Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, I have
Speaker 1: a new idea for an e t F that I
Speaker 1: think we should launch. You and about a gazillion other people,
Speaker 1: but go on. So, I think we should make a
Speaker 1: brose e t F like bro culture. I feel like
Speaker 1: his is a really is a really winning format. So
Speaker 1: I think, Um, I think the basic can you say
Speaker 1: bitch on air? I don't know, Um, the Basic Bitch
Speaker 1: portfolio you just did, so I guess, I guess. So
Speaker 1: sorry everyone, Um, this is going to be the first
Speaker 1: episode of all thoughts that comes with a disclaimer about
Speaker 1: bad language. The Basic Bitch e t F portfolio has
Speaker 1: been sort of long running theme on a finance Twitter,
Speaker 1: and that's done pretty well, at least in twenties. So
Speaker 1: things like Pinterest, um, some of the makeup companies, those
Speaker 1: sorts of things, Starbucks, So I could see I could
Speaker 1: see the flip side of that being a brose e
Speaker 1: t F. Sure, Gaming stocks gaming, so we know video
Speaker 1: games have done extremely well. I mean that's just incredible sector.
Speaker 1: Of course, Uh you know, back last summer we did
Speaker 1: that episode about Domino's Pizza, which I think, like, you know,
Speaker 1: ordering pizza while you're playing video games, then it's obviously
Speaker 1: part of it. I imagine there's some like sports element.
Speaker 1: Oh well, you could certainly put in um DraftKings and
Speaker 1: some of these online gambling um Penn Gaming, some of
Speaker 1: these online gambling names. And uh, there's also a beverage
Speaker 1: company that I think fits right into the portfolio, and
Speaker 1: it's done extraordinarily well, So I know which one you're
Speaker 1: talking about. This has become one of your favorite companies.
Speaker 1: Not just because this story around bro culture is quite
Speaker 1: interesting right now, lots of people are playing more video games,
Speaker 1: we're all stuck at home, and so maybe you want
Speaker 1: to drink more of this particular beverage while you're gaming,
Speaker 1: but also because the returns on this one have just
Speaker 1: been absolutely stunning. Yeah, exactly right. So the company is
Speaker 1: a monster beverage. You've almost certainly seen them like at
Speaker 1: any Delhi or grocery store or anything. They're known for
Speaker 1: their big cans of heavily caffeinated drinks sugary. They have
Speaker 1: like super aggressive label labels on them. It's like this
Speaker 1: sort of like very like macho frankly Browy Beverage, and
Speaker 1: the stock has done phenomenally well. But depending on exactly
Speaker 1: what settings you use, it's it might be the single
Speaker 1: best performing stock in history, or certainly over the last
Speaker 1: twenty or so years. I think it's up like five
Speaker 1: thousand percent over the last twenty years, or at one
Speaker 1: point it was like it's just donereal. Like it's like
Speaker 1: we're talking like bitcoin level returns. Actually could probably put
Speaker 1: like bitcoin into et F two, um, but we're talking
Speaker 1: like bitcoin level returns for a company that sells sugary
Speaker 1: caffeidated beverages, right. And I think when most people think
Speaker 1: about the best performing stock of the past couple of decades,
Speaker 1: they're going to think about Amazon or Google or Apple
Speaker 1: or something like that. Not many people are going to
Speaker 1: think about, you know, a consumer facing beverage company. I
Speaker 1: have to tell you something, so I don't know much
Speaker 1: about Monster. Um. I've never had one of the energy drinks,
Speaker 1: although I am very aware of the branding and you know,
Speaker 1: they're advertising strategy has been a big part of their success,
Speaker 1: and I'm sure we're going to get into that on
Speaker 1: the podcast. But I have to say, in the course
Speaker 1: of doing some research for this episode, I found the
Speaker 1: most amazing anecdote on Reddit. Of course it came from Reddit,
Speaker 1: that's what what the anecdote. So I think it was
Speaker 1: on the Financial Independence Retirement Early board, but it was
Speaker 1: some guy who said he invested nine thousand dollars in
Speaker 1: Monster Energy drinks. Um. I think this was in two
Speaker 1: thousand and ten. He posted and he said he had
Speaker 1: invested five years ago. So basically he had a five
Speaker 1: increase on that nine thousand dollar position, which made him
Speaker 1: a millionaire in the space of five years. And the
Speaker 1: best part of it was so he wrote that in
Speaker 1: two thousand ten, everyone on the message board basically said,
Speaker 1: you are absolutely crazy. I can't believe you have this
Speaker 1: huge chunk of portfolio of your portfolio in a single stock.
Speaker 1: You need to sell it right now. And of course
Speaker 1: had he held onto it, I don't know even know
Speaker 1: what it would be worth now. But like the big
Speaker 1: spike in Monster Energy came after two thousand ten, so
Speaker 1: you can only imagine what invested back in two thousand
Speaker 1: five would look like after a fifteen year monster run
Speaker 1: in Monster Energy. It's really incredible. I mean it's like
Speaker 1: one of these like charts where you just like slice
Speaker 1: it up and you're like, holy crap, these are amazing returns,
Speaker 1: and then you zoom out and it looks even more amazing.
Speaker 1: It's just, uh, it's just incredible. So I want to
Speaker 1: get the story. How did this maker of these drinks
Speaker 1: that I've actually never had one either, I don't think
Speaker 1: maybe I had one years ago, but you know, I
Speaker 1: see him everywhere? How did it become this just mammoth
Speaker 1: player um company? Did I think? Uh? For a billion
Speaker 1: in revenue last year? In two thousand and four, it
Speaker 1: was just forty nine million dollars. So the growth of
Speaker 1: the fundamentals have been incredible. We're going to be speaking
Speaker 1: with an analyst wh will explain it. Our guest today
Speaker 1: is Mark Astracan. He's an analyst at Steeple. He covers
Speaker 1: consumer goods. He's going to tell us the story of
Speaker 1: Monster and why it's returns have been so monster. So, Mark,
Speaker 1: thank you so much for joining us. Yeah, thanks for
Speaker 1: having me. Where did this company come from? It used
Speaker 1: to be like it was called something different. It was
Speaker 1: like some sort of like natural beverage maker. Originally right, yes,
Speaker 1: it was called Hands and Natural up until a few
Speaker 1: years ago. The two guys who are running at the
Speaker 1: now co CEOs bought the business as an investment or
Speaker 1: as part of an investment group in the early nineties.
Speaker 1: It was selling juice at the time Southern California. I
Speaker 1: think they were living in London at that point to
Speaker 1: South Africans looking for an investment and yeah, pulled some
Speaker 1: money together and bought the business, moved to California and
Speaker 1: started selling beverages. So how did the energy concept come about?
Speaker 1: Because I think around that time there was already a
Speaker 1: very well known energy beverage with loads of caffeine in
Speaker 1: the form of Red Bull. And I have to declare
Speaker 1: my interest here. I'm half Austrian. Red Bull comes from Austria.
