with this new larger can – heavy consumers that typically drink more than one can, or casual users that change from energy drink to energy drink depending on price or quantity per can. If the rational is the latter, then Red Bull may have gotten it all wrong. When you hold a leadership position like Red Bull and you can sell your product at a smaller size than your competition and still charge a premium, why increase your size to that of your competitor and charge a premium still? The competitive landscape changes in favor of the competitors because the leader has conformed to the rest of the market.
All in all, this product launch can’t really be considered a true innovation as it’s just upsizing their 355ml can to a 473ml can. Depending on how consumers respond, this product can have a polarizing effect on sales for this size and other sizes as well.