Monster Beverage Corporation (MNST) is the second largest energy drink maker. It has a strong brand image across the world. Monster Beverage’s claw-like green logo, its product taglines like “unleash the beast,” and its bold advertising campaigns reflect its edgy and aggressive image.
Monster Beverage’s advertising and marketing efforts are associated with adventure sports and sports personalities. The company sponsors extreme sport events like Motocross—a form of off-road motorcycle racing. It also sponsors skateboarding, surfing, car racing, and electronic games, or e-games. Through these events, the company attracts young consumers who relate to the adventurous and fiery identity of Monster Beverage’s energy drinks.
The macho image, and the promotion of these drinks as an immediate energy booster, made them the military’s drink of choice.
Monster Beverage also sponsors music festivals and concerts as well as upcoming bands.
Monster Beverage’s advertising expenses have been continuously rising in absolute dollar terms. In 2013, Monster Beverage spent 8.1% of its net sales on advertising and promotional expenses. Peers in the non-alcoholic beverage industries—like The Coca-Cola Company (KO) and PepsiCo, Inc. (PEP)—spent 7% and 5.9%, respectively, of their 2013 revenues on advertising and marketing. These companies are part of several ETFs—like the Consumer Staples Select Sector ETF (XLP), the SPDR MSCI World Quality Mix ETF (QWLD), and the SPDR S&P 500 ETF (SPY).
Transition in product marketing
Before 2013, Monster Beverage was marketing its products as dietary supplements. However, there were rising safety concerns about energy drinks. The concerns made the company transition the labeling and marketing of its energy products—like Monster Energy and Hansen’s Energy—from dietary supplements to conventional foods.
The ABA (American Beverage Association) is a trade association of non-alcoholic beverages. In 2014, the ABA recommended that energy drink makers should disclose the caffeine content in their products. Also, the companies should stop marketing energy drinks to children under 12 years of age. Energy drinks are considered to be harmful for children and adolescents because of the drinks’ health impacts.
In the next part of this series, we’ll discuss the harmful impacts of energy drinks.