Speaker 1: Lots of people don't know that, and so you know,
Speaker 1: my loyalty and the energy drink markets are already committed
Speaker 1: to red Bull. But I'm curious, like there was an
Speaker 1: incumbent with a strong brand, why did they decide to
Speaker 1: to take on that particular sector. Well, maybe just to
Speaker 1: take a step back, because I think it's it's interesting
Speaker 1: and importance. So the Austrian comment, you know, the guy
Speaker 1: who's running red Bull rebel versus a private company, So
Speaker 1: there's not a whole lot of information out there, but
Speaker 1: having studied this sector for far too long and finding
Speaker 1: it as interesting as it is. Um the guy who's
Speaker 1: running Red Bull, the CEO, actually only owns about half
Speaker 1: of the company. He was a consumer executive in the
Speaker 1: world before starting Red Bull, and he was traveling to
Speaker 1: Southeast Asia a lot and finding that he's has travels
Speaker 1: from Europe to Southeast Asia retiring and was in Thailand
Speaker 1: and found this drink called Creighton Dang, which is translated
Speaker 1: into Red Bull the days, and he decided he wanted
Speaker 1: to bring this back to Europe with him, so he
Speaker 1: actually created a joint venture with the family of the
Speaker 1: founder of this this business, and so what we know
Speaker 1: of Red Bull today actually originated as a tie beverage
Speaker 1: which is still sold in a can that looks like
Speaker 1: it did in the early eighties in a bunch of
Speaker 1: places around the world, mainly in that that part of
Speaker 1: the world China as well, but that's an aside. He
Speaker 1: brings it back to Europe and starts selling it as
Speaker 1: Red Bull in these sleek cans as the first energy drink,
Speaker 1: and so that is is kind of where the monster
Speaker 1: story begins. So Rodney and Hilton the co c e
Speaker 1: O s. We're living in London, and I saw that
Speaker 1: Red Bull was starting out in Europe around the same
Speaker 1: time that they moved there and could see that this
Speaker 1: was obviously doing really well. So I had nothing to
Speaker 1: do with buying the hands and Natural juice business, but
Speaker 1: having seen the growth of the energy category, they thought
Speaker 1: it would be a good thing to try when they
Speaker 1: were running their their beverage business in the US, So
Speaker 1: before they launched Monster, they actually had some energy drink
Speaker 1: brands under the Handsome Natural portfolio. I think it was
Speaker 1: Blue Sky Beverage. There were a few other ones, but
Speaker 1: they were launched in maybe the mid to late nineties,
Speaker 1: and the fact that you haven't heard from him suggests
Speaker 1: that they were probably a little bit too early. So
Speaker 1: they were always interested in the energy category, but it
Speaker 1: wasn't until I think two thousand and two or so
Speaker 1: that they and one of their partners, a guy named
Speaker 1: Mark Hall who now is a board member and also
Speaker 1: one of the chief innovators of the company, decided to
Speaker 1: create this this thing called Monster, this edgeyear product than
Speaker 1: than Red Bull, and the rest is sort of history.
Speaker 1: So basically, Red Bull we sort of at the time
Speaker 1: and still is it's you know, highly caffeinated, it's associated
Speaker 1: with extreme sports. I know they sponsor a lot of
Speaker 1: that stuff. Monster is basically like, we're just gonna go
Speaker 1: more extreme. Yeah, I think that's probably fair. Maybe starting
Speaker 1: with the sixteen ounces can, I think if you were
Speaker 1: to think about the energy drink consumer, I believe I
Speaker 1: think history kind of bears out, as well as sales
Speaker 1: trends that the Red Bull and Monster consumers are unique
Speaker 1: in that. Red Bull sure when after that extreme consumer,
Speaker 1: but it also early on focused on on premise so
Speaker 1: bars and restaurants, and it, as a result or maybe coincidentally,
Speaker 1: morphed into what I would consider more of a white
Speaker 1: collar beverage. And it was partly because it was sold
Speaker 1: at a premium, partly because it was a smaller can.
Speaker 1: Now you have a whole bunch of other packages for
Speaker 1: Red Bull twelve O, sixteen ounts and the like, but
Speaker 1: the original can is an eight point four ounce can,
Speaker 1: and so was small in volume and expensive in dollars
Speaker 1: or euros or whatever it was at the time. And
Speaker 1: so Monster decided they were gonna come out with the
Speaker 1: sixteen ouns to basically sell the same volume or the
Speaker 1: same value, same price for twice the volume, and they
Speaker 1: also started to market it a bit more towards blue
Speaker 1: collar workers, construction workers, the like they flavored the product
Speaker 1: I think to be a little bit more unique than
Speaker 1: Red Bull. Red Bull was never something that I think
Speaker 1: people wanted to really enjoy drinking, and the folks at
Speaker 1: Monster really focused on on palatability and something that they
Speaker 1: thought would would appeal and it especially from a very
Speaker 1: sweet standpoint of the core. Green Monster, which was the
Speaker 1: original product, really did that to a certain unique set
Speaker 1: of consumers. But then they added on that with a
Speaker 1: focus on much more of the the I don't know
Speaker 1: if he'd be a blue collar type of extreme sport,
Speaker 1: but but red Bull was focused more on on mode
Speaker 1: or sport and on well known athletes and music, and
Speaker 1: and Monster went a bit kind of next level two
Speaker 1: younger generations as well, focusing on early on like X games,
Speaker 1: but focusing on things like video games which really weren't
Speaker 1: a focus at that point for Red Bull, focusing on
Speaker 1: Moto GP, focusing on supercross, you know, things that that
Speaker 1: RedBull not wasn't necessarily focused on at the time, and
Speaker 1: probably still to a large degree really really isn't focused
Speaker 1: on and so they were able to bring in a
Speaker 1: completely different consumer. So you have you've they've done a
Speaker 1: really good job of retaining that blue collar consumer, which yeah,
Speaker 1: I think it's pretty important. You can look to see
Speaker 1: the the green can, which is still their biggest best
Speaker 1: selling product, but also that they've now skewed I think
Speaker 1: a bit younger than Red Bull as well. Maybe their
Speaker 1: core consumer is kind of late teenager to thirty Rebels
Speaker 1: consumer probably come in in mid twenties and and up,
Speaker 1: and so they've really segmented the energy drinking category. And
Speaker 1: as I said at the outset of the question, I
Speaker 1: think if you you asked the consumers, they would largely
Speaker 1: tell you they're they're a drinker of one and not
Speaker 1: the other. And so I think that has really led
Speaker 1: to the success of both businesses. And interesting, I mean,
Speaker 1: we can get into the international expansion for for Monster,
Speaker 1: which has been quite successful. But it's interesting that both
Speaker 1: businesses as best we can tell, because as I said before,
Speaker 1: Rebels private, so you don't have as much information, but
Speaker 1: they're they're both still growing it unbelievably strong rates in
Speaker 1: the case of Monster, almost twenty years after the product
Speaker 1: was created. In the case of red Bull almost thirty
Speaker 1: five years now, still growing at an amazing rate. I
Speaker 1: think that customer segmentation is really interesting because you know,
Speaker 1: as I mentioned, I have had red Bull throughout my life.
