AI SALES SUMMIT - 2/26 & 2/27
Prepare to embark on a journey of innovation and growth at our highly anticipated annual virtual Sales 3.0 Conference, AI Sales Summit.
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AI SALES SUMMIT - 2/26 & 2/27
Prepare to embark on a journey of innovation and growth at our highly anticipated annual virtual Sales 3.0 Conference, AI Sales Summit.
Sign up Now
Red Bull is an energy drink that doesn’t do well in taste tests. Some say it’s too sweet. Others just shake their heads, saying, “No.” Its contents are not patented, and all the ingredients are listed on the outside of the slim silver can. Yet Red Bull was still the leading brand in the U.S. energy drink market as of May 16, 2021, and worldwide Red Bull sold 7.9 billion cans in 2020, up from just over 4 billion cans in 2011.
Says Red Bull founder Dietrich Mateschitz, “If we don’t create the market, it doesn’t exist.”
Mateschitz’s secret to creating a $16 billion worldwide stampede for Red Bull lies in a highly ingenious “buzz-marketing” strategy that herds consumers to exclusive and exciting events that get high media coverage. Red Bull supports close to 500 world-class extreme sports athletes that compete in spectacular and often record-breaking events across the globe. Mateschitz explains, “We don’t bring the product to the consumer, we bring consumers to the product.”
Today Red Bull is a powerful global brand and very few customers know the story of the highly talented, creative and determined salesman, publicity-shy Dietrich Mateschitz. Tiny Austria’s wealthiest billionaire, Mateschitz, located his office in the quaint lakeside village of Fuschl, near Salzburg, Austria. The global headquarters for Red Bull boasts state-of-the-art creative spaces to stimulate collaboration and creativity; and the spacious campus encourages biking, hikes as well as social gatherings at its lakeside areas. His large collection of vintage airplanes is located in a steel and glass hangar, which serves as an aviation museum and the home of the Flying Bulls at Salzburg Airport. He tries to keep things simple, working three days a week. Mateschitz farms out the production and distribution of the nearly 8 billion cans of Red Bull sold worldwide in more than 170 countries. The total number of employees worldwide has grown to more than 12,000, which brings the sales volume per employee to more than half a million dollars. Mateschitz not only generates brilliant sales and marketing ideas, he is equally talented in the execution of the biggest and boldest business ideas. His many projects include involvement across the world of sports and entertainment, including a $1 billion motor sport and aviation theme park in Styria, Austria.
Mateschitz grew up in a small village in Styria. His father, whom Mateschitz didn’t meet until age 11, was held in a POW camp long after WWII ended. Mateschitz was surrounded by teachers, but he wasn’t a good student. When he turned 18, he went to the University of Vienna. It took Mateschitz 10 years to finally graduate with a degree in World Trade. His friends said that Mateschitz liked to play, party and pursue pretty women. After graduation he decided to get serious and become a “really good marketing man.” His natural charm helped him land a training position at Unilever, and soon he was promoting dishwashing detergents and soap all over Europe. Colleagues described him as “funny, full of ambition and always filled with crazy ideas.”
Mateschitz had a natural talent for selling. He was creative and had a knack for getting things done. He soon got promoted to the position of marketing director for a leading, international toothpaste brand called Blendax.
After years of traveling and selling toothpaste around the globe, Mateschitz came to the realization that most successful managers live out of a suitcase, slowly turning gray and seeking comfort from a bottle or lonely women sitting in a bar. Mateschitz wanted more out of life; he expected more of himself and soon became obsessed with the idea of creating his own business.
To many people in Austria, Mateschitz has ambitions that know no boundaries. When he goes to a party, people on Europe’s “A” list show up. When he is the host, such international stars as Naomi Campbell or California Governor Arnold Schwarzenegger appear. Born on May 20th in the sign of Taurus, Mateschitz goes after opportunity like a bull homing in on a matador’s red cape.
In the summer of 1982 Mateschitz read a story about the top 10 taxpayers in Japan. He was surprised that a certain Mr. Taisho, who had introduced a high-energy drink to Japan, made the top of the list. On the next stop of his sales trip – in Thailand – he learned from a local toothpaste distributor that energy drinks were a hot item among tired drivers stopping at gas stations. The top brand was “Kratindaeng,” meaning water buffalo. The ingredients were clearly written on the can. Like the original Yellow Pages, there was no trademark or patent to protect the formula.
Besides water, sugar and caffeine (equivalent to that in a cup of coffee), this drink contains an ingredient named taurine, an amino acid that, according to Japanese studies, benefits the cardiovascular system. Sitting poolside with Chalerm Yoovidhya, the son of the toothpaste distributor, Mateschitz suggested that they form their own company with the objective of introducing energy drinks around the world. Each partner would contribute about a half a million dollars in start-up capital. Soon after the fateful meeting, the optimistic 40-year-old Mateschitz quit his job and applied for a license to sell the high-energy drink in Austria.
