Fizz (37 page)

As Jolt weaved its way into pop culture, it revealed that just as there were people who wanted their fizz free from caffeine, there were plenty who craved a bigger buzz from their beverage. And while Jolt led the way, it
would be an Austrian toothpaste promoter who would take what Rapp had stumbled upon to its logical conclusion.

Dietrich Mateschitz was born in 1944 in Sankt Marein im Mürztal, an Austrian town about eighty miles southwest of Vienna. After studying marketing in college, he joined Unilever, where he marketed detergents before moving to Procter & Gamble to head up the international marketing of the toothpaste Blendax. His dentifrice-marketing role took him all over the world. One day in 1982 his globetrotting business trips took him to Thailand, where the badly jet-lagged businessman tried Krating Daeng for the first time. Launched in 1976 by the Thai pharmaceutical entrepreneur Chaleo Yoovidhya, Krating Daeng was a sweet, still beverage promoted as a means of replenishing energy. The drink had a label that showed two gaur, a bison-like bovine native to southern Asia, charging at each other. “One glass and the jet lag was gone,” Mateschitz later told the
Economist.

Mateschitz became obsessed, ordering the taxis ferrying him around Bangkok to stop at stores so he could grab a bottle whenever he felt tired. Then in 1984, while he sat at the bar of the Mandarin Hotel in Hong Kong on another business trip, he read a story about how Japan's biggest taxpayer was a pharmaceutical company that sold tonics similar to Krating Daeng. Then and there, Mateschitz decided he should bring the Thai pick-me-up to Europe. After striking a deal with Yoovidhya, the Austrian marketing expert began thinking about how to best promote the drink. He knew he needed to do more than just import the beverage and, calling on the marketing skills he learned at Unilever and Procter & Gamble, set to work reinventing the Thai energy drink. “The only things we took back to Europe were the active ingredients from the original formula,” he told the drinks industry website
BevNet
in 2007. “Everything else, including package design, advertising and promotion, positioning, distribution, and price strategy, was developed individually for the European markets.”

The result was Red Bull. The renamed drink carried a similar logo to Krating Daeng, but now the charging bovines were bulls rather than the gaur that few Europeans or Americans would have recognized. He opted for thin, tall eight-ounce cans that made the drink stand out on the shelves and, to underline Red Bull's status as something more powerful than the
average beverage, he gave it a premium price. To give it an extra zing he made his sole addition to the drink's formula by carbonating it. Finally, Mateschitz devised a marketing strategy that promoted Red Bull as a new type of beverage, an energy drink, and he developed campaigns designed to link its consumption with extreme sports and other energetic activities.

There had been energy drinks before. In 1927 a British pharmacist named William Owen developed Glucozade, a sugary carbonated drink with a vague taste of oranges that was sold as a beverage that could reenergize the ill. Two years later it was renamed Lucozade. Lucozade continued to be pushed as a drink for the unwell for decades until, in 1985, the pharmaceutical company Beecham relaunched it with TV ads showing Daley Thompson, the British Olympic decathlon gold medalist, racing around an athletic track to the feisty heavy metal of Iron Maiden's “Phantom of the Opera.” The result positioned Lucozade somewhere between a sports drink and an energy drink, but while the high-glucose and high-caffeine drink was popular in the United Kingdom, little effort was made to spread it beyond British shores. Even in 2009, by which time it was owned by the global pharmaceutical giant GlaxoSmithKline, the eighty-year-old energy drink had yet to reach Germany, let alone the United States.

Like Lucozade and Jolt, Red Bull was high in caffeine, boasting 9.5 mg of the stimulant per fluid ounce, well above Coca-Cola's 2.8 mg and even Jolt's 6mg although still less than the 18.1 mg in filter coffee and 51.3 mg in a shot of espresso. But Red Bull featured more than just caffeine and sugar. Another part of its energy blend was a dose of synthetic taurine, an amino acid that occurs naturally in the body and is present in meat and fish. Some studies suggest that taurine enhances endurance and reduces the build up of lactic acid after exercise, but its full role in bodily functions is not fully understood. Red Bull also contained B-group vitamins, which can also be found in a wide variety of foods and play important roles in cellular processes. While these vitamins are vital, evidence suggests that excess B-group vitamins provide no additional benefits and are simply excreted in urine. Finally there was glucuronolactone, a stimulant believed to increase alertness. These ingredients would, in similar quantities, become features of almost all energy drinks, although many also contain guarana, a small
berry-like fruit found in the Amazon basin that bears caffeine-rich seeds and is the basis of several popular Brazilian sodas, the most successful of which, Guaraná Antarctica, launched in 1921 and is the South American nation's second-best selling soda after Coca-Cola.