Speaker 1: One of the worst cocktails I've ever had involved um.
Speaker 1: I think it was red Bull vodka and gummy bears
Speaker 1: and it was absolutely disgusting. UM. But I haven't had
Speaker 1: a Monster energy drink of any kind. But I am
Speaker 1: aware of the advertising campaign, uh, the very distinctive can
Speaker 1: with the green claw marks. I think a lot of
Speaker 1: people have probably seen hats and T shirts and things
Speaker 1: like that over the course of their lives. But one
Speaker 1: thing I wanted to dive in, so we spoke a
Speaker 1: little bit about how the marketing was important here, the advertising,
Speaker 1: how the brand set itself apart from red Bull. Can
Speaker 1: you talk well, you started to touch upon this with
Speaker 1: the international expansion mentioned, but could you talk about the
Speaker 1: distribution network here? And um, I guess the deals that
Speaker 1: Monster struck with um first a b in bev and
Speaker 1: then Coke. Yeah, and and it's it's important from just
Speaker 1: a beverage standpoint to understand that that basically what you
Speaker 1: try to do as a brand owner is to put
Speaker 1: uself in a position to be distributed by the biggest
Speaker 1: and the best distributor over time. And so you know,
Speaker 1: success sort of breaths success in that regard, meaning that
Speaker 1: you've got to get out there and kick the tires
Speaker 1: and sell the product to retailers to distributors on a
Speaker 1: single case basis at the beginning. But as you get
Speaker 1: more success, you attract more attention, and the result is
Speaker 1: you have these networks of distributors of beverages who ultimately
Speaker 1: want to put more product on the truck. And the idea,
Speaker 1: of course, is to find the product that sells the
Speaker 1: fastest and also provides you the best profit in doing so.
Speaker 1: And so as the energy category accelerated is monster share accelerated.
Speaker 1: You started to see Monster get proposition by a lot
Speaker 1: of distributors because of the success, and you think about
Speaker 1: it too, you're taking a step back. The biggest non
Speaker 1: alcoholic beverage categories carbonated soft drinks. Energy at the time
Speaker 1: fifteen years ago was a pimple of a pimple of size,
Speaker 1: and this behemoth of carbonate of software was out there.
Speaker 1: If you look to day a fast forward fifteen years
Speaker 1: in a lot of convenience stores which accounts for about
Speaker 1: of energy drink sales. You've got a full door, maybe
Speaker 1: even two doors, depending on the store selling energy drinks.
Speaker 1: And you've seen at the same time the amount of
Speaker 1: space dedicated to carbonated soft drinks shrinking and basically giving
Speaker 1: share away to energy drinks because it's growing faster and
Speaker 1: it's allowing for more profit margins from both the distributor
Speaker 1: as well as the retailer. So it creates this opportunity
Speaker 1: for itself. And obviously it starts with the consumer wanting
Speaker 1: the product. But if you're able to have higher velocity
Speaker 1: and greater value in your your rings, it's it's a
Speaker 1: self fulfilling prophecy. So you go back to mid two
Speaker 1: thousands and Monster were starting to gain this traction. So
Speaker 1: Ant hazer Bush, not a non alcoholic company but a
Speaker 1: company that still has trucks and distributors that goes in
Speaker 1: services grocery stores and convenience stores and the like, said hey,
Speaker 1: you know we we want to put you in our trucks.
Speaker 1: And so I think the original agreement was for about
Speaker 1: half of the US. The other half of the US
Speaker 1: was a bit of a hodgepodge of distribution from a
Speaker 1: Monster standpoint, and slowly the distribution progressed, where in the
Speaker 1: early two thousand tents the distribution had evolved into about
Speaker 1: half Anheiser Bush and half Coke. Because Coke saw the
Speaker 1: opportunity there, they had been a partner in international starting
Speaker 1: in the UK. It was actually the first distribution partner
Speaker 1: that Monster had outside of the US. Monster was doing
Speaker 1: a little bit on their own, but really it started
Speaker 1: to accelerate with Coke's help in the UK, and eventually
Speaker 1: that morphed into Coke I think in two thousand and
Speaker 1: fourteen announcing it was going to take at the time,
Speaker 1: I think a fifteen or steak in Monster, which is
Speaker 1: now close because Monster has brought back a lot of stock,
Speaker 1: increasing Coke's ownership. And at the same time that agreement
Speaker 1: made Coke the global distributor of of Monster, with a
Speaker 1: couple of exceptions at certain countries. And so basically Monster
Speaker 1: kicked again has a Bush out and is now fully
Speaker 1: distributed at least domestically through Coke and as I said,
Speaker 1: through probably something like of the world. And so if
Speaker 1: you think about distributors out there of size on a
Speaker 1: global basis, ant Hazard Bush is a very good distributor
Speaker 1: globally and has a bushing a very good distributor Pepsi,
Speaker 1: very good distributor. But I think many people believe the
Speaker 1: Coke is the creme de la creme, and so Monsters
Speaker 1: really positioned itself with the best distributor, the one with
Speaker 1: the global reach to put you into every single bodega
Speaker 1: on the planet if need being. Importantly, if Monster wants
Speaker 1: to launch a new product, the Coke system can get
Speaker 1: that onto store shelves virtually the next day. How much
Speaker 1: do you know? It seems like there must be like
Speaker 1: a real chicken and egg problem for any upstart consumer
Speaker 1: food or beverage company because obviously you need these distributor
Speaker 1: relationships to get to get out there. They're not easy
Speaker 1: to get. There's limited, uh, there's limited shelf and truck space.
Speaker 1: On the other hand, you also presumably need to have
Speaker 1: a pretty big marketing efforts so that people actually buy it.
Speaker 1: But if you don't have the distribution, then you can
Speaker 1: have all the marketing and brand in the world, but
Speaker 1: no one can get it. How do they sort of
Speaker 1: navigate that simultaneous challenge of raising the brand awareness becoming
Speaker 1: an entity that people knew, while also making sure that
Speaker 1: once people became aware of the brand, they were able
Speaker 1: to find it. Yeah, it's it's it's actually interesting to
Speaker 1: Monster if you just take a look at marketing or
Speaker 1: advertising expenditure. Despite it being a marketing company, it's not
Speaker 1: even a company that manufactures its own product. It outsources
Speaker 1: on manufacturing to third parties, so it's really just a
Speaker 1: brand manager. Despite being a brand manager, it's it's marketing
Speaker 1: expenditures is actually pretty low as a percentage of sales.
Speaker 1: It's not a traditional I'm going to watch an add
Speaker 1: on TV and want to go out and buy a Monster.
