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Why Monster Beverage is a dominant energy drink player

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Jan. 6 2015, Updated 10:04 a.m. ET

Monster’s growth

From a humble beginning as a company that sold fresh fruit juice, Monster Beverage Corporation (MNST) grew into a leading energy drink maker. According to Euromonitor International, Austria-based Red Bull GmbH holds a 31.5% share in the global energy drink market. Monster Beverage is second. It has a 14% market share.

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Energy drinks surpass other categories

Over the past few years, leading soda makers—like The Coca-Cola Company (KO), PepsiCo, Inc. (PEP), and Dr Pepper Snapple Group, Inc. (DPS)—have been facing challenging times. Soda volumes have been declining in developed markets—like the US. These companies are part ETFs—like the Consumer Staples Select Sector SPDR Fund (XLP) and the SPDR MSCI World Quality Mix ETF (QWLD).

In contrast to carbonated soft drinks, energy drinks have gained popularity across the globe. Energy drinks are popular—despite the health concerns about the higher caffeine content. According to Beverage Marketing Corporation, energy drink volumes increased by 5.5% in 2013—compared to the 3.2% decline in soda’s volumes. Energy drinks’ volume growth also surpassed other beverage categories—like ready-to-drink tea and sports drinks.

Euromonitor International is a market research firm. It estimates that the global energy drink industry grew from $3.8 billion in 1999 to $27.5 billion in 2013.

More energy from Coca-Cola

Due to its recent deal with Coca-Cola, Monster Beverage will gain a greater share in the energy drink market. Coca-Cola will transfer its energy brand portfolio—including brands like NOS and Full Throttle—to Monster Beverage. We discussed the deal in the last part of this series.

Leading position in the US

According to Euromonitor, Monster Beverage held a 35.1% share in the US energy drink market in 2013. Red Bull was first. It held a 42.9% share. In the next part of this series, we’ll discuss Monster Beverage’s aggressive marketing campaigns. We’ll see how the campaigns attracted young customers.

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