Why Red Bull Isn't A Drink Company

Summary

The script narrates the remarkable journey of Red Bull from its humble Thai origins as a medicinal syrup to becoming a global energy drink giant. It details the innovative marketing strategies, including extreme sports sponsorships and record-breaking stunts, that fueled its growth. The company's unique approach to branding and storytelling, coupled with its ability to navigate controversies, has solidified Red Bull's position as a premium lifestyle product with a dominant market share.

Takeaways

• 🌟 Felix Baumgartner's record-breaking skydive from the edge of space in 2012 was sponsored by Red Bull, showcasing the brand's extreme marketing strategies.
• 🏎 Red Bull's marketing includes sponsoring various extreme sports and owning multiple sports teams, which has contributed to its global recognition.
• 💰 The global energy drink industry was worth around $90 billion by the end of 2022, with Red Bull leading the market, selling over 9.8 billion cans in 2021.
• 📚 Red Bull originated from an obscure medicinal syrup created by Chaleo Yoovidhya, who started with a small pharmaceutical business in Thailand.
• 🔑 Chaleo's insight into the needs of blue-collar workers led to the creation of an energy drink with a more appealing flavor and energy boost, which became Krating Daeng.
• 🚚 Initially, Red Bull focused on marketing to truck drivers and the working class in Thailand, using word of mouth to grow its popularity.
• 🤝 Austrian businessman Dietrich Mateschitz partnered with Chaleo to expand Red Bull internationally, investing in the brand and its potential.
• 💡 Red Bull's slogan 'Red Bull gives you wings' and its focus on a premium brand image, despite initial negative feedback, set it apart in the market.
• 🏆 The company's strategy of sponsoring extreme sports and creating its own events has been a key driver of its success, turning marketing expenses into revenue streams.
• 🎯 Red Bull's marketing approach is less about direct advertising and more about creating a brand associated with excitement and high-energy activities.
• 🚫 Despite controversies and legal challenges, including false advertising lawsuits and product bans in some countries, Red Bull has maintained its market dominance.

Q & A

What significant event involving Felix Baumgartner did millions of viewers watch on October 14th, 2012?

Millions of viewers watched Felix Baumgartner ascend to the edge of space, take a small step, and then free fall about 120,000 feet down to Earth, breaking the sound barrier and setting multiple world records.

What is one of the key strategies behind Red Bull's marketing success?

One of the key strategies behind Red Bull's marketing success is its association with extreme sports and high-adrenaline activities, which helps to sell the brand as a lifestyle choice rather than just an energy drink.

Who is Chaleo Yoovidhya and what was his initial business venture?

Chaleo Yoovidhya was the creator of Red Bull. He initially started a small business called T.C. Pharmaceutical Industries, which was designed to sell medicines such as imported antibiotics.

What was the original name of the beverage that later became known as Red Bull?

The original name of the beverage was Krating Daeng, which means 'red gaur' in Thai, symbolizing strength and power.

How did Chaleo Yoovidhya differentiate his energy drink from competitors in the market?

Chaleo differentiated his energy drink by including large amounts of sugar for a more appealing flavor and an energy boost, targeting blue-collar workers who needed energy for long physical labor.

What was the role of Dietrich Mateschitz in the global expansion of Red Bull?

Dietrich Mateschitz played a crucial role in the global expansion of Red Bull by partnering with Chaleo Yoovidhya, investing in the business, and focusing on the operational side of the company while Chaleo continued to focus on the product side.

What slogan did Red Bull adopt to represent its brand and why was it controversial?

Red Bull adopted the slogan 'Red Bull gives you wings' to represent the energy, focus, and potential the product provides. It was controversial because a lawsuit claimed that Red Bull did not provide any functional athletic improvement, which led to a $13 million settlement.

How did Red Bull's marketing approach differ from traditional beverage companies?

Red Bull's marketing approach differed by focusing on creating a brand around an experience rather than just selling a product. They invested heavily in marketing, sponsoring extreme sports, and hosting world-class events to build brand recognition and association with excitement and adventure.