Speaker 1: So what they do is is what I was saying before,
Speaker 1: You go out and sponsor athletes, events, video games, rock festivals,
Speaker 1: sporting events and the like, and that creates the lifestyle
Speaker 1: image of the brand and becomes that that self fulfilling prophecy.
Speaker 1: I mean Red Bulls kind of done the same thing.
Speaker 1: They do a little bit of TV advertising, but the
Speaker 1: bread and butter is really that you're you're sponsoring these
Speaker 1: athletes and events, and so that relies a bit more
Speaker 1: on a guerilla marketing proposition. What Monster is really good at.
Speaker 1: Originally it was just feed on the streets, sampling and
Speaker 1: kind of showing up at the right place to create
Speaker 1: the image that they wanted for the brand, and that continues,
Speaker 1: believe it or not to this day. They've evolved, as
Speaker 1: everybody has, from traditional or more traditional kind of advertising
Speaker 1: in at least in their sense of course of brick
Speaker 1: and mortar. But we're a real visible in real world
Speaker 1: advertising to now digital and social media. But they're still
Speaker 1: doing it in kind of that same way, appealing to
Speaker 1: the same consumer. And it's not going to be something
Speaker 1: that you're gonna find on a Jeopardy advertisement for examples,
Speaker 1: And I think he is probably gonna be something that
Speaker 1: continues for the foreseeable future. And so I think that's
Speaker 1: a bit different than kind of the rest of the
Speaker 1: world that I spend time analyzing, the proctors and gambles,
Speaker 1: rested laws, loreals of the world. They are doing more
Speaker 1: traditional advertising. So I'm curious. You know, you've laid out
Speaker 1: the sort of history of the company, what made it
Speaker 1: different from its major competitors, how it was doing some
Speaker 1: things rather unusually. So for instance, in marketing, it wasn't
Speaker 1: spending a ton of money buying traditional ads. Instead it
Speaker 1: was going through these sort of grassroots efforts or sponsorships.
Speaker 1: How did the streets approach Monster in its early days, Like,
Speaker 1: how are analysts actually viewing the company and its potential
Speaker 1: and how did that evolve over time? It's it's it's
Speaker 1: a good question. Frankly, I'm still not sure the the
Speaker 1: street fully understands what they're they're doing or what they've created.
Speaker 1: No no offense to the guys running the company, but
Speaker 1: but it is interesting. They don't even have an in
Speaker 1: sourced investor relations functions, So management uniquely here doesn't really
Speaker 1: even talk to investors, don't talk to analysts, don't talk
Speaker 1: to investors. They hold for earning his calls a year
Speaker 1: and allow people to ask probably on the very minimal
Speaker 1: side of questions to three four five per quarter. They
Speaker 1: do a couple of investor events a year outside of that,
Speaker 1: but but that's really it. There's no real outreach on
Speaker 1: their part. And so that's actually what to me has
Speaker 1: created such an interesting proposition from an analyst standpoint to
Speaker 1: covering it. And if you think about it, yes they're
Speaker 1: a public company, but they almost treat themselves as a
Speaker 1: private company as a result of what I just said,
Speaker 1: and you couple that with Red Bull being an actual
Speaker 1: private company and that Coke and PEPSI. Yes, they distribute
Speaker 1: energy drinks, but don't have really any of their own
Speaker 1: and have never really had any success doing that. That
Speaker 1: there's almost no information out there from an energy drink
Speaker 1: company standpoint, so you're left to really do a lot
Speaker 1: of feed on the street kind of thinking about how
Speaker 1: how these businesses work and what has driven the success,
Speaker 1: which I think is fun and it creates an opportunity
Speaker 1: to really do unique analysis. In my opinion, I think
Speaker 1: one of the things that we've done a good job
Speaker 1: of historically is that is looking at things in a
Speaker 1: way that people haven't looked at it before. I mean, ultimately,
Speaker 1: I see my job is trying to help investors make
Speaker 1: decisions and help them make money. And I think in
Speaker 1: a company like this, where they give more information and
Speaker 1: regulatory filings but not necessarily something that you have an
Speaker 1: investor relations person or kind of directing people to find
Speaker 1: that it creates an opportunity to do that. And so
Speaker 1: if you go back fifteen years ago, there there was
Speaker 1: none zilch, you know, zilch. There was just very little
Speaker 1: information whatsoever. Is also a smaller company at the time,
Speaker 1: and so it was probably something that really just felt
Speaker 1: through the cracks. If you are lucky enough to cover it,
Speaker 1: maybe it was one that you give less focus to
Speaker 1: than covering some of the bigger companies like a Copa
Speaker 1: Pepsi within your your coverage universe, and it was just
Speaker 1: there because you thought it was interesting. And so in
Speaker 1: the early days, I mean, I can remember just making
Speaker 1: phone calls to private beer distributors and asking how sales
Speaker 1: are going and what they're seeing from a category standpoint,
Speaker 1: is there any are there any other brands that are
Speaker 1: coming up Because of the time, if you go back
Speaker 1: to the mid two thousands, Coke and Pepsi were both
Speaker 1: trying to compete in this. They saw what was happening
Speaker 1: from an energy standpoint, they saw the share shift commencing,
Speaker 1: even early days at that point, and so they were
Speaker 1: all trying this and and I think the fear amongst
Speaker 1: investors was these are the behemous, the under pound guerrillas,
Speaker 1: and they're gonna come in and they're gonna they're gonna
Speaker 1: kill Monster and they're gonna hurt Red Bull. And it
Speaker 1: just never materialized like that. And as I said, you
Speaker 1: started getting bigger and bigger from a distribution standpoint. I
Speaker 1: think these these big beverage companies ultimately decided if you
Speaker 1: can't beat them, you join them, or from this case,
Speaker 1: if you can't kill them, you distribute them. And so
Speaker 1: you still make a piece of the distribution or the
Speaker 1: profit that's out there, but you can't own the brand
Speaker 1: Fulegus unless you go out and want to buy it.
Speaker 1: And it's it's it's just very fascinating from that standpoint.
Speaker 1: I mean, I think you didn't ask the question, but
Speaker 1: there is clearly this dynamic that's still at play here
Speaker 1: that Coke owns close to the company, but monsters still
Speaker 1: like public companies. If at these two companies that are
Speaker 1: public answering to their own shareholders, and so you can't
Speaker 1: be fully aligned with with one another as a result
Speaker 1: of that, And so I described it as almost a
Speaker 1: healthy tension where I think if Coke were to ultimately
Speaker 1: by this company, you would probably see some of that
Speaker 1: tension go away, and you probably actually see better execution
Speaker 1: because you have more streamlined focus from a organizational standpoint
Speaker 1: on selling Monster so coaxed on a good job, I
Speaker 1: think they could do a better job. Is that something
Speaker 1: people uh talk about? I mean, do people speculate that
Speaker 1: at some point Coke just might buy the whole thing. Yeah,
Speaker 1: there's there's a lot of speculation on that. I mean
Speaker 1: I could probably spend an hour answering that question alone.