In 1987, with his planning finished, Mateschitz launched Red Bull in Austria. From the start the beverage associated itself with the fast lane and daredevil challenges, sponsoring Austrian Formula 1 racing driver Gerhard Berger and the Dolomitenmann, an exhausting marathon of kayaking, paragliding, and running through the Dolomites, a mountain range in Austria. By the start of 1994 the company had its whimsical TV cartoon ads with the “Red Bull gives you wiiings” slogan in place, and Europeans were embracing its promise of liquid zing, sometimes with too much fervor. “When we launched in Germany in 1994, we dramatically underestimated the demand our product would have,” Mateschitz told
BevNet.
“We were selling an average of a million cans a day and ran out of stock after a few months. We were not able to buy additional cans anywhere in the world to keep up production. As a consequence, we… had to re-launch Red Bull six months later.”

Red Bull finally charged into America in 1997, bringing its cartoons, sprightly promotions, and energy drink positioning with it to nearly instantaneous success. Red Bull's spread proved unstoppable. By the end of 2006 Red Bull could be found in 141 countries, Mateschitz was a billionaire, and the company even had its own NASCAR and Formula 1 teams.

Red Bull thrived on its groundbreaking marketing approach, which focused on creating and owning—as opposed to sponsoring—attention-grabbing promotions that would engage its target audience and keep its brand in everyone's mind, whether that was having its own motor racing teams, producing
The Art of Flight,
an acclaimed film about snowboarding, or publishing the global monthly magazine the
Red Bulletin.

Its most spectacular and daring marketing move, however, was the decision to spend tens of millions of dollars bankrolling the Red Bull Stratos project, a record-breaking high-altitude skydive from the edge of space by the Austrian daredevil Felix Baumgartner. Seven years in the making, Red Bull Stratos involved the development of a special pressure suit for
Baumgartner, a high-tech hot air balloon capsule to take the skydiver into the stratosphere, and custom-made equipment to monitor his descent. When Baumgartner finally made his jump on October 14, 2012, more than eight million people around the world were watching as he dropped twenty-four miles down to earth and achieved a top speed of 833.9 miles an hour before gently landing by parachute in a New Mexico desert. The dive smashed world records. It was the highest-ever skydive with the longest-ever freefall, and Baumgartner was also the first person to break the sound barrier. Baumgartner's Red Bull-funded feat was a stunt of epic proportions, one that some declared “the greatest marketing stunt of all time.” Red Bull might not have taken its beverage into space, but the daring dive certainly outstripped the excitement generated by Pepsi and Coca-Cola's own space travels.

Red Bull's more direct and masterful marketing made Jolt yesterday's news. “The way Mateschitz positioned Red Bull was much more about providing energy to fuel an active lifestyle than Jolt, not necessarily physically active, but staying up all hours and living life to the fullest,” says Rapp. “We played a role in the development of the energy drink category but the credit goes to Red Bull and Monster for being better marketers than we were.”

Launched in 2002 by the California soft drinks firm Hansen's Natural, Monster Energy was the American answer to Red Bull. It evolved out of Hansen's Energy, an unsuccessful energy drink that found itself outgunned by the Austrian market leader. “We realized that if we were going to survive in the category, we really needed a product with a different positioning,” Mark Hall, the president of Monster Energy told
Beverage World
in 2009. “We've always looked at Red Bull as the sleek, sophisticated European brand and Monster is a rough-and-tumble American product.”

And America, as far as Monster was concerned, meant bigger, so instead of Red Bull's petite silver and blue containers, Monster came in sixteen-ounce jet-black cans. Like Red Bull, it also associated itself with a daredevil lifestyle. “Monster is about action sports, punk rock music, partying, girls and living life on the edge,” Hall said. When Red Bull eventually upped its can size too, it only underlined how Monster's bigger size had helped it become the Austrian energy drink's main challenger.

By 2011 Americans were guzzling down more than 1.8 billion liters of energy drinks every year. But compared to soda this was small potatoes. Even Red Bull, the biggest energy drink of them all, falls well short of making it into the list of America's top-ten-selling sodas.