What is the estimated cost of producing a can of Red Bull and its typical selling price?

The estimated cost of producing a can of Red Bull is about 9 cents, while the typical selling price is $1.79 or more, allowing for high profit margins.

What controversy did Red Bull face in 2013 regarding its slogan 'Red Bull gives you wings'?

In 2013, Red Bull faced a lawsuit for false advertising over its slogan 'Red Bull gives you wings'. The lawsuit argued that the drink did not provide any functional athletic improvement, leading to a $13 million settlement.

What is the significance of Red Bull's marketing strategy in terms of brand positioning?

Red Bull's marketing strategy is significant because it positions the brand as a premium lifestyle product rather than just an energy drink. This approach has allowed Red Bull to charge higher prices and achieve high market shares in some countries.

Outlines

00:00

🚀 The Rise of Red Bull: From Humble Beginnings to Global Phenomenon

The paragraph details the remarkable journey of Red Bull from its inception as a simple energy tonic in Thailand to becoming a global leader in the beverage industry. It highlights the visionary marketing strategies of Red Bull, such as sponsoring extreme sports and owning sports teams, which have contributed to its brand recognition and success. The story begins with Chaleo Yoovidhya, the founder, who transformed a medicinal syrup into a symbol of perseverance and energy, targeting blue-collar workers. The innovative inclusion of large amounts of sugar differentiated Red Bull from competitors, and Chaleo's grassroots marketing approach in Thailand laid the foundation for the brand's global expansion.

05:01

🌏 International Expansion and Marketing Innovations of Red Bull

This paragraph discusses the critical turning point in Red Bull's history when Dietrich Mateschitz, an Austrian businessman, discovered the energy drink during a trip to Thailand and decided to partner with Chaleo to bring the product to the international market. Despite initial negative feedback and financial losses, the founders persisted, making strategic changes to the product's formula and packaging to appeal to European tastes. The paragraph also delves into Red Bull's unconventional marketing tactics, such as engaging influential college students and leveraging the popularity of extreme sports to associate the brand with a high-energy lifestyle, which ultimately led to exponential growth in sales and brand recognition.

10:03

🏁 Red Bull's Entry into the US Market and its Lifestyle Branding

The paragraph describes Red Bull's strategic entry into the US market in 1997, facing stiff competition in a growing energy drink industry. It emphasizes the company's unique approach to branding, focusing on creating an experience rather than just selling a product. Red Bull's association with extreme sports, daredevils, and high-adrenaline activities positioned it as a lifestyle brand. The company's investment in sports teams, media companies, and world-class events, such as the record-breaking space jump by Felix Baumgartner, has been instrumental in its marketing strategy, creating a strong brand narrative that resonates with consumers and drives sales.

15:07

🛑 Controversies and the Marketing Genius Behind Red Bull's Success

This paragraph addresses the controversies surrounding Red Bull, including health concerns, legal issues, and the high-profile case involving Chaleo's grandson. Despite these challenges, Red Bull has maintained its market dominance through innovative marketing strategies that focus on brand recognition and creating memorable experiences. The paragraph also reflects on the lessons learned from Red Bull's success, such as the importance of market adaptation, premium branding, and creative marketing to evoke a feeling or image associated with the brand. It concludes by acknowledging Red Bull's transformation from a cheap energy drink for workers to a premium lifestyle product, underscoring the power of effective marketing and branding.

Keywords

💡Skydiver Felix Baumgartner

Felix Baumgartner is an Austrian skydiver and BASE jumper who gained international fame for his record-breaking jump from the edge of space on October 14th, 2012. The event was a spectacle that showcased not only his daring feat but also served as a marketing strategy for Red Bull, as his capsule and jumpsuit bore the company's branding. This event is a prime example of how Red Bull uses extreme sports and events to market its brand.

