Energy Drinks and Fast Food Restaurants Go Together Like…
What does the Jager Bomb have to do with the popularity of energy drinks in the U.S.?
Believe it or not, energy drinks have only been around in the U.S. for just over two decades. In 1997, the Austrian-born Red Bull was introduced in California.
It wasn’t an instant success, but within the first year it quickly grows to sell more than 5 million cans in that first year.
How did they do it?
On-Premise…
During the early days of the U.S. expansion, Red Bull was incredibly strict about how they entered all new markets. The game plan was to create a brand emotion to reinforce a lifestyle with this new idea of an “energy drink.” They would start by penetrating the hottest bars and nightclubs by offering free coolers. Quickly after, the bartenders learned that this new drink was a money machine and drinks like the Jager Bomb became a part of the American lexicon.
Though starting on-premise helped reinforce a brand emotion for Red Bull, it also gave a premium price perception to the earliest adopters. Then, as Red Bull shifted its market penetration plans to focusing on a handful of key convenience chains near colleges and other consumer hotbeds, the early adopters did not shy away from the $1.99/can price. That might seem like a fair price today, but you have to remember that back in 1997, you didn’t have the same level of “energy offerings” or substitutes to compare the new product innovation. That price was high for most people that were used to using cheap coffee (Starbucks had less than 2,000 global locations compared to the 17,000+ today) or carbonated soft drinks for energy.
On-premise was the key element of introducing the energy drink to the U.S. consumer, but can the sales concept also help the beverage category into its rightful place on the “Beverage Mount Rushmore”?
I believe it can, but this time the on-premise target though won’t be the hottest bars and nightclubs, it will be the fastest food restaurants!
Meet the concept that I am calling “On-Premise 2.0”
On April 29th, 2019, Sonic Drive-In will start serving Red Bull Slushies nationwide in its 3,500+ locations. This is the first time Red Bull has collaborated with a fast-food chain.
Now, as much as I would like to give Sonic Drive-In and Red Bull all the love for this new partnership, this isn’t the first attempt at an idea like this…
- Hardee’s & Carl’s Jr. and Monster Energy first tried this idea in 2009, but I didn’t see it on the (digital) menus today
· McDonald’s and Monster Energy tested it in 20 locations starting in late 2015, but I haven’t seen any information good/bad on the tests.
- White Castle and Monster Energy partnered in 2016 with a nationwide launch in about 400 locations. This is the only known partnership that has stayed active.
Today, energy drinks have become a legitimate part of the caffeinated American culture. It should not be the looked at differently than coffee by fast food restaurants. The partnership between Sonic Drive-In and Red Bull might not have been the first, but it is the biggest to date. Will other fast food restaurants look to this partnership’s success to gauge how they can jump on board with offering energy drinks?
Only time will tell, but I know energy drink companies are salivating at the opportunity! How much are they salivating?
In 2015, a well-respected beverage analyst predicted it would increase Monster Energy’s sales by $1.5 billion yearly, if the McDonald’s tests were successful and they offered the energy drinks to all 14,000+ U.S. locations.
