Monster Beverage explores new marketing strategies to reclaim share, drive sales

During the company’s investor day earlier this month, executives said Monster Energy sales increased 2.2% year-over-year off a large base to reach $1.5bn in the 13 weeks ending Dec. 30, 2023, while sales of the company’s relatively newer brand Reign, which launched five years ago, increased 27.6% year-over-year to $133.8m in the same period. Price hikes due to inflation helped pad the percentage change for both, but they each held their own with year-over-year unit increases of 0.9% and 31.2% respectively.

Reign’s strong performance helped it scoop up an additional 0.4% dollar share from the previous year, but Monster didn’t fare as well, losing 1.6% dollar share in the same period.

Monster’s loss reflects the highly competitive nature of the increasingly fragmented energy drink market and the strong gains by a handful of competing brands that single out different user bases, including Celsius, which saw sales increase a whopping 126.5% year-over-year, albeit off a much smaller base to reach $453m in the 13 weeks ending Dec. 30. This sales boost was accompanied by a notable 115.8% increase in units and a 4.6% increase in dollar share over the same period.

Other notable winners that gained market share include C4, which saw sales climb 63%, units 53.9% and market share 1%, and Ghost, sales of which increased 60% with a 58.1% increase in unit sales and a 0.8% in dollar share.

“It is quite interesting to note some of the newer entrants in the category … you can see levelling off in their sales in the last three or four months,” CEO Rodney Sacks pointed out. These include Starbucks energy, sales of which fell 15.8% with a 21% drop in units and 0.7% drop in dollar share in the same period, according to Nielsen data across all measured channels in the 13 weeks ending Dec. 30 presented by Monster.

Some well established players also lost ground, including 5-Hour, sales of which drop 6.5% with an 8.1% decline in units and 0.5% drop in dollar share; and Rockstar, which saw sales fall 4.8% with an 8.2% drop in units and 0.4% dip in dollar share, according to the data.

“Also noteworthy is Bang, which was on the decline until we acquired the brand. It seems to have stabilized,” said Sacks. Nielsen data shows its sales are down 63.1% and units down 64.3% year-over-year in the 12 weeks ending Dec. 30. Its dollar share is also down 2.4%.

Monster boosts social media, in-store execution to boost sales and share​

To recapture lost share and continue to drive sales and units, the company will tweak its promotional activities to focus more on social marketing, according to Sacks.

“We are putting more financial resources behind social media, we plan to grow that part of our marketing spend this year and going forward. It’s becoming a bigger and more important part of Monster,” he said.

He acknowledged that “for some of the other brands, [social media] is already probably the major part that they focus on and that they communicate through.” But, he added, social media “has always been a smaller part of Monster. We’re now increasing that on the Monster side. And, obviously, we’re going to continue to support a lot of other brands like Reign and Storm and Bang through the social media channels and areas.”

Looking forward in the US, the company also plans to focus on innovation in the first trimester and in-store execution, Sacks said.

"We think that there is a lot of low hanging fruit. We really do need to focus on and improve our execution. And so, we are determined to do so and we are taking steps to do so in-store on retail shelves,” he said.

In the second trimester, the company will focus on a gear program that, based on the success of a previous program year ago, the company believes will be “highly in demand” and garner significant response from consumers.

The third trimester will focus on the gaming community with a tie in to Call of Duty, which Sacks said he believes “is going to really be big for us and it works well when we do these tie ins on pack, in store and on promotion.”

More broadly, Monster Beverage Corp. plans to shine a brighter spotlight on its different product families to establish them as standalone brands rather focusing mainly on Monster Green as an umbrella to cover everything, Sacks said.

He explained this strategy should help the company appeal to different consumer bases more effectively.

Innovation balances zero and full sugar ​

Innovation will also play a key role in driving growth in 2024, with a wide range of new flavors coming out across the brands.

Within Monster, the company plans to launch or relaunch four SKUs, including an Ultra Fantasy Ruby Red within the Zero Sugar line, Rio Punch in the Energy + Juice line, a reformulation of Irish Cream within the Java Monster line, and a Peaches N’ Crème flavor in the company’s full sugar reserve line.

“For our full calorie line, we do believe there is still a big market. Everybody is focusing on zero sugar, and we have a full array of products that address the zero-sugar consumer, not only for Monster but Reign and other products. … But we do believe there is a market in the US – particularly in middle America – where consumers still want a full sugar product,” and for them the company is launching Peaches N’ Crème, Sacks said.

Staging Bang’s comeback​

In the coming year, Monster Beverage Corp. also plans to rebuild the consumer base for Bang, which it recently acquired but before that “lost a lot of shelf space,” Sacks said.

“We’ve taken over the brand. We rationalized it. We now have 12 SKUs and are focusing on what we think are the more core items in the Bang line … that don’t have a lot of competition, and we’re going to focus on re-establishing them, which is what we are doing now,” he added.