Growth in FMCG is tough. The rules have long been clear to big brands that subscribe to the Byron Sharp mantra: low-frequency buyers are what fuel brand growth. However, consider the example of Red Bull, the 30-year old, Austria-headquartered, ostensible drinks brand. After 20 years in the United States – the setting for this study – the company was staring down the barrel of flat household sales.
All new revenue growth in the country has come from intensification to the tune of $11 billion, according to Laura-Lynn Freck, Senior Manager, Shopper Insights, Red Bull North America, who was speaking at the Shopper Insights and Retail Activation conference (Amsterdam, October 2018). Intensification of its existing customers is now its focus.
Red Bull is, in many ways, an odd brand. It is known by many more people than buy it. It is a pioneer of the extreme brand extension – with sports sponsorship evolving into the direct ownership of football clubs in Austria, Germany and the United States; it also runs at Formula 1 team or its and regularly delivers extreme sports feats. “We are known for our marketing,” said Freck, “but our can makes all the money.” For those that do regularly purchase, they don’t tend to think ahead and buy multi-packs to keep in the fridge. Red Bull is heavily reliant on single purchases.