Coca-Cola finally gets access to a leading energy drink
The Coca-Cola Company, which has for years been seeking to gain a foothold in the increasingly lucrative energy drink sector, has signed a distribution agreement with Hansen Natural Corporation – the makers of Monster Energy, America’s leading energy drink by volume according to A.C. Nielsen data.
The Coca-Cola Company and Coca-Cola Enterprises, Inc. (the primary Coca-Cola bottler in the US and much of Europe) announced overnight that they had completed agreements for distribution of the category-leading Monster Energy drinks line in six Western European countries, Canada and selected territories in America. These agreements will complement Hansen’s existing relationship with Anheuser-Busch and will not affect Hansen’s agreement with AB for the on-premise channel throughout the US.
“We are pleased to be partnering with the world’s leading beverage system to expand the retail presence and penetration of our Monster Energy drinks,” said Rodney Sacks, chairman and chief executive officer of Hansen. “We believe the relationship with The Coca-Cola Company and Coca-Cola Enterprises will enable us to build on the success of our Monster Energy brand in North America and expand into fertile new international markets. In the United States, the relationship will complement our existing long-term arrangements with Anheuser-Busch distributors, which have been and we expect will continue to be very important to Hansen. We believe that the combination of these two leading distribution systems will provide us with an unrivaled distribution network in North America.”
The deal enables Hansen the right to negotiate distribution agreements with other Coca-Cola bottlers, meaning that if Mother doesn’t work out for Coca-Cola Amatil then we could soon see Monster Energy in Australia.
Intriguingly, Monster Energy has already got off to a rocky start in Australia due to Hansen’s failure to register the Monster trade mark. Another company, Bickfords (Australia) Pty Ltd, began selling Monster drinks in Australia in 2006 and were consequently taken to court by Hansen earlier this year for alleged misleading and deceptive practices. There name, product and slogans were very similar to the Hansen product and Bickfords were reportedly aware that Hansen were the number two selling energy drink worldwide but also knew they had not formally launched in Australia.
The case was dismissed as the Court found that substantial advertising and strong sales overseas do not guarantee a reputation in Australia and, given there were no actual sales or promotion in Australia by Hansen at the time of the trial, no restraining order was placed on Bickfords.
Bickfords also launched a counter-claim to try and stop Hansen from ever selling Monster Energy in Australia, but this too was dismissed on the basis that Bickfords Monster drink brand was not strong enough in Australia either. Consequently, distribution of Monster Energy could be complicated for Coca-Cola Amatil if they decide to pursue an agreement with Hansen although, given the limited success of Bickfords Monster in gaining market share, the drink could still be expected to have success here in Australia. The fact that Hansen bothered to initiate court proceedings suggests that they were considering an entry into the Australian market and they may decide to launch another product under the Monster Energy banner, such as Java Monster or Lost Energy, to introduce their brand to Australians.
Coca-Cola have struggled, with limited success, to gain an extensive share of the energy drink sector despite numerous attempts in both Australia and the rest of the world. The distribution agreement with Hansen is consequently anticipated to give them a boost in the coveted North American and Western European markets.
“The Coca-Cola System has taken a multi-faceted approach to becoming one of the key players in the fast-growing energy drink category,” said Sandy Douglas, president, Coca-Cola North America. “We are pleased that our bottlers are now able to distribute this brand as part of our diverse portfolio of leading sparkling and still beverage brands in North America and Europe.”
In Western Europe, the agreement includes the distribution of Monster Energy in all CCE European countries – Great Britain, France, Belgium, the Netherlands, Luxembourg and Monaco.
“Monster Energy drinks are strong additions to our energy portfolio, reinforcing our strategic priority of being #1 or a strong #2 in every category in which we choose to compete,” noted John Brock, chairman and chief executive officer, Coca-Cola Enterprises. “Monster Energy continues to outperform the energy category in the United States, and we look forward to bringing another proven brand to our territories in Western Europe.”