Speaker 1: But in terms of the specifics, yeah, Coke Is has
Speaker 1: done what it's done. They've never increased their stakes since
Speaker 1: the original purchase. They, if you pay attention to current news,
Speaker 1: have some tax issues which ultimately could result in them
Speaker 1: having to write a big check, and so that probably
Speaker 1: prevents things from from happening nearer term. Their stock, which
Speaker 1: I would think they could use in a potential deal,
Speaker 1: is also down off of high Is given the whole
Speaker 1: impact to their business from from COVID, and so their
Speaker 1: their equity is a little bit depleted relative to historical levels.
Speaker 1: It probably makes it harder. But the flip side to
Speaker 1: it is the two guys who are running Monster Odney
Speaker 1: just turned seventy end of last year. Hilton is sixty seven.
Speaker 1: He'll be sixty eight the middle of this year. They're
Speaker 1: not They're not young. They've been running this company for
Speaker 1: a long time and uniquely each of them own about
Speaker 1: five of monsters. If you think about that, on a
Speaker 1: roughly fifty billion dollar company. They're worth an awful lot
Speaker 1: of money, and so they're not getting younger. They are
Speaker 1: worth a ton of money. I think they want to
Speaker 1: spend more time doing other things at some point than
Speaker 1: just running Monster. They both have grandkids, they're both enjoying
Speaker 1: spending more time with them. I think they would like
Speaker 1: to travel more, assuming that one could ever actually leave
Speaker 1: their house, and so yeah, there's this question of kind
Speaker 1: of what happens from there. In my humble opinion, I'm
Speaker 1: sure they would disagree with this, but I think the
Speaker 1: bench strength is at least lacking as far as visible
Speaker 1: facing folks to the street. And it's not obvious to
Speaker 1: me who would necessarily run and the company should they
Speaker 1: both get hit by a bus tomorrow, God forbid. In fact,
Speaker 1: I don't think there is somebody internally who would make
Speaker 1: sense to do that, and I think it's a very
Speaker 1: unique organization, and I think that creates a bit of
Speaker 1: a question mark about what happens. But but obviously it
Speaker 1: takes It's kind of like firing nuclear weapons. I guess
Speaker 1: it takes two people to turn the key or two
Speaker 1: sides to do that, and so you need to have
Speaker 1: a willing buyer as well as a willing seller. I'm
Speaker 1: not sure that they necessarily are willing sellers, but but
Speaker 1: the right offer comes along, who who isn't. But I
Speaker 1: think as as they get older, I think that becomes
Speaker 1: more more reasonable. But then the question is who who
Speaker 1: ultimately would buy them? And I think the distribution arrangement
Speaker 1: and the equity ownership would put Poke in that position.
Speaker 1: I just think at president it's probably a little harder
Speaker 1: to pull off. So what we'll see how that goes.
Speaker 1: I have long thought that there could be some others
Speaker 1: out there, kind of dark horses that aren't really talked about,
Speaker 1: that could potentially be buyers in the business. But what
Speaker 1: will ultimately see how that plays out. But for the
Speaker 1: time being, I think they're they're very happy, and they're
Speaker 1: they're obviously very successful in doing what they're doing. What
Speaker 1: we'll see what happens in time. So Joe mentioned in
Speaker 1: the intro that we did a previous episode on Domino's Pizza,
Speaker 1: which was another stock that had a stellar performance, perhaps
Speaker 1: um unexpectedly, and we also did a podcast about tobacco companies,
Speaker 1: again a similar story. You would have expected that an
Speaker 1: industry that's been under a lot of pressure over the
Speaker 1: years might have suffered, but actually they've generated pretty consistent returns.
Speaker 1: Are there any parallels between I'm trying to think how
Speaker 1: to phrase this. Are there any parallels between tobacco and
Speaker 1: energy drinks here? I mean, ultimately, you're selling a product
Speaker 1: that a lot of people would classify as unhealthy and addictive.
Speaker 1: Is the business model as simple as that? Well, I
Speaker 1: think the differences. Energy drinks don't kill people, and I
Speaker 1: think there has been a question historically about the health
Speaker 1: of of these products. If you go back, I think
Speaker 1: it's now sevent eight years ago, it had come to
Speaker 1: the attention of various political folks in Washington, who ultimately
Speaker 1: put it to the f d A too figure out
Speaker 1: whether these products were healthy. We're not and whether they
Speaker 1: should be sold. And Rodney her Monster and the then
Speaker 1: CFO at rock Star and a senior marketing executive a
Speaker 1: red Bull, We're pulled in front of I think a
Speaker 1: Senate committee to talk about the health of energy drinks,
Speaker 1: and ultimately the FDA said the amount of caffeine in
Speaker 1: this product was well within our daily limits. The other
Speaker 1: stuff that helps to make it an energy drink, things
Speaker 1: like touring or guarana gin seeing are all what would
Speaker 1: be considered generally regarded as safe meeting that they're all
Speaker 1: okay to go into the body, and there's nothing that
Speaker 1: we can say or do that should change how these
Speaker 1: things are are sold. But ultimately the energy drink companies
Speaker 1: had come to an agreement to kind of have this
Speaker 1: this go away, which is that they just put more
Speaker 1: explicit messaging on the cans to say, pregnant women shouldn't
Speaker 1: drink these, you shouldn't drink more than one a day,
Speaker 1: and here's the amount of caffeine that's in the can.
Speaker 1: And you've seen over the years, various countries that have
Speaker 1: tried to do similar things have tried to ban sales
Speaker 1: to minors. Monster also agreed not to market two kids
Speaker 1: under twelve, whatever that means, because they don't really market anyway.
Speaker 1: So I'm not sure how a twelve year old er
Speaker 1: younger could be differentiated from those that are older from that,
Speaker 1: but you know that the point is it's been vetted,
Speaker 1: It's been vetted all over the place, and it effectively
Speaker 1: still has less caffeine than a espresso at Starbucks or
Speaker 1: thinking about a frappuccino that has a lot of calories
Speaker 1: in it. It's no, it's no worse for you than
Speaker 1: kind of anything else that's out there. I mean, I'm
Speaker 1: not arguing these are good for you. I'm not arguing
Speaker 1: cargnate soft drinks are good for you. But it's it's
Speaker 1: in that same vein and it's not something, as I said,
Speaker 1: that will ultimately link to cancer, I think pretty definitively.
Speaker 1: And so it is what it is. I think it's
Speaker 1: interesting too, just stepping back. It's never been perceived is
Speaker 1: good for you, and the world seems to evolve into
Speaker 1: more helpful products. And yet while the consumer says on
Speaker 1: one hand that that's what they want to consume, whether
Speaker 1: it's eat or drink, that they want things that are
Speaker 1: cleaner label and more natural, organic and whatnot, the actions
Speaker 1: to sales, the volumes, the accelerating growth globally of energy
Speaker 1: drinks would speak otherwise. And I think ultimately, like coffee, sure,
Speaker 1: caffeine is an addictive drug to some extent, but this
Speaker 1: is something that fills it needs to eight. Consumers are sleeping, less,
Speaker 1: working more, want more focus, and this is what it offers.