Mateschitz recalls how his Austrian friends reacted, saying, “They didn’t think it would work.” They thought that he had made the mistake of investing his life savings in a fad that would fade. The Austrian bureaucracy didn’t allow the drink to be sold without scientific tests. It took three years and many sales calls to get a license to sell the product. While waiting for the official license, Mateschitz asked his old school friend Johannes Kastner, who ran an advertising agency in Frankfurt, Germany, to design the can and logo. Mateschitz rejected dozens of samples before settling on a macho logo with two red bulls charging each other. Kastner worked diligently on a snappy slogan, but Mateschitz rejected one after the other, each time saying, “Not good enough.”
Kastner told Mateschitz to find someone else to come up with a better slogan, but Mateschitz pleaded, “Sleep on it, and give me one more tagline.” The next morning Kastner called and said, “Red Bull – gives you wings.” The slogan turned into a prophecy for the Red Bull brand, which continues to soar around the globe.
Mateschitz still had to find a bottler to produce his drink. Every bottler he called told him that Red Bull had no chance of success. Finally, Mateschitz found a sympathetic ear in Roman Rauch, the leading soft-drink bottler in Austria, and soon the shiny silver cans rolled off the production line. Within two years, and after many creative promotions, sales began to grow, but so did his losses. While a million-dollar loss in two years may scare an entrepreneur into closing the business, Mateschitz was undaunted. He says, “As long as I can think clearly, I can think of alternatives. All you need is bright eyes and a clear mind.” After he spent his life savings on the startup, Mateschitz financed everything without outside capital, and by 1990 Red Bull was in the black. He soon realized that Austria wasn’t a big enough market, and in 1993 he expanded to selling red bull to the neighboring Hungary and then focused his energies on conquering the German market.
Once the news of Red Bull’s advancing red bull sales spread in Europe, dozens of copycat competitors came on the market. Red Bull’s initial move into the German market was highly successful. After three months of skyrocketing demand, Mateschitz could not get enough aluminum to produce the cans anywhere in Europe, and sales of Red Bull dropped faster than Led Zeppelin. A competitor named Flying Horse became the market leader. It took Red Bull four years to reclaim the top spot in the German market.
The expansion to England proved to be even more challenging. The British marketing team was unable to use the term “energy drink,” since a pharmaceutical company owned that label. That forced Red Bull to use the term “stimulation” as a tagline to the logo. In two short years, Red Bull’s English operation was $12 million in the red, with only 2 million cans sold. Mateschitz fired the entire staff, pulled the product from pubs, and appointed an Austrian marketing director who concentrated on nightclubs and the student market.
In order to reach consumers without spending millions on advertising, Mateschitz resorted to buzz marketing to stimulate sales. He hired students to drive Minis with a big Red Bull can strapped on top. They cruised around campuses and offered free samples at parties.
The rules for creating buzz are astonishingly simple. Marketers need to reach the “alpha bees,” and if they like the product, they will tell other people about it. The authority of one alpha bee can influence the buying habits of hundreds. The student marketing buzz boosted sales, and by the year 2000 Red Bull’s sales in England soared to 200 million cans, which came close to its total of steadily growing sales in Germany.
Not every European country welcomes the sales of Red Bull. Denmark and Norway restricted distribution of Red Bull to pharmacies. Claiming health concerns, French authorities refused to authorize the sale of Red Bull in stores. Although France clipped Red Bull’s wings, Mateschitz isn’t discouraged, saying, “We are selling in 106 countries worldwide; we’ll save France for last.” He refuses to give up because he knows that his energy drink is not a health hazard.
Mateschitz thrives on resistance. Always eager to push the envelope, he’s hatched spectacular new marketing ideas that get consumers to flock to events where extreme sports athletes perform stunning acts that leave audiences gasping for air. Events include street luge (including jumps of 94 feet), air acrobatics, surfing a 25-foot tidal bore for 34 minutes on the Amazon River, rail-sliding, mountain bike free-ride competitions, motocross freestyle rallies and many more.
Mateschitz supports close to 500 daredevil, world-class athletes who come to invitation-only events from all corners of the world. While such countries as France put up boundaries to keep Red Bull out, Mateschitz knows no boundaries, and he sees no contradiction when he invites French athletes to compete in his events. Case in point, last year, the 24-year old Frenchman Cedric Gracia won the 2003 Red Bull Rampage (a world-class, extreme mountain bike competition) in Utah.
