If beverage trends are like fashion, as is so
often said, it’s no surprise that many industry trends begin
on the West Coast and travel through
the rest of the country. Two trends that did just that —
energy drinks and natural beverages — form the core of Hansen
Beverage Co., and that has made its business as sunny as its home
in Southern California.
For years, the Hansen’s name was synonymous with juices
and natural soft drinks, but the company’s sales really picked up
steam when it introduced Monster Energy Drink in 2002. Hansen’s sales
have grown during the past three years from a little less than $100 million
in 2001 to $138 million last year, with another 54 percent increase reported
during the first six months of this year.
Hansen entered the energy drink category early, first with an
energy fruit juice smoothie, and then with Hansen’s Energy Drink as a
contender to then-newcomer Red Bull. The company began to see that its wholesome,
good-for-you image might be holding it back from the kind of sales its Austrian
rival enjoyed. It decided to break loose from its traditional business and launch
the edgy new brand called Monster. With the tagline "Unleash the Beast"
and an unconventional 16-ounce can, the brand jumped to a top spot in the energy
The launch of the Monster product led Hansen to reach in a new
direction, dividing its business into two very different consumer segments and
ways of getting to market.
“We were able to create a brand that had
its own individual personality,” says Hansen Chairman Rodney
Sacks. “It was much more cutting edge, much more
risqué in the image we portrayed for the brand, and the way
we marketed the brand. We were able to do things that
wouldn’t have appealed to our traditional consumer or have
been suitable for the Hansen’s brand.”
Extreme sports, rock concerts and tattooed
brand ambassadors became the Monster trademarks, while traditional
Hansen’s products stuck with healthful, good-for-you values.
The company’s approach to distribution also changed, with
Monster going through a new network of distributors rather than the
company’s own direct-to-retail system.
“We really divided the company’s
focus and management into two different styles,” says Sacks.
“One style was to deal with the traditional natural
Hansen’s brand and image, and the second part of the business
was to go through a direct-store-delivery (DSD) system with
Hansen’s natural juices, soft drinks and
canned smoothies have strong
distribution through all retail channels in the western United
States, as well as natural food outlets and health food sections in
chain stores in the rest of the country. Monster and its DSD
counterparts such as Energade and Lost Energy, go to market via a
national network of about 300 distributors.
Two business tracks
While Monster can take much of the credit for
Hansen’s rapid growth, the company never took its eye off its
more traditional business, and products such as the natural sodas
account for a significant portion of its business. The two
divisions of the company operate autonomously, and each has a
dedicated team to develop products and marketing.
“When you look at new products, the
concepts come from two different places,” says Sacks.
“The guys who are involved in running the traditional
Hansen’s business look at where the opportunities are in the
Hansen’s type products, and the DSD division looks at the
potential opportunities that lie in single-serve, convenience store
type products. We look at those two markets very
Some of the fruits of the company’s new
product development process are a soon-to-be-released Monster line
extension and a tea-based line of carbonated soft drinks under the
Blue Sky natural soda brand.
“It’s common for companies to say
they want to innovate and do something new, but then you look at
what comes out and it looks pretty much like everything
else,” says Mark Hall, senior vice president of the DSD
division. “When we’re looking at a new product
opportunity, we have to say ‘How can we do it differently so
the consumer doesn’t see it as the same old
The company saw one of those opportunities
earlier this year when it launched Lost Energy Drink, a product
targeted at young, skeptical consumers missed by other energy
drinks. It teamed with the surfing industry’s Lost Enterprises to license the name, and decorated the can
with art that is identified with the surf and skate cultures.
“When we launched the Lost brand, we
launched a brand that had its own personality,” says Sacks.
“We didn’t think it would cannibalize our Monster
brand; it was intended to address a different consumer.
“We try to understand the market a
little differently and not just try to put out additional flavors
or facings on a shelf. There needs to be a reason for a brand to
exist or a reason for a line extension.”
While the company says it often speaks to
consumers to generate ideas, it does not rely on them for complete
“I live and breathe our business,”
says Sacks. “I do quite a bit of traveling, and I come back
from Europe with my suitcases filled with beverages, with ideas and
concepts in mind. This might not give you an answer, but it often
leads to something or an idea that we can develop.”
“In the new age category, especially, a
big part of it stems from current pop culture,” continues
Hall. “People are going to try
something new if they like the look and feel of the thing. They
have to be comfortable and identify with the personality the
He says the company achieves a distinct look
for its products by working with edgier, sometimes unknown artists
rather than standard graphic designers.
“When we decided to redesign one of our
products we went out and found an underground artist for the
design,” he says. “He doesn’t design beverage
products, he does interesting art that speaks to people, young
people. His art is very iconic in nature.”
Hansen’s also chose a unique design for
its new Blue Sky tea-based soft drinks. The idea for the products
began in house, says Hilton Schlosberg, vice chairman, president
and chief operating officer, and the company recently launched the
product in green tea, red tea and white tea varieties.
