Recently, I read an interesting article about Red Bull, the energy drink company. The article totally amazed me. In the past, I haven’t paid much attention to the story of this 40-year-old guy. Finally, I am writing the story of Red Bull and the journey is inspiring.
The Foundation of Red Bull
Dietrich Mateschitz, a former toothpaste salesman with an experience of selling dishwashing detergents for Unilever, founded the company. At the age of 28, he finally graduated with a marketing degree in Austria after 10 years of hard attempts.
Red Bull originally was an energy drink selling and quite popular in Thailand. Unlike Coca-Cola, the ingredients of Red Bull are not patented. Each and every content is listed on the side of the can. Conclude, therefore, this salesman turned an ordinary beverage into a billion-dollar empire.
One question may arise, how did he find out the beverage that was about to change his whole life and career? When he was on a sales trip to Thailand in 1982, a local toothpaste distributor told him that energy drinks were trending products among youth. Dietrich learned that Energy drinks help people to stay awake at night and after he tried it, it totally cured his jet lag.
And he came up with the idea to create his own business around the energy drink. He quit his job at the age of 40 and started the company with the local toothpaste distributor who told him about the drink. Both of them invested $500,000 of savings and were equal partners in the company.
The Challenging Part for Dietrich
Every entrepreneur faces tough times. Whether it be finding investors or building an effective tech team, entrepreneurial life is full of nuances and pain. And things did not go smoothly even for Dietrich as he expected. He tried to apply for a licence to sell his drinks in Austria but for three years he was denied the licence. After many sales calls and negotiations, he finally managed to get the license to sell the high energy drink.
The initial marketing research and experimentation produced negative results for him. Firstly, the people hated the taste and secondly, the drink was way too sweet and people were sceptical of diabetes. After loosing more than a million dollars in two years, Dietrich still firmly believed that the company will be successful.
Both of the partners realized that Austria’s market was not big enough for Red Bull to grow. And they soon decided to expand operations and sales in Hungary, Germany and United Kingdom.
After the tough journey over two years, the company lost almost all the money. Dietrich was unable to spend on advertising. So he found out that only non-traditional marketing techniques can increase their sales. He hired some students to drive cars with a big Red Bull can attach to the top. They walked around colleges and universities to give away free samples to students.
Red Bull distributed free samples at parties and events. Dietrich sponsored exclusive and exciting events that got the company free and a lot of media coverage around the world. The company currently supports around 500 sports athletes who compete in special and often record-breaking events and tournaments.
Till now, the strategy has worked very well for the company. The energy drink giant has 70-90% market share in more than 100 countries. In the US alone, Red Bull enjoyed a 47 per cent share of the energy drink market in 2005.
The company employs around 11,600 people worldwide making the sales volume per employee close to a half million dollars. And the valuation of the company currently stands at $10..6 billion. Top markets included Turkey (+34%), India (+15%) and The Netherlands. The company has sold a cumulative 68 billion cans since Red Bull was introduced in 1987 with a marketing strategy built on extreme events.
The most dangerous thing for a branded product is low interest ~ Quote by Dietrich Mateschitz
Dietrich, the only billionaire in Austria, is ranked #37th in the worlds richest people by Forbes with a net worth of $24.5 billion. He is an extraordinary entrepreneur “who got rich not by inventing a new product but by selling an ordinary one inventively”.