Red Bull profits dip in Australia despite soaring global growth

Posted by AFN Staff Writers on 4th May 2015
Red Bull profits dip in Australia despite soaring global growth
Red Bull profits dip in Australia despite soaring global growth

Global energy drinks company Red Bull has seen its profits in Australia drop for the third year in a row.

Red Bull has battled to keep its top place in the Australian market, with strong competition from energy drink V, which is owned by beverages company Frucor Beverages, and Coca-Cola Amatil’s Mother brand.

Red Bull reported that its Australian sales increased by 3.5 per cent to $199.6 million in the 2014 calendar year, with net profit after tax down 3 per cent to $7.18 million. Two years earlier, in calendar year 2012, Red Bull Australia made a net profit after tax of $14.3 million. The huge drop in reported profits has been attributed to increased marketing costs.

Red Bull was co-founded in the mid-1980s by Austrian businessman Dietrich Mateschitz. Mr Mateschitz created the formula of Red Bull Energy Drink and developed the unique marketing concept of Red Bull.

In 1987, on April 1, Red Bull Energy Drink was sold for the very first time in its home market Austria. This was not only the launch of a completely new product, in fact it was the birth of a totally new product category. Today Red Bull is available in more than 167 countries and around 50 billion cans of Red Bull have been consumed so far.

Red Bull growing globally

Despite its profit dip in Australia, Red Bull continues to show strong growth globally. Australian Food News reported in September 2014 that Red Bull was in sixth position in a list of the world’s most valuable soft drink brands.

According to Canadean, the strength of the Red Bull energy drink in on-premise and ‘on the go’ channels, and ability to withstand the impact of even some of the worst hit country economies in recent years, underlies consumer willingness to pay for a perceived image and personal benefit. Canadean said Red Bull had recorded an annual global average growth in value of 7 per cent since 2008 to reach US$12 billion in 2013.

Global energy drinks growth

Australian Food News reported in April 2015 that the global energy drinks market had advanced by 6.4 per cent in 2014. Energy drinks, like other carbonated soft drinks, are likely to face stronger competition from growth in the bottled water sector. In April 2015, Australian Food News reported that global bottled water consumption was set to overtake carbonated drinks in 2015, according to findings from Canadean.