“We chose a graphic artist to design a
can that reflected the Asian feel of the product. We came up with
something that looks good and fits the style of the product,”
Do-gooders and tattoo artists
Like the products themselves, Hansen’s
marketing follows very different tracks. Both natural products and
energy drinks use event marketing as a promotional tool, but the
juices and natural sodas are tied into cause marketing, and energy
drinks with athlete endorsements, concert tours and extreme
“We had to rough it up a bit,”
says Hall about developing the Monster marketing strategy. “A
lot of our sponsored athletes are covered in tattoos. Whether our
consumers actually look like that or will ever look like that, it
doesn’t matter. People are attracted to that aggressive style
and rebellious image.”
The company hires product samplers who hand
out drinks from Monster trucks with oversized wheels and wild
graphics — a far cry from the typical beverage
executive’s vehicle of choice, and that’s just the
point. “It doesn’t do any good for me to go to a
concert and hand the drink out, I don’t fit the brand
image,” says Hall.
“We have more than 100 people in the
field right now. We take a hands-on approach. I don’t know if
there is another beverage company our size right now that has
invested in the field support we have.”
But no matter what body art Monster
representatives might have, Hall says,
the company trains and tests its product samplers to ensure they
provide accurate information about the products.
“When you’re trying to put the
right personality on a brand, it’s really easy for it to get
twisted,” he says. “When we first came up with the
Monster brand, we chose the claw icon because it fit the name and
the aggressive personality we wanted to portray. Right away, some
people wanted to give it a horror image and do Halloween
promotions. We had to say ‘it’s not about Halloween.
Monster means extreme, it’s dramatic.’ You have to
constantly massage the message to project the right personality.
Monster is the meanest energy drink on the planet.”
Taking a gamble Hansen couldn’t have hoped
for a marketing opportunity more befitting the extreme Monster brand than this
year’s sponsorship of the Las Vegas monorail. The company didn’t
just put its name on the shuttle, it painted the train black with the trademark
claw logo, secured vending rights at monorail stations, and is even outfitting
the inside of the monorail cars with video screens to convey the Monster lifestyle.
“This was a big spend for us and it was
a unique opportunity to be able to, in one location, reach what is
expected to be 35 million visitors to Las Vegas each year,”
says Sacks. “We were able from one unique venue to reach
consumers throughout the United States. We believed it was
something that a small company like ourselves would very rarely get
the opportunity to have.”
On the opposite end of the spectrum, but just
as appropriate for the natural beverage brands, Hansen teams up
with causes such as City of Hope and licensed children’s
characters such as Clifford the Big Red Dog. Hansen’s Natural
Sodas feature a per annum “Save Lives, Send Tabs”
campaign during which the company donates as much as $100,000 to the City of Hope cancer research
center. Blue Sky products are paired with fundraising for the
Society for the Prevention of Cruelty to Animals, and the Jr. Juice
brand Hansen acquired from Pasco in 2001 features the Clifford
character and book give-aways.
Last year, Hansen landed an exclusive
three-year Women, Infants and Children Supplemental Nutrition
contract in California for 100-percent apple juice and apple grape
juice in 64-ounce bottles.
According to Schlosberg, the contract is a
reflection on the company’s ability to both develop
well-branded products and to manage the cost structure of its
“One hundred-percent juice is a very
important product for us, but it’s a product in which your
success is measured in cost per ounce,” he says. “One
of the skills we have at this company is that we understand our
The state of California estimates that
Hansen’s will supply nearly 24.5 million bottles of apple
juice and 5.4 million bottles of apple grape juice blends per year
through the contract.
Hansen’s diet natural sodas, which were
introduced with Splenda a few years back, also have been a boon to
the business, especially with today’s weight concerns.
“The diet sodas have zero calories, so
whether you’re on a low-carb diet or a low-calorie diet, it
still appeals to that consumer,” says Schlosberg.
“Hansen’s sodas have traditionally been bought by moms
for children. Now we have a product that can be bought by mom for
The company rolled out a low-calorie version
of Monster last year, but chose not to make it a “diet”
drink. It simply changed the color on the claw logo from green to
blue for consumers who are calorie conscious, but don’t
necessarily want to advertise it.
“Low-carb is a sexy way to say diet
right now,” says Hall. “A diet is something
you’re on when you want to lose weight or have a health
concern. It can have a negative cogitation. Low-carb is a way to
say reduced calories that, for the time being, is in fashion.”
Energy drinks will continue to be a big part
of Hansen’s business, but the company says future offerings could look quite different than today’s.
category is going to evolve,” says Hall. “We think
there are hybrid products that will rely on the energy foundation,
but they will have a different platform and will look very
different from what we have
And if the energy within Hansen itself continues, the industry
can count on more innovation and a willingness to go in whatever direction that
takes the company. Posing for a photo, and quoting a song popular in the ‘80s,
they joke, “The future’s so bright, we have to wear shades.”
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