How Billionaire Dietrich Mateschitz Changed the Beverage Industry

Red Bull stands out from the crowd by marketing almost exclusively through extreme sports.
Red Bull stands out from the crowd by marketing almost exclusively through extreme sports. | Source

The History of Red Bull

Dietrich Mateschitz of Austria doesn’t look like the kind of man who would end up a billionaire or the name behind a world famous brand. He finally finished college after ten years at the age of twenty eight, six years longer than it should have taken.

Mateschitz took a position with Blendax, a German company. It was in their employ that he visited Thailand. Here he discovered the drink that would become Red Bull. The drink was the creation of Chaleo Yoovidhya, a Thai pharmaceutical billionaire.

The Thai drink helped Mateschitz conquer jet lag, and Dietrich Mateschitz realized that millions of others would pay for the same privilege. Mateschitz quit his job in 1984 to start an energy drink company. Through his marketing savvy and expertise, he grew Red Bull into a global brand and a net worth estimated to be around 7.1 billion dollars. In the process, Dietrich Mateschitz created a new beverage category – the energy drink. However, success did not come overnight.

The History of Marketing Red Bull

Mateschitz hired marketing research firms for the initial roll out. After half a million dollars and three years, they told him that customers hated everything from the name to the product’s taste. Mateschitz had to go against the advice he had just paid for to release the energy drink.

Red Bull also faced regulatory hurdles. Energy drinks contain a number of stimulants, substances that often run afoul of medical regulations. Consumer safety agencies were concerned about Red Bull because it contained ingredients they’d never before approved. Red Bull had to get approved by the Ministry of Health in every country before it could be sold on the market. Austria approved it first in 1987, followed by Hungary, the United Kingdom and Germany.

Despite the consultants’ market research, the marketplace said otherwise. In 1997, Red Bull hit the U.S. market. By 1994, Red Bull was selling over a million cans each day and still struggling to keep shelves stocked. It took ten years to become a resounding market success.

Red Bull has a history of sponsoring extreme sports. The original Thai version of Red Bull sponsored boxing matches. Red Bull International is a sponsor of the 2013 X-Fighters in Dubai and the X Games and iXS European Downhill Cup. It sponsors the FMB World Tour. It even sponsors world champion acrobatic pilot Sarah Hendrickson. They sponsor cliff diving competitions, air races and a downhill ice cross. Red Bull sponsors whole sports teams, instead of simply slapping a logo on the side of the stadium. Drivers may see Red Bull branded cars on the road or the Formula One race car emblazoned with the Red Bull logo. Red Bull creates new competitions and outreaches to keep the sports sponsorships fresh. There is now a Red Bull skate park and Red Bull themed spaces in several video games. Not all Red Bull events necessitate radical, life threatening athletics. The Red Bull Paper Wings contest is the world championship of paper airplanes.

Red Bull even has its own record label and six bands to date. Red Bull Records lets independent bands record music for free, while the musicians profusely share their praise for Red Bull with their audiences. This is a natural outgrowth of the rap competitions and musicians Red Bull has sponsored for years.

Red Bull is seeking to fill every media niche that it can find. Readers can read the Red Bulletin magazine. Red Bull actually made money on its movie “The Art of Flight”, a documentary.

Red Bull continues to break the mold when it comes to marketing. Red Bull taps into the wow factor by linking to amazing videos on hits home page. Clicking on the “Epic” link lets you see videos of people in wing suits and the first person in history to complete three revolutions on a skateboard. Professional grade videos that are simply amazing end up on Halogen TV, websites around the world and print articles with Red Bull logos embedded within them. Given this content, why not aim for something out of this world?

Red Bull Stratos was the world’s first supersonic freefall. Red Bull sponsored Felix Baumgartner’s skydive from the edge of space, creating a thrilling video that has been hundreds of millions of people. Unlike commercials, people choose to watch this one of a kind event by themselves, and even people who do not understand the audio can see the Red Bull logo.

Red Bull’s sponsorship has paid off in several ways. First of all, everyone who sees the video will see Red Bull’s logo as well; when this video is shown to school children in twenty years, they’ll see Red Bull. The second benefit is the fact that it stands out in a crowded marketing space. Business signs, race cars, sports stadiums and web pages are littered with competing ads. Red Bull is the only advertiser associated with this venue, and its name is forever linked to the accomplishment. Red Bull is noticed because there is no competition. Then there is the fact that the event linked so well to the company’s catch phrase, “Red Bull gives you wings”. They took a man to the edge of space and saw him safely back to Earth. No one has yet announced plans to take anyone higher than Mr. Baumgartner’s skydive. Red Bull has positioned itself as the energy drink for active, adventurous people, even if many consumers use it for all night study sessions or getting out the door after four hours of sleep.

Where Red Bull is Charging Ahead

Red Bull continues expanding its offerings to meet an increasingly international market. There are various sizes, from tall metal cans to “energy shots”. The Western market gets a carbonated flavor reminiscent of soda, with regular and sugar free versions of Red Bull. There is a Red Bull cola and zero calorie version of Red Bull. The Chinese get two non-carbonated version but have an extra strength formula. However, Red Bull tries to avoid altering the taste of its drinks, though this can slow its expansion into new markets. Red Bull is trying to break into the Japanese market and spread into China and India, nations with large, increasingly affluent populations. And Red Bull may succeed in its mission.

It is through ground breaking media and a link to the new and revolutionary that helps the brand reach those who can't say its name but recognize the Red Bull logo and associate it with adventure, success and pushing the limits.

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Millionaire Tips 3 years ago from USA

That is an interesting story - it would be hard to spend that much money and go against what the market research showed.

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