Last year Mateschitz sent a message to the French market and the world that the wings of Red Bull are alive and well. He sponsored an extraordinary stunt performed by the Austrian air acrobat Felix Baumgartner, who became the first man to fly the English Channel (22 miles) from Dover, England to Calais, France with a special 6-foot delta-wing made of carbon fiber strapped to his back. Baumgartner wore a special suit to insulate him against the freezing temperatures (minus 55 degrees Fahrenheit) when he jumped out of the airplane at 33,000 feet. He used oxygen for the first few minutes while he flew at a speed of more than 220 miles per hour. After less than seven minutes, Baumgartner pulled his parachute and landed safely in France. TV footage of Baumgartner’s world record event and the Red Bull logo were seen by more than 200 million people around the world.
Today, special Red Bull events take place in Australia, Asia, Africa, North America, South America, Russia and all over Europe. The pre-event parties include professional DJs, appetizers, photogenic women and plenty of Red Bull. Some events, like Red Bull’s Flugtag, draw crowds of 50,000 people or more.
There are always Red Bull signs in full camera view, an obligatory post-event party and, of course, extensive media coverage, including network TV and follow-up publicity on www.redbull.com, a spectacular global Website.
With an indomitable spirit for turning setbacks into comebacks, Mateschitz set his sights on the U.S. and started to test-market Red Bull in California. In April 1997 he started to compete against the aging soft drink lion Coca-Cola. The slim 8.3 oz. can of Red Bull contains less than half the amount of liquid as a bottle of Coke, but it packs far more caffeine (80 mg), which gives it the advantage of greater efficiency. In the first year, Red Bull sold more than 5 million cans in California.
Red Bull replicated the buzz strategy that worked so well in Europe. Volkswagen Beetles with huge Red Bull cans strapped to their backs showed up at the beach, at colleges, gyms, office buildings or construction sites with free samples where people might need a boost. Congenial Red Bull salespeople (called “Musketeers”) offered free coolers to bars, and soon bartenders learned that this new drink was a money machine. Red Bull mixed with vodka or Jager became one of the hottest drinks across the nation. Bars in LA charged $10, in New York $12 and in Miami $16. Soon Red Bull was flowing across America.
The U.S. marketing buzz and bull machine spun tales that were picked up by the press. Red Bull’s slogan “gives you wings” led newspaper reporters to print quotes from consumers like “You can get drunk and stay wide awake,” or “It’s the poor man’s cocaine.” One rumor even claimed that the drink contains bull testicles.
Mateschitz enjoys the free publicity, but he is single minded when it comes to framing the real purpose behind his energy drink, saying, “The motivation to have a Red Bull at night is the same as during the day, to wake up, be at your best, and have fun.”
As in Europe, news stories of Red Bull’s sales success spawned competition and many Red Bull imitation products were introduced to the U.S. market. SoBe’s Adrenaline Rush occupies second place with 12 percent market share. Anheuser-Busch has a drink called 180, Coca-Cola markets KMX and Pepsi sells AMP. All come in slim cans but none come with the energetic and emotional brand image that marketing master Mateschitz created.
There are also smaller competitors like Pink, Vegas, Go Fast or Rockstar, with small sales teams calling on bar owners and trying their best sales pitches against Red Bull’s marketing power. Four former Red Bull North America executives believe that they can compete against their former employer with a new drink named Roaring Lion. The sales pitch on their Website (July 04) tries to persuade bar owners by saying, “At $1.33 per can, the market-leading energy drink is your most expensive nonalcoholic mixer…Roaring Lion saves you 80 cents per 8.3 ounces. On a current usage of 50 cases per month of energy drink, you can expect to save $990 per month.” A beverage industry executive laughed at the threat, saying, “Red Bull’s sales keep on soaring; Roaring Lion is still snoring.”
According to the Statista, as of May 2021, Red Bull was the leading brand in the U.S. energy-drink market with a 23.3% percent market share and sales around 2.89 billion U.S. dollars.
A few years before he launched Red Bull, Mateschitz developed a passion for flying. Once his company turned substantial profits, he funneled the excess cash into a superb collection of vintage aircraft. In 2000 he created a Red Bull subsidiary, named it Flying Bulls and purchased and restored such planes as two Corsair fighter-bombers, a twin-engine DC-6 that belonged to former Yugoslav Communist ruler Tito, a T-28-B trainer, four seaplanes, and a Bell 47 helicopter – 16 planes in all to date. To create a suitable home for his growing fleet of Flying Bulls, Mateschitz worked with an architect to create a 60,000-square-foot airplane hangar. Not just a simple utilitarian box to store aircraft, mind you, but a superb wing-shaped glass and steel air museum that not only displays each plane with an impressive Red Bull logo, but also has a lounge and a first-rate restaurant that rotates famous chefs from around the world. The builders used 1,200 tons of steel and 1,754 different-size panels of special glass.