💡Sound barrier

The sound barrier refers to the point at which an object moves faster than the speed of sound, approximately 767 miles per hour (1,235 kilometers per hour) at sea level. Baumgartner broke the sound barrier during his free fall, which is a significant scientific and historical achievement. This accomplishment is tied to the video's theme of Red Bull's association with extreme and record-breaking feats.

💡Red Bull marketing strategies

Red Bull's marketing strategies are characterized by their extreme and unorthodox nature, often involving high-energy and high-risk events. The company is known for sponsoring daring sports events, such as skydiving from the edge of space, motorcycle jumps, and snowboarding down an active volcano. These strategies have helped Red Bull become a prominent brand in the energy drink market and are central to the video's narrative of the company's success.

💡Global Energy Drink industry

The Global Energy Drink industry is a multi-billion dollar market that includes a variety of beverages designed to boost energy and alertness. By the end of 2022, it was projected to be worth around $90 billion. Red Bull dominates this industry, with its sales in 2021 alone exceeding 9.8 billion cans sold across 172 countries, illustrating its significant market share and relevance to the video's theme of market disruption and success.

💡Chaleo Yoovidhya

Chaleo Yoovidhya is the founder of Red Bull. Born in rural Thailand, he started with humble beginnings and eventually created T.C. Pharmaceutical Industries. His creation of an energy tonic called Krating Daeng, which later became Red Bull, is a key part of the video's story about the company's origins and growth. Chaleo's background and journey are central to understanding Red Bull's roots and its evolution into a global brand.

💡Krating Daeng

Krating Daeng is the original name of the energy drink created by Chaleo Yoovidhya. The name, which means 'red gaur' in Thai, was chosen to symbolize strength and power. The drink was initially marketed towards blue-collar workers in Thailand and later evolved into the internationally recognized Red Bull brand. The name and its meaning are significant to the video's exploration of the brand's identity and marketing.

💡Dietrich Mateschitz

Dietrich Mateschitz is an Austrian businessman who partnered with Chaleo Yoovidhya to expand Red Bull internationally. His marketing expertise and vision were instrumental in transforming Red Bull from a local Thai energy drink to a global phenomenon. Mateschitz's role is pivotal to the video's discussion of Red Bull's branding and marketing tactics.

💡Extreme sports sponsorship

Red Bull's sponsorship of extreme sports is a key aspect of its marketing strategy. By associating the brand with daredevils and high-adrenaline activities, Red Bull has created a lifestyle brand that goes beyond being just an energy drink. The video highlights this strategy as a means of differentiating Red Bull from its competitors and building a strong brand identity.

💡Red Bull Girls

The term 'Red Bull Girls' refers to attractive women hired by the company to promote the brand by handing out free drinks on university campuses. This is an example of Red Bull's innovative and cost-effective marketing strategies, aimed at creating brand ambassadors and spreading awareness among young adults. The concept of 'Red Bull Girls' is used in the script to illustrate the company's unconventional approach to marketing.

💡Musketeers

In the context of the video, 'Musketeers' refers to Red Bull's salespeople who offered free coolers to bars to encourage the beverage's inclusion in cocktails. This tactic was part of Red Bull's grassroots marketing efforts to establish the brand in the market and create a connection between the drink and social settings. The term 'Musketeers' is used to describe a key component of Red Bull's early marketing and sales strategy.

💡Premium pricing

Premium pricing is a strategy where Red Bull charges a higher price for its product compared to other carbonated drinks, positioning itself as a premium brand. This approach, as mentioned in the script, was a risky move but proved to be crucial to the company's success. The concept of premium pricing is central to the video's discussion of Red Bull's marketing and branding strategies.

Highlights

Felix Baumgartner's record-breaking skydive from the edge of space, sponsored by Red Bull, highlights the brand's extreme marketing strategies.

Red Bull's diverse sponsorships include 10-story motorcycle jumps, snowboarding down an active volcano, and owning multiple sports teams.

By 2022, the global energy drink industry is estimated to be worth around $90 billion, with Red Bull leading the market.

