Monster Energy advertising & marketing assignments

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Independent drinks company Hansen Natural bowed to public taste in 2012 and renamed itself after its lead brand Monster Energy, which has been one of the world's fastest-growing soft drinks since its launch in 2002. Key to that success since 2008 has been a pact with the Coca-Cola bottling system, initially just in the US. In 2014, Coke acquired a stake in the business for $4.2bn, transferring responsibility for its own energy brands - including Nos, Burn, Full Throttle, Mother and Relentless - to the smaller company. It has gradually assumed worldwide distribution rights to the combined portfolio, building a footprint for Monster in more than 150 countries. Coke's additional muscle has firmly established Monster Energy as the global #2 in the market, close behind leader Red Bull in several key markets, including the US. Monster remains the dominant brand in the portfolio, but is supported by a varied collection of other products: not just the brands inherited from Coca-Cola but also creations of Monster's own such as Reign Total Body Fuel and Predator. However the relationship is not entirely peaceful: in 2018, Monster sought independent legal arbitration after Coca-Cola announced plans to launch its own energy drink under the Coke banner. The situation was eventually resolved amicably. For 2019, Monster Beverage achieved new highs in both revenues and profits, with net sales of $4.2bn and net income of $1.1bn. Total volumes were 449m equivalent cases. The architects of Monster's success are the South African entrepreneurs Rodney Sacks and Hilton Schlosberg who acquired Californian juice manufacturer Hansen Natural, first established in the 1930s, in 1992 and used it as the vehicle for the launch of a rival to Red Bull. Sacks remains CEO with Schlosberg as president & CFO. Together they control 10% of shares, while Coca-Cola has gradually expanded its own stake to 19%. The remaining shares are publicly owned.

Capsule checked 30th April 2020

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Recent stories from Adbrands Update:

Adbrands Daily Update 1st Jul 2019: Coca-Cola and Monster Beverage resolved their differences over the launch of Coca-Cola Energy. Coke acquired a minority stake in Monster in 2015 and transferred its own collection of energy drinks to the smaller company. It also agreed not to introduce any new energy drinks of its own, but with one important exception: if they carried the Coca-Cola brand. After Coke announced plans to launch Coca-Cola Energy last year, Monster filed for independent arbitration of the situation. The arbitrators have now come back with confirmation that Coke may proceed. "The companies respect the arbitrators' decision and appreciate that the dispute was resolved amicably," said Coca-Cola and Monster in a joint statement. "While there was a disagreement between Coca-Cola and Monster over contractual language, the companies value their relationship and look forward to their continued partnership."

Adbrands Daily Update 2nd April 2019: We knew it was coming because of a legal skirmish which launched last year between Coca-Cola and its minority-owned subsidiary Monster. Now it's confirmed: Coca-Cola will launch its first Coke-branded energy drink in Europe later this month. Coca-Cola Energy is enriched with caffeine, guarana and B vitamins, and debuts in Spain and Hungary later this month in both sugar and no sugar forms. Additional countries will follow in due course. Legal arbitration is still ongoing between Coca-Cola and Monster over the launch. Under their original deal Coke transferred all its existing energy drinks to Monster and agreed not to launch any further such products. However it left one significant loophole: the agreement didn't cover Coke-branded energy drinks. Monster want a judge to arbitrate on this new launch to determine whether compensation is payable for any detrimental impact on Monster's own sales.

Adbrands Weekly Update 15th Nov 2018: There's a dispute brewing between Coca-Cola Company and the energy drinks marketer Monster in which it acquired a minority stake in 2014. At the time of that deal, Coke transferred control of all its existing energy drinks, such as NOS, Relentless and Burn, to its new partner, while at the same time taking over distribution duties for the Monster portfolio. Their agreement prohibited Coke from launching any new energy products outside the Monster partnership, but with one significant loophole. That restriction didn't apply to drinks carrying the Coca-Cola brandname. Now Coke wants to launch two new caffeine and guarana-enriched drinks of its own under the name Coca-Cola Energy. Monster's CEO Rodney Sacks is seeking legal arbitration. Both sides insist the dispute is amicable. "We've agreed to go to arbitration civilly and determine what course of action is appropriate," said Monster CFO Hilton Schlosberg.

Adbrands Weekly Update 21st Aug 2014: Coca-Cola made a long-expected move on Monster Energy, acquiring a 17% stake in the smaller company for $2.15bn in cash. It already handles distribution in selected markets in Europe and the US. Under the arrangement, Coke will transfer management control of its own existing stable of energy brands, such as Burn, Relentless and Full Throttle, to Monster while in return taking over the smaller company's non-energy drinks including Hansen Natural and Peace Tea. It will also gradually assume global distribution duties for the Monster brand, currently divided between several other local partners. The enhanced partnership is widely expected to lead to a full buy-out of the business in due course, a staged acquisition strategy similar to that employed with UK-based smoothie and orange juice producer Innocent, which Coke now wholly owns. More recently Coke acquired what is now a 16% holding in Keurig Green Mountain, the developer of the enormously popular US home drinks system. For now, Monster's board has capped Coke's holding at no more than 25% before 2018, but it can withdrawn that restriction at its own discretion to allow a full buyout. That could be expensive for Coke. Monster's share price rocketed in the wake of this week's deal, pushing its market cap to around $15.5bn. 

Adbrands Weekly Update 3rd Apr 2014: Industry watcher Beverage Digest published a gloomy analysis of the US liquid refreshment (LRB) market, saying that "challenging recent trends... continued and worsened in 2013". Total liquid refreshment volumes, including both still and sparkling beverages, fell for the first time in several years (by 1.6%), and the rate of decline among carbonates increased sharply to 3.0%, almost three times last year's fall. Sales of carbonated soft drinks (CSDs) peaked in 2003 and have been declining steadily ever since. The latest slide returns the sector to volume levels not seen since the mid 1990s. The big three of Coca-Cola, PepsiCo and Dr Pepper Snapple all suffered volume declines in both total carbonated drinks and the wider LRB market, and virtually all the top brands, including Coke, Pepsi, Mtn Dew and Dr Pepper suffered a fall. Of the top ten CSDs, only Sprite enjoyed an increase in volumes, and that by a measly 0.1%. Coke Zero crept into the top ten for the first time, displacing faster-declining Diet Dr Pepper. Coca-Cola's Dasani water was a rare exception in the wider LRB market with an impressive 5% hike in volumes. Rivals such as Nestle Pure Life and Poland Spring managed less than 1% apiece. Energy drinks currently sit just outside the top ten brands in both the CSD and LRB categories, but are likely to force their way in this year or next. Currently Monster Beverage Corp and Red Bull have share of 1.6% and 1.3% respectively, having both grown by 0.2% during 2013. At current rates Monster could take the #10 spot by volumes among CSDs from Coke Zero for 2014.


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