To transcend the boundaries of aviation, Mateschitz added an art collection to the air museum that he branded Hangar-7. Recent exhibits included the photographic collection of the Wright brothers and sculptures and paintings by Jos Pirkner who designed the Taurus trophy for the winner of the annual World Stunt Awards.
At night the access road to Hangar-7 lights up like a runway to signal the visitor that this is a special place that gives wings to your imagination. After dinner, visitors can enjoy a drink at the bar called 360, which is located under the domed ceiling of the hangar and is accessible through a ramp that leads from the restaurant to the bar. What makes the bar the hottest place in Salzburg is the glass floor that allows patrons below to look at the soles of the feet of the bar guests 30 feet above. The bar is open every night until 3 a.m.
Occupants of the bar have a spectacular view of the aviation museum below. Special lights embedded in the museum floor light up at night and give the visitor the impression of looking at the stars in the sky while they see the dark shadows of the aircraft below. A stickler for detail, Mateschitz decided that the star constellation must replicate the night sky of the day of the opening of Hangar-7. At the opening party of Hangar-7 last year, more than 2,000 VIPs paid $600 each to walk on a 100-foot red carpet, flirt with the press, tour the hangar, enjoy a fabulous reception and witness a spectacular air show that contained 15 different aerial scenes that followed themes from Greek mythology. For example, Zeus transformed from a bull into a fighter plane, and four violinists played a concert in four separate Blackhawk helicopters.
Every Red Bull vintage plane in Hangar-7 is meticulously maintained and in top flying condition. In fact, every plane housed in the hangar has a full tank and is ready to roll out to the Salzburg airport runway and take off. On weekends, Mateschitz likes to take one of his planes out for a spin, flying over the beautiful meadows of the Salzburg lake region and enjoying the landscape below.
Arnold Schwarzenegger, Red Bull, and The Taurus Awards Five years ago, Mateschitz called Arnold Schwarzenegger with his “big idea” – to create an annual award for the world’s best stuntmen and stuntwomen. Arnold didn’t buy the idea, saying, “We already have too many awards in Hollywood.” But Taurus Mateschitz displays an uncommon tenacity when it comes to turning ideas into reality. Like a bull, he locks horns with adversity and never gives up.
Mateschitz went back to the drawing board and began to recast his unique selling proposition. He began thinking about the needs of the actors who risk their lives performing dangerous stunts and established the Taurus World Stunt Awards Foundation, seeding it with a personal check. He also mandated that the proceeds from the awards show and related fundraising activities would help perpetuate the grant fund dedicated to the support of stunt performers in need. Stunt performers can apply for a financial grant in the event of any disability. Mateschitz commissioned artist Jos Pirkner to create The Taurus, an impressive 31-inch bronze statue that weighs more than 26 pounds. On May 20, 2001 (Mateschitz’s birthday), the first Taurus World Stunt Award show was held in LA.
As a politically correct gesture to his Austrian buddy, Mateschitz handed Schwarzenegger his own Honorary Taurus Award. Few people in the audience had a clue what a gigantic sales effort enabled the show, which has grown bigger with every year. Even fewer people watching the star-studded award show on national television noticed the clever and subtle visual connection between the huge wings of the Taurus statue and the catchy Red Bull slogan “gives you wings.” It was Mateschitz, the subliminal image maker, who pulled the greatest Hollywood stunt.
In May of 2004 Mateschitz celebrated his 60th birthday. At an age where the average Austrian ponders retirement, the Red Bull founder, whose net worth according to Forbes magazine is more than $1.4 billion, announced even bigger plans that dwarf everything he’s done before. Mateschitz has hired a team of 40 people to work on his idea of a motorsport and aviation theme park with a price tag of $1 billion.
Including four open-air arenas capable of holding between 6,000 and 100,000 spectators, the park will be completed in three years. One of the racetracks will be reserved for Formula 1 races. Visitors will be able to race cars and go-carts, ride Enduro motorcycles and fly different airplanes. There will be several restaurants, two hotels and a shopping plaza.
A motorsport and aviation academy will offer a high-tech training center for 700 students who can enroll in a nine-year academic education program that will end with a high-school diploma. The Austrian Air Force has expressed interest in the Aviation Academy’s pilot-training program. The theme park will attract between 2 and 3 million visitors a year.
While Mateschitz thinks of his legacy, he’s unaware that he’s already turned into a living legend. He doesn’t like to talk to the press, but when he does, he often makes references to mythical transformations. “Every boy is fascinated by mythology,” he once told a reporter. “I was most fascinated by Zeus, the king of the gods. When he came down to earth to see Europa, he changed into a bull.” In his heart, Mateschitz is still the little boy who loves to change into a bull and charge around the world with boundless energy. Mateschitz is fulfilling his dreams 1.5 billion times a year, for in every 8.3 oz. can of Red Bull resides his secret ingredient: an idea that took wings.
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