Red Bull's origins trace back to an obscure medicinal syrup created by Chaleo Yoovidhya in Thailand.

Chaleo Yoovidhya's background as a duck farmer and lack of formal education did not hinder his entrepreneurial spirit.

The creation of T.C. Pharmaceutical Industries marked Chaleo's entry into the pharmaceutical business.

Chaleo's energy tonic, Krating Daeng, was designed to be affordable and cater to the needs of blue-collar workers.

Krating Daeng's unique formula included caffeine, B vitamins, taurine, and large amounts of sugar for an energy boost.

Chaleo's strategic focus on rural Thailand and sponsoring Muay Thai matches contributed to Krating Daeng's popularity.

Dietrich Mateschitz, an Austrian businessman, discovered Krating Daeng and saw potential in the energy drink market.

Dietrich and Chaleo's partnership led to the creation of Red Bull, with each investing $500,000 and sharing company ownership.

Red Bull's initial marketing strategies in Austria included grassroots campaigns and creative tactics to build brand recognition.

Despite initial financial losses, Red Bull's investment in brand building paid off with increasing sales over the years.

Red Bull's association with extreme sports and daredevil activities helped to differentiate the brand and build a lifestyle image.

Red Bull's marketing strategy focuses on creating memorable events and experiences rather than traditional product advertising.

The company's slogan 'Red Bull gives you wings' has been both iconic and controversial, leading to a $13 million lawsuit settlement.

Red Bull's success is attributed to its innovative marketing, turning a simple energy drink into a premium lifestyle product.

Controversies surrounding Red Bull, including health concerns and legal issues, have not significantly impacted the brand's global dominance.

Lessons from Red Bull's success include the importance of market adaptation, high-profit margin products, and creative marketing.

Transcripts

October 14th, 2012 — millions of viewers watch  as skydiver Felix Baumgartner ascends to the  

edge of space, takes a small step, and then  free falls about 120,000 feet down to Earth.  

During his descent, he not only broke the sound  barrier but a handful of world records as well.

However, this spectacle was not from NASA  or Space X… When you look a little closer,  

you see the unmistakable symbol of Red Bull.

Of course, this is just one of countless  examples of Red Bull’s extreme and unorthodox  

marketing strategies - they’re responsible  for 10 story motorcycle jumps, snowboarding  

down an active volcano, not to mention owning  multiple racing, football and e-sports teams.

So how did this simple energy drink,  which started out as an obscure,  

medicinal syrup, become not only  one of the biggest disruptors in  

the beverage industry but also one  of the best-marketed products ever?

By the end of 2022, the Global Energy Drink  industry will be worth around $90 billion dollars,  

and sitting on top of the caffeinated throne  is Red Bull, who in 2021 alone sold more than  

9.8 billion cans across 172 countries — more  than one can for every person on the planet!

And yet despite this, Red Bull began from  the most unlikely and humble of beginnings.

Chaleo Yoovidhya  

was born in rural Thailand, and his parents  were duck farmers who also sold fruit. They  

had very little money, and couldn’t  afford to give their children a formal  

education. Thus Chaleo grew up working  on a farm, with very little prospects.

However when his parents sent him off to  Bangkok to go and work with his brother as  

a pharmaceutical sales rep, he worked extremely  hard, and saved up enough money that in 1956,  

he was able to open his own small business  which he called T.C. Pharmaceutical Industries.  

Initially the business was designed purely to  sell medicines, such as antibiotics he imported.

However, around this time, pharmaceutical  companies in Japan had started creating  

herbal syrups labeled “energizing  tonics.” They were a big hit,  

and soon started getting  imported to Thailand as well.

After nearly ten years of running  T.C. Pharmaceutical Industries,  

Chaleo decided he wanted to create his  own version of these energy tonics.

However Chaleo saw that the current products  on the market were quite expensive and targeted  

more towards wealthier consumers. Given that he  came from poverty himself, he knew that it was  

actually the blue collar working man who needed  energy much more. Construction workers, farmers,  

people doing lots of long physical labour  which required constant attention and energy.

