Business case studyMarket launch

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Simon Daspe

To displace Red Bull as market leader for Energy Drinks in Europe within a short time

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The challenge

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Weaknesses of Red Bull

Vulnerable to regulatory controlThe relatively high caffeine content of Red Bull makes the brand highly vulnerable to regulatory control

Still considered as unhealty productThe core audience supports Red Bull sales, but a lot of people are still reluctant to consume energy drinks

The different challengers

TCCC and PepsiCo have their own energy drinks brands and their distribution deal with Monster and Rockstar, respectively, has added layer of pressure on Red Bull

They use the same kind of marketing mix. They try to imitate the model of Red Bull

Red Bull and its competitors have a « similar » positioning, if we use the same strategy it will take many years to compete and displace Red Bull

The approach (1/2)

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The approach (2/2)

The beachhead in Europe

This market is not mature and the competition is less strong than in other european countries and Hungary is an emerging market

“Sports and energy drinks remain popular despite the crisis. In 2012, consumption grew by 205% over 2007. However, the government is planning to ban the sale of energy drinks to consumers under the age of 18, according to an article on business website Pénzcentrum in June 2012.”

(Compound annuel growth rate)

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Strategic approach

The beachhead: Hungary Brand positioning: Healthy product and more mainstream

Force Fruit

Basic Facts about the product:

Key componentsVitamins from fruitsNon-carbonated drinkGuarana instead of caffeineLow calorie

When the product is consumed?Off-premise (like an energy juice drink)On-premise (replacing classic juice)

Target groupFrom 18 to 90 years old people

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Added value of the product

With a sales point of view

• It creates a new type of energy drink (juice)

• It removes the aspect of unhealthy product

• It permits a communication around vitamins and fruits rather than « chemical » products

• We are not obliged to sell our energy drink in a can, we can create packaging in pet plastic or carton

• We can differentiate our product from competitors

• We have an energy drink and we sell it as a « natural product ++ »

Force Fruit

Development of new flavours

New fruits flavour

Carbonated drinks

Eastern Europe

Western Europe

Other emerging markets

Development in current market (Hungary)

Development in new markets

3-years strategy

A bowling pin strategy

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Launch plan

• Off-premise sales

To convince small shops, groceries, supermarkets to sell our product we can do a kind of « piggybacking ».In soft drinks, we have a negotiation power (our core business)→ Use this power to implement our new product in shelves

• On-premise sales

According to Michael Schaefer, Head of Beverages and Foodservices at Euromonitor international:

“Though juices have long been a staple in any well-stocked bar, the reemergence of cocktail culture over the last five years has brought a surge in opportunity” […] many of them juice-based, freshly-squeezed juice remains the only choice for budding “mixologists” across the globe.”

With our new energy drink, we open a new way to consume cocktail and juice in bars and night-clubs

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Sales Organisation (1/2)

No change in the structure of our sales organisation

Training and education of our sales people to the new product

• Provide them materials to sell the product (.ppt, brochures, samples, elevator pitches…)• Prepare incentives for our customers (challenge them)

Their job descriptions are flexible so they will be responsible for both soft and energy drinks

Set up KPIs to encourage our sales people to sell the new product (ex. Number of customers convinced by selling our product, value and volume of energy drink sales in their total portfolio…

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Sales Organisation (2/2)

Sales arguments and objectives

Be sold in cooler and create new places among juices for this new kind of energy drink

It will attract people attention to their other juices, it is a product with no competitor

Be sold in the stores where our soft drinks are

It is the future of energy drink because it is healthy and it helps for well-being

We have no « direct » competitors, we want to change the way people think « energy drink » to reach a wider audience. And thanks to the lobbying of doctors, pharmaceutical industry… we will be the reference of « energy drink 2.0 »

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Key actions

Try our new product in off-premise and on-premise environments

To ensure that our product is attractive to final customers / creation of a new needAnd to create customer references

Set appointments with our customers To raise awareness and interest of our customers about our new product

Business developmentTo have visibility and to become part of the energy drink environment as a brand new competitor

Gather feedbacks from the field To align our sales strategy to the realityTo improve our sales arguments

To launch our energy drink we have to raise awareness of our resellers about the benefits of our energy drink and to educate them how they can sell it and

promote it

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Financial estimation

1,80€*1,40€*

Energy drink (ed) Soft drink (sf)

0,70€*0,40€*

473ml250ml

*It is an estimationSource: Jorge Olson, Beverages Consultant

• If we shift our sales from 100% in soft drink to 80% of soft drinks and 20% of our new product, our margin will have a significant growth

• Example:

100sf x 1€ = 100€80sf x 1€ + 20ed x 2.5€ = 130€→ benefits multiplied by 30%

By diversifying our business activity, we can generate a

growth of our benefits

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Conclusion

Force Fruit, an healthy energy drink

On-premise: cocktail strategy

Off-premise: Use of our core business to negociate facing in shops

The profit made in the core soft drink business re-invested in the launch of the new product

Beachhead: Hungary (year 1)

Development in similar markets in Eastern Europe (Q4 of Y1)

Launch in competitive markets in Western Europe (Q3 of H2)

Relative growth of our margins by diversifying our business activity

Thank you for your attention

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Force Fruitthe power of nature