Red Bull

Red Bull looks to South America for ongoing success

Red Bull has received approval from Brazil’s state development council for the installation of a soft drinks plant in the country, the first plant in the world to be fully owned by the Austrian energy drinks maker.

The plant will be located in Manaus, the capital of the state of Amazonas, says a spokesperson for Red Bull US says. An initial investment of $111.4m is planned, and the plant is expected to generate upwards of 200 jobs between direct and indirect positions.

Writing on just-drinks.com, Richard Corbett comments that, thirty years into its history, this will be an important step in ensuring ongoing success of the brand.

He writes:

“… Red Bull already lays claim to around half of the country’s energy drinks market. It’s a good market to be in too; according to beverage research agency Canadean, last year, energy drinks sales are predicted to have jumped by 21% in Brazil. Once again, marketing has played its role: Brazilians love their football and Formula One, and Red Bull’s involvement in both sports has contributed to its sucess.

The choice of building their first fully-owned facility in Brazil, then, seems to be quite a straightforward one. Not only is demand per capita for energy drinks set to double in the next five or six years in Brazil, but the country will be a gateway to the rest of Latin America. It is also a market that will be the focus of many of the global beverage big guns in the future. It is another reminder that Red Bull now sits at the top table.

Importantly, local production will enable Red Bull to be more competitive on price, a considerable barrier to Red Bull being more mainstream in this part of the world. In Brazil last year, there were around 30 regional bottlers producing lower-priced energy drinks. Even in the more affluent West European markets, where the Red Bull brand cut its teeth, price was a considerable handicap. Although the brand could consistently fend off most of the ‘me-too’ brands that sprung up in many countries, considerable share was conceded to private label and B brands in the supermarkets.

Being competitive on price in Latin America will be an important factor in facilitating the development of the brand. It will also ensure that the Red Bull story carries on for another 30 years.”

Source: just-drinks.com