So after analyzing the formulas of other  drinks on the market, Chaleo created his  

own similar elixir containing caffeine, B  vitamins, and a chemical called taurine. But,  

what truly set Chaleo’s concoction apart from the  competition was the inclusion of large amounts of  

sugar, giving the syrup a more appealing  flavor, and even more of an energy boost.

He named the beverage Krating Daeng. In  Thai, Daeng means red, which, for him  

symbolized perseverance. But Krating doesn’t  technically mean bull. It actually means gaur,  

which is a relative of the water buffalo, and the  largest species of wild cattle in the world. The  

reason for the choice is that Chaleo wanted the  brand rooted in imagery of strength and power.

However, his new drink was hardly  an overnight success. At the time,  

products from countries like Japan  and South Korea dominated the market.  

But Chaleo’s decision to focus more on  provincial and rural parts of Thailand,  

unlike his competitors who focused on big  cities like Bangkok, proved to be a wise choice.

To get things started, Chaleo gave some  free samples to truck drivers who were  

working long hours and needed help staying alert,  

and pitched it as a stimulant to improve  energy and concentration. It then steadily  

grew via word of mouth and began to grow in  popularity amongst Thailand’s working class.

Using the money from initial sales,  Chaleo began sponsoring Muay Thai matches,  

which was the most popular martial art in  Thailand, and a big part of Thai culture.  

This not only helped his drink get recognition,  but created an association with high energy and  

power. This was a great strategy, because  most of the other energy drinks at the time  

were pretty generic, whereas right from the  start Chaleo focused on building a brand,  

and his drink almost became a symbol of  perseverance amongst the working class.

By 1980, his product had become  a big success all over Thailand.

However, it was an unlikely encounter with  an Austrian businessman selling toothpaste,  

that would soon make this drink a  multi-billion dollar global empire.

Whilst it was Chaleo who first created the  drink that would later become known as Red Bull,  

it was a man named Dietrich Mateschitz who  helped the business become what it is today.

Dietrich had studied World Trade at the University  of Commerce in Vienna. Although between partying,  

traveling, and chasing girls, It took  him 10 years to graduate. However he was  

always known for his wild imaginative  ideas, and after graduating had worked  

his way up to become international marketing  director of a German company called Blendax,  

who manufactured products like skin  creams, shampoo and toothpaste.

As part of his job Dietrich had to travel all over  

the world. This meant many long days  and nights of airports and flights.

On one particularly exhausting trip from Europe  to Thailand, where he was meant to be attending  

an important meeting, he felt so tired that he  went into a local store and asked if there was  

anything that could help him. It was here that he  discovered Chaleo’s energy drink, Krating Daeng.

Dietrich tried it, and in just a few minutes  he not only felt much more energized,  

he no longer had his jet lag.  He became an avid drinker of  

the product - but at the time it  was only available in Thailand.

Shortly after this, Dietrich read in a  newspaper that the highest tax payer in Japan,  

was another one of these energy drinks.  This confirmed to him just how popular  

these products were in Asia - and yet there  was nothing really like it in the west.

Now to be honest, Dietrich had been getting  kind of bored of his job at Blendax,  

and so he decided to make a very bold  move. He quit his well paying job,  

and tracked down Chaleo, saying he wanted to go  into business with him. Dietrich’s plan was to  

take Chaleo’s energy drink international  and introduce it to European consumers.

After a little persuading, the two  men went into business together,  

each putting in $500,000 dollars of their  savings. They agreed Dietrich would run the  

operational side, whilst Chaleo would  continue to focus on the product side.  

They both got 49% of the company, with  the remaining 2% going to Chaleo’s son.

Dietrich’s first big decision was that they  should form a new separate company for this  

called Red Bull, which would be simpler and more  memorable than the literal translation of Red  

Gaur. And thus, in 1984, Red Bull officially was  founded in Dietrich’s home country of Austria.

