It'll never fly - Red bull

Devising a new (and legal) product that deliver a mind-altering hit is no easy business, especially if it tastes like cough medicine.

Last Updated: 09 Oct 2013

Sickly sweet, Red Bull doesn't even contain alcohol to compensate; instead, it offers caffeine, glucuronolactone and taurine. No, this last ingredient doesn't come from bulls' testicles but is a component of human bile. If that isn't off-putting enough, Red Bull is banned in France and Denmark, and classed as medicinal in Norway, even before it's mixed in the glass with vodka.

In the '80s, Austrian entrepreneur Dietrich Mateschitz discovered the jet-lag curing qualities of the Thai drink Krating Daeng ('red water buffalo').

Despite disastrous consumer tests in the UK, he launched a carbonated version in 1987, buoyed by expensive guerrilla marketing. This brought a $1 million deficit in his first year of production, but caused a stir among extreme sports junkies and clubbers who, driven by its anti-mainstream image, liked to 'have it large' on its caffeine kick. Red Bull generated sales of $2 billion worldwide in 2004.

In the US, Pepsi and Coke responded with their own 'performance enhancing' drinks, enlarging their home market to $1.7 billion. And as its initial fans swap the bungee chord for apron strings, Red Bull has had to grow up - buying a Formula 1 team and developing a herbal tea. As its market share drops - from 75% in the US in 1998 to 47% now - the brand will need strong wings to stay ahead.

MT Break

Find this article useful?

Get more great articles like this in your inbox every lunchtime

When should you step down as CEO?

Bob Iger's departure poses an unpopular question for bosses.

The death and resurrection of the premium customer

Top-end service is no longer at the discretion of the management.

What HS2 can teach you about project failure

And how you can prevent projects going astray.

35 Women Under 35 2020: Nominations open

Management Today's 35 Women Under 35 showcases the country's rising stars in business. Here's how...

Practical steps for breaking silos

Briefing: Adam Williams, former CEO of influencer marketing agency Takumi, shares what he has learned...

The Power 50: Proof that you can be a part-time CEO

Just a few years ago, executives were reluctant to admit they worked part-time for fear...