As luck would have it, a company client, Chaleo Yoovidhya, also owned a tonic drink company. Mateschitz proposed introducing Krating Daeng to the west, and Yoovidhya and Mateschitz each invested $500,000 in the startup. In Austria, Mateschitz recruited TCBG Pharmaceutical to adapt the drink to the European market. Together, they developed a carbonated beverage called Red Bull. Formally launched in 1987 and introduced in the U.S. in 1997, Red Bull established a major new category, energy drinks. By 2005, the U.S. energy drink market reached $3.3 billion, making it the fastest-growing portion of the non-alcoholic beverage market, according to Beverage Digest.
- Market Dimensions – Coffee is no longer the only way of getting a caffeine boost. The global sports and energy drinks market reached $93 billion in 2020, more than double the figure of a decade earlier, when 2011 sales totaled $42 billion, according to Leatherhead Food Research. Red Bull sold 7.9 billion cans in 2020, equal to $7.7 billion in sales. And, despite the pandemic, Red Bull revenues were up 4% in 2020.
- Target audience – Initially fueled by a thirsty millennial crowd seeking to pack in just one more frenetic experience, energy drinks are now a mainstream beverage. Simmons Research found that 31% of U.S. teenagers reported consuming energy drinks.
- Competition – The Associated Press reported that more than 500 new energy drinks were launched worldwide in 2006 alone.
- Consumption patterns – A survey of energy drink consumption patterns among college students found that 51% of student participants consumed more than one energy drink during an average semester month. Energy drinks were used to combat insufficient sleep (67%), increase energy (65%), and to drink with alcohol while partying (54%).
Getting a quick buzz is central to the marketing of Four Loko, a 23.5-ounce (695 ml) drink combining 12% alcohol by volume with 156 mg of caffeine, plus such energy-boosting amino acids as Taurine. Four Loko is marketed by Chicago-based Phusion Projects and is popularly known as “blackout in a can.”
Four Loko extends a principle introduced by Red Bull. Vodka and Red Bull quickly became a bar and nightclub staple. Sometimes called a “speedball,” the combination offers a depressant, vodka, to bring you down and a stimulant, Red Bull, to take you back up, much like its drug namesake, which combines heroin and cocaine.
The energy drink market could indeed be a speedball, because it’s ruled by the Time Compression Ubertrend — the acceleration of life.
