It's a (Red) Bull Market After All

Running of the Bull: How the Brand Got Hot

Red Bull sets its grassroots ethic into motion with a simple, yet masterful marketing force: student brand managers. In Europe, collegiate buzz junkies have been successfully addicting friends and classmates for years thanks to a foolproof branding plan: Red Bull provides the student representatives with free cases of its energy drink and then encourages the kids to throw a party. (Needless to say, it didn't take long for coeds to discover the benefits of Red Bull and vodka, now a staple at hip bars around the globe.)

Hardly a new marketing device, these brand evangelists spread the good word about Red Bull quickly and cheaply. Above all, Gobé says, the student advocates offer credibility to a product that is competing in an increasingly crowded beverage market -- a market that became even more competitive in August when PepsiCo was given the FTC's okay for its plan to purchase Quaker Oats and take control of the Gatorade brand.

"Generation Y no longer responds to commercial messages from big-business America," Gobé says. "Cool college students have become Red Bull's best ambassadors because they carry the most credibility with cynical consumers. It's almost as if brands have to be elected to be part of the culture now."

Red Bull's second grassroots branding strategy involves "consumer educators" -- folks who drive around in shiny silver off-roaders with giant, phallic cans of Red Bull strapped to the back. Their mission: to find people who need energy and give 'em a free can of Red Bull. Sounds too corny and pedestrian to actually work, right?!

Wrong. This ploy, as old as Heinz and Tupperware, is introducing Red Bull to the masses -- building an image for next to nothing. On the other hand, the free sporting events that Red Bull organizes do not aim to influence the public at all. Many of Red Bull's extreme events -- cliff diving in Hawaii and skateboarding in San Francisco -- are for athletes only, designed "to support a community of athletes and to bring credibility to the sports they compete in," says Emmy Cortes, director of communications for Red Bull.

Can It: Packaging Becomes Paramount

It's all in the can. Gobé says that the sleek, silver can is Red Bull's "anti-Pepsi statement." He calls it slim, sexy, and powerful, and says that its diminutive size only bolsters Red Bull's reputation as a concentrated experience.

"Packaging is critical," Koehn agrees. "Red Bull really looks like a product from a global economy. It doesn't look like a traditional American soft drink -- it's not in a 12-ounce can, it's not sold in a bottle, and it doesn't have script lettering like Pepsi or Coke. It looks European. That matters."

The most remarkable thing about Red Bull's 8.3-ounce can is not its size or sex appeal but the fact that it's the company's only offering. One size. One color. One sticky, sweet taste. That's all, folks. At a time when Starbucks is hawking ice cream, bottled Frappuccino, and airplane coffee, it's shocking to hear of a successful company not exploring brand extensions left and right. "We are one of few companies around the world that can stay focused on one product," Cortes says in defense of Red Bull's narrow strategy. "We do what we do best."

A private company with a hands-off founder, Red Bull doesn't feel financial pressure from investors and board members. It can take its time with the brand, and Koehn says that it should. "Red Bull is establishing itself as a very powerful mover in a relatively new and evolving category," she says. "To do that, they are trying to get their knitting exactly right before they start weaving."

But if Red Bull continues to amass consumers and increase its profits every year, Koehn predicts that the company will introduce related products "carefully, tightly linked to Red Bull's core offering." In the meantime, Red Bull is simply working to keep tabs on all the rumors circulating about its beverage. Some reports claim that Red Bull is unsafe for minors. Others link the drink to the deaths of various teenagers around the world. France has banned the sale of Red Bull altogether.

Consumers don't appear concerned. In clubs and dorm rooms everywhere, Red Bull remains a popular drink among popular kids. Gobé says that the rumors only contribute to the brand's mystique. "Red Bull is not about safety," he says. "The brand's emotion is over the edge; it's pushing the envelope. Danger is part of the deal. If you can survive Red Bull, you are cool."

The question, however, is not whether consumers can survive Red Bull but whether the major soda manufacturers can. Regardless of whether the Austrian beverage disappears in five years or steals the market out from under Gatorade, Red Bull has tapped into an authentic branding strategy that will redefine product marketing in the next decade -- again.

"The game of marketing sports drinks is going to be the game of connecting with people in certain kinds of contexts," Koehn says. "Pepsi's not going to be able to market Gatorade strictly with slick print campaigns and good television. Pepsi and Coca-Cola could learn a lot from Red Bull."

Anni Layne Rodgers (arodgers@fastcompany.com) is the Fast Company senior Web editor. Learn more about Red Bull on the Web.