SEGMENT OVERVIEW

INDIA

Fastest growing sector within the beverage industry

Top two players in India – Red Bull (62%) and Cloud 9 (25%)

About two-third of energy drink consumers are males.

Mainly targeted at 20-35 years of age but this trend is

changing with the new arrivals.

Competition in India is lesser as compared to global markets

Available in cans, pouches and solid-mix

Global leaders: Red Bull and Monster energy drink

Off trade sale share is 70% and on trade is 30%

Products

Value in Rs.

(Mn)

%of Total Category

Value in India

Bottled Water 173069 40%

Carbonates 179507 41%

Fruits and

vegetable Juices 69183 16%

Concentrates 6375 1%

Sports and

Energy Drinks 6510 1%

Total 434664 100%

VALUE CHAIN Offer increased energy boost because of the ingredient profile of caffeine, taurine, herbal

extracts and vitamins.

May improve mood, enhance physical endurance and reduce mental fatigue

It is known as the party drink and often used with alcohol

According to Mintel market for sport and energy drink has grown from £1bn to £1.5bn during 2009-2014 as tired consumer try these products to beat fatigue

Many soft drinks contain antioxidant polyphenols extracted from fruits that act as health-promoting constituents that help protect the body from

the effects of free radicals that can harm proteins, lipids and DNA

Cancer and coronary heart diseases

The sugar-free packs can be helpful for diabetic people. They can also help in weight-loss by acting as a substitute for carbonated soft drinks as they are completely fat-free.

INHIBITORS Huge market share of soft drinks and bottled water in India.

Low competition. Less aggressive marketing.

Huge amount of caffeine considered to be bad for health.

Limited to sports, music and cultural events.

Preference of other drinks over energy drinks.

Awareness limited to metro cities and other A cities.

Limited flavors which might not be suitable for Indian taste

Strengths

Reasonable pricing (twice cheaper than Red Bull)

Huge online audience with own Social network (Monster Army)

Increasing popularity

Contains natural ingredients

Innovative

Weaknesses

Harmed reputation because of death occasions

Limited market place reach No top-of-mind awareness

No used advertising Monsters marketing audience now is limited by extreme sport fans and aggressive music

Limited distribution model

Opportunities

Huge opportunities for entering new markets- Entering developing markets

Finding and promoting (not direct and official) appropriate alcohol combination as Red Bull Vodka

Usage of knowledge in producing of healthy natural drinks (back to Hansen’s roots). It may allow them to increase visibility and revenues from warehouse segment

Buyout Target – Maybe know is the time to be picked up by the larger business. (ex. Coca Cola)

Threats

Increasing public awareness about harm of energy drinks leading to shift of students values to the healthy habits

Increasing competition

Possible price wars launching by private labels (ex. Carrefour energy drink)

Enhancing government’s regulation of energy drink market

Rival company Red bull already provides regular campus activities and Red bull sponsorships of major TA parties

Strengths

Industry leadership –dominant 43% US, around 60% India)

Successful Marketing capabilities-by sponsoring dangerous sports such as Formula 1 driving; free skiing; BMX biking and many more

Alliance with major distributors-Cadbury Schweppes in Australia that can help it to reach channels like Vending machines

Weaknesses

Lack of innovation- some competitors are coming with vitamin and glucose drinks while Red Bull continues with its old products

Reliant on small product base-Nowadays there is a change in consumers’ interests toward healthier alternatives such as decaffeinated drinks

Marketing expense it needs to spend so much money on advertising as competitors like Pepsico are catching up

Opportunities

Diversification of retail outlets-Vending machines used as effective advertising and sales tool

Extension of product line- Red Bull can introduce new products and can capitalize on its strong consumer awareness

Geographical expansion- Red Bull sells products to more than 100 countries and id now expanding I developing countries

Threats

Public health concerns- because of its high caffeine content and other ingredients it is considered deadly in some situations

Lack of Patent

Maturing market Red Bull’s target, generation Y is becoming older

Consumer awareness of health and well being- increasing growth of bottled water sales is a sign that people are becoming health conscious

SWOT

ANALYSIS

Rivalry among existing

competitors: High3 companies share the majority of the

global market, while hundreds of other little brands are

fighting in a local level

Threat of Substitutes: High

Health conscious customers

Use of kava and valerian root which are common ingredients

in relaxation drink are not approved by US FDA.

Bargaining

power of Buyers: High

Growing number of brands

Many sellers have equal competitive

strength

The relative maturity of sports drink and

energy drink segment

Threat of New entrants: High

There are few players which manufacture with natural ingredients and have no

side-effects.

Bargaining power of Suppliers: Low

Mature and saturated market, price-conscious consumers

Coca-Cola and Pepsi-Cola dominate vending machines

UNMET NEEDS

Health concerns about energy drink

- access amount of caffeine

Energy drink for diabetic patients

as it is growing market at 10-11%

per year

Energy drink in various flavors as

currently most of the company are

having limited flavors

Carbon neutral energy drink so that

they can build goodwill as the green

company

Sport specific energy drink – developing

variants of energy drink according to sport

Brain boosting energy drink

NEW OFFERINGS

Health beneficial ingredients like Ginkgo,

Guarana, Ginseng, milk thistle will be used

in certain amount

Jamun seeds mixed with energy drink in

small proportion for diabetes patients

New flavors according to demand can

be launched

New shapes and styles of packaging

Organic development so that no harm to

earth – they can earn carbon credit and

position themselves as green industry

Marketing Strategy for the new offering Marketing Health Nutrition

Energy drink for Diabetes patients

Packaging

Energy drink simulators

Energy drink products have positioned itself as the drink for youth, party lover,

tired people and energy booster. Promoting using simulators will help to

achieve higher market share.

Energy drinks can build its image using herbs and position itself as health

conscious brand.

According to diabetic journal, number of diabetic patients is increasing with

10-11% annually. There are currently 10mn people suffering from diabetes

in India only. Using Jamun seeds can give them competitive advantage to

capture higher market share in this sector.

Energy drink industry can change its packaging according to its

target audience

MARKETING MIX

Product

Energy drink for diabetic patients

Herbal blend of Ginkgo, Guarana, Ginseng and milk thistle

Jamun seeds add ins

caffeine for stimulating effect

Alpine spring water – highest quality of clean water

250ml can give 80 mg of caffeine same as a cup of coffee

Price

Rs. 120 per can or 250ml of energy drink

Discount on pack of 4 – Rs. 380 for pack of 4

Higher discount on bulk sell – up to 10%

Place

On trend(Available directly from the retailers) and off trend (Available at canteens, clubs,

restaurants, theatres, jogging courts, sport grounds)

Distribution at Super markets and supermalls through supply chain

Available at Gyms and fitness club

Online delivery

Promotions

Promoted as the health conscious energy drink

Recommended by doctors and physicians

Mass media campaign for brand awareness

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