But there was little doubt that energy drinks were chipping away at soda's sales, and they became popular enough to inspire a Jolt-style backlash of their own in: Slow Cow, a French Canadian “relaxation” drink. Eric Marcoux, vice president of the Quebec-based Boisson Slow Cow, says the idea for a relaxation drink began in a store filled with displays of energy drinks. “One of my friends, who hated those energy drinks, was in this store and he said to me: ‘Why don't we do the other side? If they have energy drinks, we'll do one just to relax with,'” he says. “These energy drinks were everything that we hate. You see children eight years old and they have a Red Bull or Monster in their hands. The kids, they drink one in the morning before they go to school, they drink another before they play hockey or soccer and by the end of the day they will have had between two and ten. I believe that is bad. The kids think it will help them concentrate, but instead they become excited and can't concentrate. So we made a drink you can drink once or ten times a day that is going to help you focus and concentrate.”

Marcoux's answer, Slow Cow, launched in 2009 with a logo that replicated the charging bovines of Red Bull, but replaced them with snoozing cattle. Red Bull's lawyers were onto it like a shot. “I wanted to do it to make people talk about the drink and we knew somebody would call us,” says Marcoux. “But you don't want to fight with Red Bull, so we made an agreement and now it's a single cow.” Not that Slow Cow's relationship with the Austrian energy drink powerhouse improved as Slow Cow steadily expanded across Canada and into the United States. “I'm not the best friend of theirs,” Marcoux laughs. “What they do in Canada is they go someplace and say: ‘We will give you this if you remove them.' They don't like us. They try to stop us getting into shops.”

But Slow Cow and the energy drink boom that inspired it were not the only ones to follow in the wake of Jolt's kick against diet and caffeine-free soda, as the beer distribution network that Rapp used to launch Jolt opened
the doors for an explosion of new still and fizzing drinks—drinks that the industry took to calling “new age beverages.” “That's probably Jolt's largest legacy,” says Rapp, who has since launched the vitamin water Karma Wellness Water. “Jolt's route to market system in the United States created another way into the market that brands like Clearly Canadian and others emulated. In two to three years of us doing that with Jolt, there were enough brands collectively to create what became known as the new age beverage category. The common denominator was that these were products sold at a premium price and since the large companies are risk adverse that system became the hotspot of innovation because the risk factor was minimal. The commercial success of the innovative drinks that came through the new age beverage system had a profound impact on Coke and Pepsi.”

Individually none of these drinks were a serious threat to Coca-Cola or Pepsi, but collectively these new beverage brands began to win over sizeable numbers of people who might otherwise have opted for one of their sodas. Brands such as Jones Soda, founded in 1996 by former ski instructor Peter van Stolk, who started selling his pop in snowboarding shops and tattoo parlors. Van Stolk had a hunch that his Generation Y customers were cynical about big business and would buy into a brand that they could feel a connection with. So he encouraged people to send in photographs so he could put them on his ever-changing labels. By 2006 more than a million photos had been submitted by fans who hoped to one day see their images lurking on the shop shelves.

“We allowed the labels to be discovered and that gave consumers a sense of ownership,” van Stolk told
Bloomberg Businessweek
in 2005. Jones Soda also made itself stand out by offering novelty flavors that ranged from the odd to the downright disgusting, such as smoked salmon pate, mashed potato, and their Thanksgiving special of turkey and gravy. They might not have tasted great, but Jones Soda fans loved trying the off-the-wall choices just to see what the result tasted like. This was soda, but not as Coca-Cola or PepsiCo knew it.

But as the twenty-first century dawned, the new age beverage makers offering green bean casserole-flavored fizz were the least of the soda giants' worries. They had a bigger problem. A much bigger problem, and
one shared by millions of Americans: obesity. American waistlines had been expanding for years, and by the year 2000 the idea that something needed to be done was taking root. In the early 1960s 13.3 percent of American adults were classified as obese by the Centers for Disease Control and Prevention, but at the start of the new century the figure had grown to 31.1 percent, almost one in three people. Children were getting fatter too. In 1980, 6 percent of American children and young people were considered obese; by 2012 the proportion had tripled. And with obesity linked to strokes, heart disease, cancer, and type 2 diabetes, estimates put the cost to the nation of all this excess weight and associated diseases at $150 billion a year. This was not just an American problem; a similar upward trend could be seen in Australia, Britain, Chile, and Mexico. But America led the pack among Organisation for Economic Co-operation and Development (OECD) member nations with 33.8 percent of American adults classified as obese in 2009. In contrast the average OECD nation had an adult obesity rate of 16.9 percent, and Mexico, the next most obese country, had an obesity rate of 30 percent.