Speaker 1: But but as I said, interestingly, it still has less
Speaker 1: caffeine in it than an equivalent cup of coffee. Yes,
Speaker 1: there's more caffeine in it, but I wouldn't say it's
Speaker 1: materially more. It's kind of four times the amount of
Speaker 1: caffeine is a can of coke. But what does that
Speaker 1: really do necessarily from a body standpoint, I don't think
Speaker 1: it's all that significant. So it's along when it answers
Speaker 1: saying not healthy hasn't seemed to have an impact, doesn't
Speaker 1: really harm you. It's been vetted across various regulatory bodies,
Speaker 1: and um, I think at this point, and knock on wood,
Speaker 1: but it seems like most of have generally accepted what
Speaker 1: I just said. So I want to like look into
Speaker 1: the future a little bit. I mean, you mentioned that
Speaker 1: outside of the current management, there's not an obvious replacement
Speaker 1: perhaps a reason for them to sell. Talk to us
Speaker 1: about like where has the growth been lately and what
Speaker 1: are the opportunities going forward? Like where will you know
Speaker 1: we're theoretically well the next ten years of growth come
Speaker 1: from for a company. Yeah, it's it's a good question.
Speaker 1: And I'll start by saying in the US, which is
Speaker 1: still two thirds of revenue, it's still growing at at
Speaker 1: least a high single if not a low double digit rate.
Speaker 1: So here here is a business fin around in the
Speaker 1: US now for nineteen years and still growing at that rate.
Speaker 1: And they don't really take price, so it's almost all
Speaker 1: volume that's that's driving it, just more incremental cans being consumed.
Speaker 1: The US is a bigger profit center than than the
Speaker 1: international piece. They just have higher margins here and so
Speaker 1: it probably accounts for ninety percent of global profit and
Speaker 1: it produces just massive cash flows. So you've got this
Speaker 1: business just before I answer the question on where does
Speaker 1: it go? Yeah, you know, you talked about it being
Speaker 1: a great stock. It's just the greatest business ever invented.
Speaker 1: I mean, these guys don't produce anything themselves. There's no
Speaker 1: real capital expenditures. They spend a percent of sales or
Speaker 1: less per year. There's no debt on the balance sheet,
Speaker 1: so it's just mints money a billion dollars plus in
Speaker 1: free cash flow a year that they use to basically
Speaker 1: just buy back stock. So you've got this business that's
Speaker 1: growing domestically at a call it a high single digit rate.
Speaker 1: I think can grow at that rate for at least
Speaker 1: the foreseeable future. Here and we didn't touch on it,
Speaker 1: but Ken if you want to later. I think they've
Speaker 1: done a really good job of expanding usage occasion, so
Speaker 1: you keep the core consumer and you innovate into new
Speaker 1: product categories, and that has really driven interest and incrementality
Speaker 1: of purchases, and it has contributed to the consistent growth
Speaker 1: in the US. And in the US they have around
Speaker 1: a forty share or so on a dollar basis of
Speaker 1: the energy drink category, about the same as Red Bull. Volumetrically,
Speaker 1: they're actually higher because they sell, as I said, twice
Speaker 1: the volume for the same price, So they are the
Speaker 1: leader from a volume standpoint on a market share basis
Speaker 1: in the US. If you take that and look at
Speaker 1: it globally excluding the US, our best guess, because there's
Speaker 1: really not good data, is that they're probably somewhere in
Speaker 1: the low to mid teens as a percentage of global share.
Speaker 1: Red Bullet somewhere around a fifty share. So if you
Speaker 1: think about what they've been able to do in the US,
Speaker 1: starting at zero and now being a volume share leader
Speaker 1: in the US, if they can have that kind of
Speaker 1: success outside of the US, you go from a twelve
Speaker 1: or thirteen global share to a forty share in a
Speaker 1: category that's growing at a I don't know, ten percent
Speaker 1: or more rate on a global basis. You get a
Speaker 1: business it's three or four times the size of what
Speaker 1: you have today on an outside the US basis, which
Speaker 1: today is roughly a third of the business, and you
Speaker 1: have a business that's growing in the US at a
Speaker 1: high single digit rate. You've got a really long growth
Speaker 1: rate for for the revenues of this company. To put
Speaker 1: in perspective, best we can tell, Monster will do about
Speaker 1: five billion dollars lars and revenue globally. I would guess
Speaker 1: Red Bulls probably twice that size. You're talking about a
Speaker 1: ten billion dollar company. So Monster can easily see its
Speaker 1: sales double from here over a long period of time,
Speaker 1: just based on the math that I just outline. And
Speaker 1: so it's partly just this getting more distribution, increasing brand awareness,
Speaker 1: and expanding usage occasions through innovation and the Coke system.
Speaker 1: This is where the Coke system is really coming and
Speaker 1: done a good job. I think in the US Monster
Speaker 1: didn't need Coke, but outside the US, I think Coke
Speaker 1: has really been helpful in just getting the product to
Speaker 1: market in an efficient, effective manner and really getting more
Speaker 1: product on shelf. And I think that's also an opportunity
Speaker 1: beyond just category growing. If you think about a typical
Speaker 1: seven eleven cooler in the US, you could have twelve
Speaker 1: the fifteen Monsters sitting in that cooler. If you go
Speaker 1: outside the US, on average, you're probably seeing three to
Speaker 1: five per cooler. So there's also an opportunity to just
Speaker 1: add more products, and those incremental products that have expanded
Speaker 1: the usage occasions and brought in more consumers to the
Speaker 1: Monster business, and that has been one of the big
Speaker 1: things that has driven out performance relative to Red Bull
Speaker 1: in my opinion that Red Bull has been more about
Speaker 1: just adding different packaging sizes and until more recently just
Speaker 1: not really wanting to add flavor extensions. And Monster beyond
Speaker 1: just flavor extensions, has created new sub brands. They've created juice,
Speaker 1: energy plus Juice, They've created coffee plus Energy and it
Speaker 1: sounds almost like an oxymorn, and yet they've created a
Speaker 1: multibillion dollar business globally that they're the day along with
Speaker 1: Starbucks and others are competing in and so they they've
Speaker 1: created this, I mean when they launched that in two
Speaker 1: thousand five or six, this job a Monster product. I'm
Speaker 1: sure I wrote something obnoxious at the time like, oh
Speaker 1: my god, how could you possibly be successful with doing that?