However, before launching, they did some customer  research to test how European audiences responded  

to the product… and the feedback was awful. Trial groups said the drink tasted ‘disgusting’.  

Market research suggested the drink was  too unhealthy and not appealing at all.

But the two Red Bull founders so strongly believed  in the idea, that they pushed on anyway. They made  

some important changes using the feedback though  - like carbonating the drink and switching to  

a slimmer sleek silver can which looked more  premium, and distinguished it from competitors.

Dietrich also said that in order  to feel like a premium product,  

they had to have a premium price - and so  they charged nearly double what consumers  

were used to paying for other carbonated  drinks. Pricing this high seemed like a  

very risky move, but would later prove  to be crucial to the company’s success.

They also decided on the now famous slogan “Red  Bull gives you wings” to represent a product  

that provides energy, focus, and potential.  This would later cause controversy though,  

but for now in 1987, Red Bull was  finally ready to be released in the West.

Quick question for you: do you struggle to  find unbiased financial news that’s actually  

interesting and relevant? Well, I think I have  the solution for you with today’s video sponsor,  

The Daily Upside - a free business and  investing email newsletter that over 750,000  

people subscribe to, myself included. It’s really interesting and witty, but the  

reason I like it so much is that they provide real  analysis of the most important news of the day. So  

unlike traditional media where the headlines  are filled with clickbait and fear-mongering,  

The Daily Upside gives you calm collected  insights from a team of financial professionals. 

Every weekday morning they send you one email  with a brief of the most important news,  

along with interesting stories that  are shaping the business world. 

For example, I recently read about how TikTok  is Building Out an E-Commerce Supply Chain,  

and how it could be trying to create  an all-in-one ‘everything app’. 

As someone who looks to stay on top of  the news to create videos like this,  

I can’t recommend this newsletter enough. And  it’s completely free to sign up if you use the  

link in the description below. It only takes a  few seconds to sign up, and if you don’t love  

it you can always unsubscribe. Visit the  link in the description to learn more...

On April 1, 1987, Red Bull launched in Austria -  and to create the premium feel Dietrich wanted,  

the beverage was initially offered  at trendy Austrian ski resorts.

To begin with, Red Bull had a very small team  of just a single secretary and a six-person  

sales force. And since they had an extremely small  marketing budget, Dietrich knew he couldn’t afford  

expensive TV ads or elaborate campaigns like  other drink companies. Instead, he initially  

relied on more creative lower cost marketing  strategies to spread the word about Red Bull.

Firstly, they reached out to popular,  charismatic, and influential college  

students. They would then give them cases  of Red Bull for free and have them drive  

around campus in Mini Coopers decorated with  enormous Red Bull cans on top. They also gave  

these students money to throw parties where  Red Bull was given out. The idea was that  

these popular students would shape the buying  habits of their friends and fellow students.

In fact, they even started hiring  attractive women to be “Red Bull  

Girls” and just hand out free  drinks on university campuses.

Meanwhile, Red Bull salespeople, called  “Musketeers,” offered free coolers to bars,  

inspiring bartenders to feature  the beverage in new cocktails,  

which helped Red Bull become known  as a mixer with alcoholic drinks.

Red Bull even began leaving empty  cans in bars and nightclubs,  

so that people would constantly see the logo  and be curious to try the drink themselves.

All these tactics proved successful, and Red  Bull sold over 1 million cans in the first year.

However, financially, they  actually made a loss that year,  

since they’d given away so many free  products as part of these marketing  

schemes. But Dietrich knew that investing in  their brand, especially in the early stages,  

would pay dividends later. And he was right. By  the second year, sales doubled to 2 million cans,  

and again to 4 million cans by the third year. Red  Bull spread across Europe, and at one point got so  

popular in Germany that they actually couldn’t  produce enough cans to keep up with the demand.

