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Mon October 15, 2012
Red Bull's Brand As Powerful As Its Beverage
Originally published on Mon October 15, 2012 10:10 pm
MELISSA BLOCK, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
Yesterday millions of people watched a man free fall from 24 miles above earth, breaking the sound barrier, and then watched as Felix Baumgartner glided down into the New Mexico desert.
UNIDENTIFIED MAN #1: Here he's coming. And there you can see by the approaching shadow, he's just about there. (Unintelligible) the world record holder.
BLOCK: Unmistakable on Baumgartner's helmet, his pressurized suit and his parachute, the Red Bull name and logo. This was the Red Bull stratos-mission, seven years in the making and just the latest splashiest venture for the energy drink company that's taken branding and sponsorship of extreme sports to bold new levels.
Duff McDonald profiled the company and its founder for Bloomberg Business Week and he joins me now. Duff, welcome to the program.
DUFF MCDONALD: Thanks for having me.
BLOCK: We're going to get to the extreme sports component in a moment. But first, let's talk about the origins of the Red Bull Company itself. It was founded by an Austrian named Dietrich Mateschitz. He started it in his home country 25 years ago. How does a guy who was a toothpaste salesman for a German country become this titan running this huge energy drink company?
MCDONALD: Well, the simple origin of it was that he was on the road selling that toothpaste in Thailand and someone gave him one of those Asian syrups that you'd see in a lot of delis for energy. And he said it worked, tracked down the guy who made it in Thailand and said, let's sell this stuff in the West, but we're going to do it with a twist. We're going to carbonated and then we're going to get Westerners to buy it.
He's a branding guy at the core and you can tell that from the whole trajectory of Red Bull. You know, yesterday's jump is just a 25-year culmination of a brand image that is in its success is unrivaled in recent memory. It's not one of the world's great brands.
BLOCK: That trajectory that you talked about is pretty outstanding, 4.6 billion cans of Red Bull sold worldwide in 2011. You actually met Mr. Mateschitz at his headquarters in Austria. He doesn't give a lot of interviews, but he did talk to you. What did he say about how that success came about?
MCDONALD: He insists that this is a drink that, quote, "improves performance," whatever that actually means. And in making that insistence, he put a premium price on it. A Red Bull is about two bucks a can, you know, which is four or five times what you pay for a Coca Cola in a grocery store. And I asked him, I said, what gave you the brass to put a premium price on it out of the gate?
And he looked back at me all deadpan and he said, how would people know it was a premium product if it didn't have a premium price? You know, from the very beginning, they associated with extreme sports, which I think was an under-exploited part of the athletic and sort of visual television universe and sort of latched on to a whole philosophy of, you know, mind the pun here, it is Red Bull, but take a bull by the horns.
And it's been that way for 25 years. And the kinds of events and spectacles they put on have just increased in their extravagance.
BLOCK: This is a company that is not without controversy, right? You wrote in your profile about incidents where there were deaths that people thought might have been associated with consuming Red Bull along with alcohol. How did the company handle that?
MCDONALD: You know, it's interesting, someone dancing at a rave all night and having, you know, five Red Bull and vodkas and passing out from dehydration, you know, whose fault is it? It's certainly not Red Bull's. You know, if they had vodka tonics, are you going to go sue Schweppes for selling the tonic? I asked him about that and he said, none of this has to do with us.
And on the other hand, though, we didn't go out and seek to quash the controversy because as a brand guy he said despite the tragedy - and he did not make light of that at all, it was just more of the same. It was, what is this drink that everyone is talking about?
BLOCK: Must be the any publicity is good publicity theory?
MCDONALD: Yeah, exactly.
BLOCK: You know, this company has managed to be extremely successful marketing a product that - I say this on a basis of one test case today as I prepared for this interview - is pretty awful. I say that with pure journalistic integrity. But a product that has some taste challenges, let's say, to be polite. How does this happen?
MCDONALD: First of all, let me just say it's an acquired taste. I love my diet Red Bull.
BLOCK: You do?
MCDONALD: Oh, I also love Listerine, though. And, you know, I think they're not unrelated. I did ask him that when I met him. I said, you could've made it taste better. And he just looked at me sort of with a queer-less look and he's like, Duff, it's not about the taste, which is hilarious for someone who's selling something that you open up a can and put in your mouth, but...
BLOCK: A little counterintuitive.
MCDONALD: Yeah, it' counterintuitive, but it was consistent with this idea that what we're doing here is improving your performance. And if that's your goal, what should it matter to you what it tastes like.
BLOCK: That's Duff McDonald. His profile on Dietrich Mateschitz in Bloomberg Business Week last year is titled, "Red Bull's Billionaire Maniac." Duff McDonald, thanks so much.
MCDONALD: Thanks for having me. Transcript provided by NPR, Copyright National Public Radio.