Speaker 1: And sure enough, here we are. So they've just done
Speaker 1: a really good job of kind of going to where
Speaker 1: the consumer is going to be. I think, you know,
Speaker 1: the thing that you can't over emphasize enough is that
Speaker 1: the management here, back to the beginning of what you
Speaker 1: said about what has made this so successful, they've just
Speaker 1: been the management here. Rodney, Hilton, Mark, those three guys
Speaker 1: have just been brilliant at figuring out where the puck
Speaker 1: was going and trying to figure out how to expand
Speaker 1: those used occasions for the consumer and the Red Bull
Speaker 1: maybe being a big, fat, happy private company never had
Speaker 1: to do that, and Monster was given the opportunity and
Speaker 1: clearly capitalized on it. I'm curious. We've talked a lot
Speaker 1: about the success of Monster, and you seem pretty optimistic
Speaker 1: about its future. What, in your opinion, is the biggest
Speaker 1: threat to the company. I think the biggest threat at
Speaker 1: this point the thing, I guess there's probably two things.
Speaker 1: The two biggest things we hear are one, how long
Speaker 1: can category growth continue? Because that's most important if they
Speaker 1: can retain their share or even grow their share of
Speaker 1: a category. And it's growing at that rate, I think
Speaker 1: they're they're gonna be pretty happy. The second would be,
Speaker 1: you know, and sort of related to that, what about
Speaker 1: new entrance into the category. And so if you go
Speaker 1: back twelve to eighteen months ago, there was a new
Speaker 1: entrant or relatively new enter into the category in the
Speaker 1: US called Bang, which is selling what is called performance energy,
Speaker 1: which is basically selling, if you can believe it, twice
Speaker 1: the caffeine in a same sixteen ounts can as Monster,
Speaker 1: and that was something that started to resonate with consumers.
Speaker 1: And like Monster, they moved from smaller distribution into antiser
Speaker 1: bush district distribution and they're now actually distributed by Pepsi.
Speaker 1: And so there's questions about whether the share that they
Speaker 1: were able to get to fairly quickly, which was made
Speaker 1: the high single digits, and it's it's since stopped and
Speaker 1: moved backwards. But that share they got fairly quickly, it
Speaker 1: wasn't as hard to get is maybe some people thought.
Speaker 1: And so digital social media new age marketing can allow
Speaker 1: or potentially allow new entriest to come in and reduce
Speaker 1: the barriers to entry. You see a few smaller companies
Speaker 1: like Celsius and C four also seeing very strong growth
Speaker 1: at this point off of admittedly a very small base,
Speaker 1: but you're seeing more competition in the space. So the
Speaker 1: question is how relevant can Monster be within that? And
Speaker 1: so it's just not one of these things that I
Speaker 1: think they can sit there and rest on their laurels.
Speaker 1: It's always about constant innovation and tweaking the image and
Speaker 1: the products that they're offering and to monsters credit. For example,
Speaker 1: when the world started focusing on this or the the
Speaker 1: energy can world, I suppose the subset of losers like
Speaker 1: me to focus on the beverage industry. When people started
Speaker 1: focusing on this Bang product taking share fall two thousand eighteen,
Speaker 1: Monster was able to get a product out to market
Speaker 1: within six months called Rain that allly got to a
Speaker 1: three share of the category stopped. The growth of Bang
Speaker 1: has done quite well considering it was a brand nobody
Speaker 1: ever heard of two years ago. That brand, I think
Speaker 1: at this point could be doing something on order of
Speaker 1: hundreds of millions of dollars in revenue at retails. So
Speaker 1: they've done a really good job of creating something out
Speaker 1: of nothing. So but that's the question. It's how can
Speaker 1: you continue to growth and how you can sustain the
Speaker 1: share you have. I mean, I'm curious bigger picture, I mean,
Speaker 1: beyond Monster, you cover consumer brand um overall, this question
Speaker 1: of the degree to which new new avenues for promotion
Speaker 1: social media Instagram, and new avenues for distribution the whole
Speaker 1: director consumer phenomenon. How much space for that is. We
Speaker 1: have another conversation actually the timing wise, I think it's
Speaker 1: going to come out right after this episode where we
Speaker 1: talk a little bit about that. But from your perspective,
Speaker 1: you know, you mentioned the importance of these distribution deals,
Speaker 1: the Coke network, that sort of the oligopoly of distribution,
Speaker 1: and in the US and globally, how much under threat
Speaker 1: is that from the Internet, from new stuff or how
Speaker 1: much Canada withstand um these sort of these changes. I
Speaker 1: don't want to understate the importance. But in a category
Speaker 1: like beverages, where as I said at the beginning, energy
Speaker 1: drink sales are done a convenience store, meaning is an
Speaker 1: impulse by It's going to be pretty hard to see
Speaker 1: that materialize. Monster and others are selling more online and
Speaker 1: on Amazon than they ever have, but those numbers are
Speaker 1: how would estimated probably something like two percent of sales
Speaker 1: at this point so it's it's still pretty small and
Speaker 1: the idea of shipping heavy cases of beverage, it's still
Speaker 1: not something that necessarily appeals or that I think will
Speaker 1: get traction like it could in selling sneakers or in
Speaker 1: selling pet food or something like that. So I think
Speaker 1: in this category in particular, it's probably a little bit harder.
Speaker 1: I won't say that it will be impossible, but I
Speaker 1: think that's an advantage of of where we are historically speaking,
Speaker 1: at least so far. You just you haven't seen any
Speaker 1: brands like that game traction, partly because you want to
Speaker 1: be where the consumers are and they need to see
Speaker 1: the product want to buy it. I think that's a
Speaker 1: good place to stop it. Do you have any other
Speaker 1: It's sort of like anything we missed in terms of
Speaker 1: like understanding the story and where it's going that we
Speaker 1: should think about. It's worth pointing out and making it
Speaker 1: making it important that this innovation thing is really what
Speaker 1: has driven success, and the guys that this company are
Speaker 1: are very good at understanding what consumers want. And I
Speaker 1: think they're still despite being a company that will do
Speaker 1: five billion in revenue this year, operating like a company
Speaker 1: that's going to do a couple hundred million in revenue.
Speaker 1: Like I mentioned with the rain product, I couldn't even
Speaker 1: imagine how long it would take a product like that
Speaker 1: to come to market at Coke or something equivalent to
Speaker 1: Procter and Gamble, but it would take probably two years
Speaker 1: of market research and consumer testing, and these guys were
Speaker 1: able to get it done in months. And early last year,
Speaker 1: Red Bull launched a watermelon flavor which sounds simple, but
Speaker 1: it just killed it. It did. I'm sure Tracy would
Speaker 1: love that in the country, probably very good with I've
Speaker 1: done a little bit of sprig of basil or something
Speaker 1: that sounds good joke, But now that you say, at
Speaker 1: Red Bull watermelon with a sprig of basil, well but
Speaker 1: but but if you don't want the full sugar products.
