Soft drink giant, Coca-Cola, has received an approval to market its new trademark energy drink across the globe.
Coca-Cola and Monster Beverage Corp announced in a joint statement that the arbitration tribunal looking into whether Coca-Cola violated the terms of a 2015 agreement with Monster not to sell its energy drink as it would put the company in direct competition with Monster Energy drink ruled that Coca-Cola can continue to sell and distribute Coca-Cola Energy, including in markets where it has already been launched and is free to launch the product in new markets globally.
Coca-Cola launched the energy drink in April as part of efforts to provide healthier alternatives to consumers who had grown weary of its fizzy soda.
The new Coke energy drink contains caffeine, Guarana extracts, and B vitamins and is targeted at 18 – 35 year age group. The launch has drawn it into direct competition with market leaders Red Bull, Lucozade, and Monster energy drink which Coke holds a 16.75% stake in and remains its largest shareholder
Monster Beverage is also considering expanding its business line beyond energy drink. At a shareholder’s meeting last month, Rodney Sacks, CEO, Monster Beverage said the company was looking to grow its portfolio into different categories beyond energy drinks.
“We do have an appetite to look at alternative brands and to develop more beverages in the non-alcoholic … as well as the alcoholic market,” he said.
“There are other products in alcohol, whether on the malt side, hard seltzer or hard alcohol/spirits side, they may be a good opportunity … it’s something we would certainly be open to,” Sacks added.
In recent times, there has been an increase in the number of energy drinks in the Nigerian market. The brands usually come in varying sizes and they are regarded as energy-giving drinks, capable of re-invigorating consumers, after a hectic day’s job.
Major players in the energy drink market include Monster Drink from Coca-Cola, Bullet Energy Drink from the stables of Sun Mark Limited, Red Bull an energy drink sold by Red Bull GmbH, an Austrian company, and Power Horse by S. Spitz GmbH, another Austrian company.
Energy drink producers are now positioning their brands based on product innovation and repackaging at the backdrop of rising concern over consumers’ health. The value proposition for energy drinks is the fact that it enhances mental and physical performance because of the ingredients, the chief of which is caffeine. This has raised concerns among many on the health implications of caffeine.
Brand owners are now claiming to have reduced the caffeine content. But despite the reductions, the products have remained in controversy due to their cardiovascular risk, as the producers have not deemed it necessary to warn consumers or even state the composition of the chemicals in their products labeling.
Product innovation and repackaging taking place in the energy drink market has also forced the producers to bring the products closer to consumers, through the direct marketing approach, as well as adopting the in-door display methods in stores to attract consumers’ patronage. The brands have also adopted the signing of celebrities and football stars to help put their brands in consumers’ faces.