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Energy Drinks Firms Turning To Exotic Flavours To Boost Sales, Says Analyst

Energy drinks firm Monster Beverage Corp. is likely to roll out a watermelon variant in the near future, following the success that rival Red Bull has enjoyed with its watermelon-flavoured product, an industry analyst has suggested.

Commenting on the brand's performance in the US market, Mark Astrachan of Stifel said that Monster has already seen some success with new variants of its Ultra brand this year, including with the mango-flavoured Ultra Fiesta.

'Meaningful Contributor'

Adding an Ultra Watermelon variant could "add at least 300bps to Monster’s sales over a next twelve month period following launch", he said.

"We think Watermelon could be a meaningful contributor to Monster’s sales as it has accounted for 3% and 5% of Red Bull’s sales over the last one and three months, driving 29% and 40% of year-on-year company sales growth over the periods," he added.

It would also continue the brand's embrace of more exotic flavours, following the launch of a lychee-flavoured version of its Reign Body Fuel brand in August.

Monster is also reportedly eyeing up entry into the hard seltzer market, with a potential product launch in this category next year, as well as more investment in juice, where it operates brands such as Pipeline Punch, Pacific Punch, and Mango Loco, according to Astrachan.

Red Bull Watermelon

The brand will have noted the success of Red Bull Watermelon, which was introduced in February 2020 and was an immediate success, contributing 7.7% of the brand's sales between May and June 2020.

While growth has since slowed – it accounted for 5.3% of sales in the last quarter, and 3.1% in the past month – Red Bull Watermelon has "largely been additive to Red Bull’s sales as its contribution to year-on-year sales growth has been fairly consistent since mid-June while overall growth has remained solid," said Astrachan.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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