Industry sees Monster problem ahead for Coke

Coca-Cola’s move to take over the UK distribution of Monster Energy has caused confusion in the industry about its strategy in the energy drink market.

Monster, a top selling energy drink in the US, is positioned as a rival to Coke-owned brand Relentless, but will now sit in the same portfolio after The Coca-Cola Company and Coca-Cola Enterprises signed a deal to handle Monster’s distribution last week.

With both energy drinks sold in larger-sized cans and targeting the same young, male market, many industry observers are questioning the logic behind Coke’s strategy.

Former Britvic marketing director Andrew Marsden has dubbed the move “weird”. He adds: “It may well be that they don’t think Relentless will cut it. Maybe they’reseeing that Monster is so strong in the US and they’ll put more money behind that brand instead.”

But a Coke spokesman maintains it is committed to both brands, with the addition of Monster allowing it to expand its energy portfolio and “broaden consumer choice”.

Brandhouse WTS head of strategy Warwick Cairns points out that Coke will need to consider a vastly different strategy for the two brands.

He says: “At the moment they are competing in exactly the same space and that situation is not sustainable. I would segment them so that one would be associated more to mainstream sports like football, while the other would take on alternative and extreme sports in the way Red Bull does.”

One industry insider says the end goal for Coke will be to see how Monster performs in Europe and hope that it will be able to emulate its success in the US.

“The distribution deal has emerged because of Coke’s inability to come up with its own strong energy drink worldwide. So it will touch it, smell it, feel it and within 18 months decide whether or not to buy it,” the source says.