Of course, despite the growth, competing  in mainstream advertising like TV ads  

was still a very expensive option. But  Dietrich had always loved extreme sports,  

and realized very few big companies seemed to  be sponsoring these events, like for example  

cliff diving. Sponsoring extreme sports helped  sell red bull as more than just an energy drink;  

but a lifestyle. Red bull became associated  with daredevils and high adrenaline activities.

By 1997, Red Bull was ready for its  US debut. Although by that point,  

the energy drink market had become a $1.7 billion  business, and thus a lot more competition had  

entered the market. And unlike beverage rivals  such as Coca-Cola, Red Bull has no secret,  

patented formula. All the ingredients are  clearly labeled on the can. And initially  

Red Bull literally just offered one flavor,  which typically performed poorly in taste tests.

And yet despite this, Red Bull sales  continued to rise. In an interview,  

Dietrich was asked why he didn’t try to make a  better-tasting product. To which he replied that  

Red Bull was never about the product itself,  but building a brand around an experience.

You see at its core, Red Bull never set out to  be a beverage company. It was a story-telling  

company. The goal was to bring customers into  that evolving myth, instead of trying to cram  

a product into their lives. To achieve this,  the company has taken great efforts to attach  

itself to a growing collection of events, and  spectacles that entice customers to the brand.

Red Bull spends far more than most companies on  marketing - but instead of merely running ads  

on why you should buy the drink or sponsoring  a single event, Red Bull will purchase entire  

sports teams, construct in-house media  companies, and host world-class events.

It all began with Austrian Formula 1 legend  Gerhard Berger who became Red Bull's first  

sponsored athlete in 1989. But today,  the company sponsors over 500 athletes,  

daredevils, and adventurers, spanning  the entire field of professional and  

amateur sports — from football to Ice Hockey,  Formula 1, and even E-Sports. Interestingly,  

this has actually opened up other revenue streams  for the company - for example they make money  

from formula 1 prizes and sponsorships, giving  them yet more money to re-invest in marketing.

But this long-term approach is extremely  effective, because for example, by owning  

a team like the New York red bulls, every  time the media or fans are discussing the  

team it’s naturally bringing red bull into  the conversation and people’s subconscious.

The company even invented its own sporting  events. The Flugtag, created in 2000,  

is the German word for “flying day.”  During this event Red Bull created,  

hundreds of teams worldwide compete in  homemade flying machines to see how far  

their wild creations can fly. And if you’re  wondering, the current record stands at 258  

feet. By creating events in which its product  can be served and its brand narrative can unfold,  

Red Bull has again successfully turned expenses  into a successful revenue stream all on its own.

Outside of the world of sports, Red Bull  also sponsors art and music events such  

as Lollapalooza and Austin City Limits. And  of course, by 2012, the company was sending  

daredevils to the edge of space to jump out and  free fall at over 800 miles per hour! And despite  

taking years to plan and tens of millions  of dollars, it seems like it was worth it.  

The YouTube video of this set a world record for  most concurrent live streams, and has gone on to  

reach well over 120 million views. After right  this, the company saw global sales rise by 13%.

When Red Bull create these memorable events or  set world records, they’re often talked about  

or watched long after they happen, providing a  great steady long-term return on their investment. 

But here’s the most interesting and  unique part of Red Bull’s strategy:  

during all these events and spectacles the company  puts on, they hardly ever refer to their drink.

For example with Baumgartner's record breaking  freefall, most companies would probably have made  

sure that when he landed he was seen drinking a  can of red bull - but there was no mention of the  

drink. And that’s because Red Bull’s advertising  so often doesn’t feel like advertising.

Red Bull aim for brand recognition rather than  actively selling their product. They try to make  

something exciting for their audience to simply  associate their brand with incredible things.

And in a world where we are inundated  with ads in our face and sales pitches,  

this more subtle approach is effective.  As then it doesn’t cheapen the spectacle.  

It doesn’t feel like we’re watching  an ad, it feels more like we’re just  

watching something cool from a company  who happens to also sell energy drinks.

