Plant Focus: Energy Exchange
In order to produce the 35 million cases of Monster energy drinks that are sold each year, Hansen Natural Corp., Corona, Calif., has created several partnerships. The company has a network of regional co-packers and distribution warehouses for production and storage of its carbonated, juice-based and dairy-based line of energy drinks. The variety of formulations are a boon to Monster’s portfolio, but have required additional partnerships with appropriate co-packers.
“Our network has continued to grow at a rapid rate,” says Gareth Bowen, senior vice president of operations. “Monster alone in 2006 utilized six co-packers, and in 2007 we’ve used 11 co-packers. It provides benefits in that we’re able to have more national distribution. It makes it easier to meet orders on time and to ship shorter distances.”
A co-packer near Hansen’s Corona, Calif., headquarters produces Monster’s “green,” Lo Carb and Assault varieties. The plant receives empty Monster cans by truck in full pallets, which are stored onsite until needed. As with all its co-packers, Hansen’s provides plants with the necessary materials and ingredients.
Produced on a traditional carbonated soft drink line, green Monster cans wind through the filler, which loads the cans with regular Monster and then caps and seals the packages. The cans are then checked for fill level and caps are washed. Once the products are checked again and dried, they travel up a vertical ramp to the case packer.
During Beverage Industry’s visit, the line was packing 24-can club packs of 16-ounce regular green Monster. From the case packer, the club packs travel to the shrinkwrapper. Plant workers ensure the pallet is display ready for retailers.
Once the pallets are shrinkwrapped and loaded onto a truck, they are transported from the co-packer to Hansen’s distribution facility in Corona. The 400,000-square-foot distribution facility is located down the street from the company’s headquarters.
The Corona warehouse stores pallets of Monster, Hansen’s allied energy drink brands, fruit beverages and some private label products. The brands’ point of sale materials, additional merchandise and event trucks also are stored at the facility. In addition, the Corona warehouse is capable of repacking cases. During Beverage Industry’s visit, employees were repacking 24-packs of Monster Lo-Carb to create 12-packs that featured a special flyer.
While the aisles in the distribution center are filled with Monster’s multiple varieties, Geoff Bremmer, Monster brand manager, points out pallets of popular new introductions, such as green Monster 24-ounce resealable “cap cans” and Java Monster. The products generally were out of stock so once the pallets were received in the warehouse, they were immediately shipped to fulfill orders.
“With Java Monster, the demand has been so great we haven’t been able to fill all orders,” says Bowen. “It blew away all our initial forecasts and made us scramble to find additional capacity. In November, Java Monster was produced at six times our initial projections.”
Similar stock issues were experienced with Monster’s four-packs that had traditional retailers asking for more at the end of the summer, Bowen says. The four-packs as well as eight-packs are allowing for improved velocity in grocery stores, while the convenience sector remains the brand’s main focus.
“Convenience stores are our first target because it’s such an important part of our business, and convenience stores are often more open to new products,” Bremmer says.
According to Bremmer, the convenience channel makes up about 70 percent of Monster’s sales. Monster works with its network of independent distributors to ensure its products are always on store shelves. The success of green Monster has opened the door for Monster’s innovations, he says.
“Our flagship Monster SKU sales continue to grow in the channel,” Bremmer says. “We’re putting in more SKUs, and velocity sales per outlet on Monster green 16-ounce continue to rise. Generally sales for the flagship product of most brands is the most critical and sales for our flagship have never dipped. The product continues to grow despite line extensions and multi-packs.”
The company maintains a nationwide network of convenience store-focused representatives, which it calls trade development managers. Monster employs 100 trade development managers nationwide who take the time to go into local stores set shelves, sell SKUs and bring in point-of-sale items.
“The trade development managers are experts in their own local area,” Bremmer says. “It’s a time-consuming and important task. Not every merchandiser can accommodate every SKU and put up P.O.S. inside and outside the store. The trade development managers are in the market and have the time, so if they need to take apart a shelf and reorganize it, they’ll do it. It’s a service level that our company has provided from the start.”
To make sure the product is consistent across its network of co-packers in Southern California, Texas, Florida, the Carolinas, Minnesota and Missouri, samples of Monster are shipped from the co-packer to Hansen’s Quality Control Department. In its facility, which is adjacent to the Corona warehouse, Hansen employees test the blended products.
Since May 2006, Hansen has had a distribution arrangements with many Anheuser-Busch distributors for Monster and two other affiliated energy drinks. The Anheuser-Busch network is now one of Hansen’s primary distributors, but it is not an exclusive agreement, Bowen says. The company still has licensing agreements with various distributors in many territories by brand and by channel.
“We strive to streamline the supply chain and utilize services they offer so the product is in the right place to maximize sales,” Bowen says.