Speaker 1: So that product did really well. Monster put a product
Speaker 1: in the market on their zero calorie line in September,
Speaker 1: so within months of seeing the success, they were able
Speaker 1: to get that product the formulation correct, the taste profile right,
Speaker 1: and they were able to get it to market. I
Speaker 1: will say, if I'm able to do anything here, it's
Speaker 1: it's to at least get you to try a Monster.
Speaker 1: At this point, feel like both of you have never
Speaker 1: tried one, which what's your favorite? What's your favorite? Uh,
Speaker 1: your favorite one to try and I'll get that one.
Speaker 1: What's your favorite flavor? I think you should try one
Speaker 1: of the Ultra lines, try Ultra Sunrise, which is the
Speaker 1: orange flavor, or Ultra Paradise, which is there. I don't know,
Speaker 1: i'd call it like an apple key cucumber kind of thing, um,
Speaker 1: but it's those are probably the ones that I would
Speaker 1: try first. All Right, I'm gonna I'm looking up, I'm
Speaker 1: gonna test the what were you going to test the
Speaker 1: watermelon with vodka? Obviously? Obviously, but I was gonna say,
Speaker 1: I'm going to test the strength of Coke's distribution network
Speaker 1: and see if I can actually find a monster product
Speaker 1: in Hong Kong. That's job number one. You will definitely
Speaker 1: be able to find a Monster in Hong Kong. I'm
Speaker 1: just I'm just envisioning Tracy on a rooftop in Hong Kong.
Speaker 1: It's some you know where they apparently like they have
Speaker 1: the virus under control, drinking a out monster watermelon basil cocktail.
Speaker 1: And I'm very jealous of that. I'm very jealous of
Speaker 1: that moment right now. I don't think you're gonna find
Speaker 1: a watermelon ultra in Hong Kong, unfortunately. But Jill, they
Speaker 1: actually are expanding in China at this point, to which
Speaker 1: they're even a slightly different product offering there than they
Speaker 1: do in the rest of the world. But they have
Speaker 1: three three of their mainstream products and two non carbonated
Speaker 1: tea products there, so I'm confident you'll be able to
Speaker 1: find at least a couple of those on shelves. I'm
Speaker 1: on it before this episode comes out. I'm gonna I'm
Speaker 1: gonna get one, all right, Mark, thank you so much
Speaker 1: for joining us. I've been so curious about this company
Speaker 1: for a long time, and I feel like you you
Speaker 1: told its story extremely well, so I really appreciate you
Speaker 1: joining up. Yeah. Absolutely, thanks for having me. That was great, Mark,
Speaker 1: Thank you, thanks Mark. Yeah, Tracy, I am kind of
Speaker 1: embarrassed that I've never had one. I I think I
Speaker 1: probably have like two thousand and four, two thousand five,
Speaker 1: Like I have like some memory of like going to
Speaker 1: the bagel store on Bedford Avenue in Williamsburg, and I
Speaker 1: remember like seeing them, Like I have this vague memory
Speaker 1: of like the first time I saw them proliferate. But
Speaker 1: it's definitely been a been too long since I've had
Speaker 1: a Monster beverage, But that's kind of an interesting thing, right,
Speaker 1: So I have a feeling that even for most people
Speaker 1: who haven't actually tried Monster, they're aware of the branding. Um. Yeah,
Speaker 1: because it became such a big thing and it was
Speaker 1: so distinctive. I do think that whole conversation was obviously fascinating.
Speaker 1: The strength of management, this idea that they're able to
Speaker 1: respond to the market very very quickly, that their advertising
Speaker 1: has been different to other traditional drinks companies. The fact
Speaker 1: that they have zero debt on their balance sheet is
Speaker 1: absolutely amazing in the current environment. But one thing I
Speaker 1: found really interesting was, you know, Mark was kind of
Speaker 1: hinting at this, but it was the way the street
Speaker 1: approached the company. Um, they didn't really understand it. Monster
Speaker 1: was kind of unique in the sense that it was
Speaker 1: a public company, but it acted a bit like a
Speaker 1: private company. And I suspect also, and Mark didn't go
Speaker 1: into this directly, but I suspect that there is also
Speaker 1: a little bit of I guess like arrogance or classism
Speaker 1: towards the product, Like Monster was always the blue collar
Speaker 1: product for a less well off market. I suppose whereas
Speaker 1: Red Bull was the sort of white collar one, and
Speaker 1: I wonder how much of that fed into people's um
Speaker 1: investment decisions or analysis. The it's just no question, like
Speaker 1: if I have to in my mind's eye, and again
Speaker 1: it's it's my own biases and judgment, and but like
Speaker 1: in my mind's eye, you know, like if I have
Speaker 1: if I imagine someone drinking Red Bull, it's like some
Speaker 1: like you're a guy who's like six ft one, wearing
Speaker 1: a white shirt and a club and you know, like
Speaker 1: super fit, And if I imagined what I would have
Speaker 1: assumed as like a monster drinker, it's like someone playing
Speaker 1: video games in the US and Florida and having a
Speaker 1: headset on talking, you know, like whatever game they're playing
Speaker 1: with a baseball cap backwards and everything. Like it's just
Speaker 1: like I hadn't I hadn't, you know, in my mind,
Speaker 1: I was like, oh, yeah, they're competitors. But then as
Speaker 1: soon as you said that, it's like so clear to me,
Speaker 1: like how I've long like stereotyped the to uh the consumers.
Speaker 1: So but I guess it's kind of accut, you're going
Speaker 1: to get a lot of angry Monster fans coming after
Speaker 1: you now I know, but you are definitely uh the
Speaker 1: red Bull demotrazy. I would not like to put myself
Speaker 1: in that category. I support it because Austria has very
Speaker 1: very few things of which to be proud, and probably
Speaker 1: our most famous export is something that you wouldn't want
Speaker 1: to take credit for. So you know, we latch onto
Speaker 1: what we can and red Bull is one of them,
Speaker 1: even though, as Mark pointed out, the actual recipe came
Speaker 1: from Thailand. But I'm going to convert, or at least
Speaker 1: I'm going to try monster. I'll try to find it
Speaker 1: in Hong Kong and uh, you know, we can talk
Speaker 1: on Twitter or somewhere else about how we feel about it.
Speaker 1: Do the review sounds good? I'm looking forward to our
Speaker 1: our review and I'll take that selfie when I'm you know,
Speaker 1: on the roof deck drinking some sort of monster based
Speaker 1: cocktails to Instagram. Okay, this has been another episode of
Speaker 1: the All Thoughts podcast. I'm Tracy Alloway. You can follow
Speaker 1: me on Twitter at Tracy Alloway and I'm Joe Why
Speaker 1: Isn't All? You can follow me on Twitter at the Stalwart. Hello.
Speaker 1: Our producer Laura Carlson. She's at Laura M. Carlson. Follow
Speaker 1: the Bloomberg head of podcast Francesco Levi at Francesco Today,
Speaker 1: and check out all of our podcasts at Bloomberg onto
Speaker 1: the handle at podcasts. Thanks for listening.