The truth is Red Bull isn’t really a drinks  company, it’s really a marketing company. And  

as a result they’ve been able to position  Red Bull as more of a premium lifestyle  

product - which ironically is the total opposite  of how it began in Thailand for blue collar  

workers. Red Bull started out as the cheapest  energy drink, now it’s one of the most expensive.  

The recipe hasn’t really changed, that’s just  the power of great marketing and branding.

As a result, in some countries today, Red  Bull has more than 80% market share of  

energy drinks. And since 1987, over 100  Billion cans have been sold worldwide.

However… you don’t become the number one  energy drink without a little controversy…

Red Bull has been banned in numerous countries  over the years, most famously in France. When  

a teenager died after drinking multiple  cans of Red Bull during a basketball match,  

there was understandably a lot of panic. Now,  there was no evidence actually found that red  

bull caused the death, but it still prompted  accusations that the drink’s caffeine content  

was excessive and that some of Red Bull’s other  ingredients might not be as safe as they made out. 

However, by 2008, the full version of  Red Bull was for sale in France again,  

since Red Bull successfully argued that there  wasn’t sufficient evidence that any of the  

ingredients were harmful. I mean it wasn’t exactly  healthy, but not unhealthy enough to be banned.

Then in Germany in 2009 red bull cola was  found to contain trace amounts of cocaine,  

causing some German states to pull  the drink as well. But once again,  

after further research it was found to be  such a negligible amount that you’d have to  

drink almost impossible amounts to actually feel  anything, so the drink was reinstated there too.

In 2013, Red Bull came under fire again when it  was sued for false advertising over its slogan  

‘red bull gives you wings’. Now to be fair to  red bull here, surely nobody actually expected  

to grow literal wings and fly, so this lawsuit  seemed like a frivolous cash grab. But they  

managed to argue that since red bull didn’t  give any functional athletic improvement,  

it was false advertising - and Red bull ended up  paying $13 million dollars to settle the lawsuit.

Now so far these issues all seem kinda  harsh against Red Bull. But actually the  

real controversy about Red Bull is the one  that most people in the west don’t even seem  

to know about. You see in 2012, the heir  to red bull’s fortune, Chaleo’s grandson,  

was accused of running over a policeman  and killing him while speeding in his  

Ferrari. It’s then reported he didn’t attend  court, and instead fled the country. Despite  

there being seemingly overwhelming evidence  against him, the case has not been perused,  

and in Thailand its seen as an egregious example  of how the ultra wealthy and powerful are above  

the law and can get away with anything. This  prompted headlines like: Red Bull Heir Shows How  

to Get Away With Killing a Cop in Thailand, with  some even starting a campaign to boycott Red Bull.

Now to be fair, it’s not like  the heir to Red Bull’s fortune  

is actually involved in running  the company, but it’s certainly  

a strain on the perfect image that Red  Bull spends so much money to maintain.

However, Red Bull’s original creator  Chaleo would not be around to see that,  

as he died just a few months before the incident  in March 2012, aged 88. When he passed away he  

was Thailand’s third richest person with an  estimated $5 billion dollar fortune. And in  

fact, still to this day, his co-founder Dietrich  is the richest person in Austria. That’s because  

Red Bull is still a private company; the  founders never had to sell loads of their  

equity as they had such great profit margins  and could keep reinvesting back into the  

business using the profits they made. So they  both became obscenely wealthy. And actually,  

I think there’s several lessons all of  us should be learning from Red Bull…

Firstly, Red Bull is proof that sometimes you  don’t need to invent something totally new,  

you can bring an existing product to a new market  

or audience and have massive success  by just putting your own spin on it.

Secondly, it’s clearly a very effective strategy  to find a product that’s cheap to manufacture,  

and then invest heavily in marketing to create a  more premium feel and brand image for the product,  

so you can charge higher prices.  That’ll give you high profit margins,  

giving you huge amounts of money  to invest in even more marketing,  

and thus create a virtuous cycle of growth.  For context, some sources have estimated  

Red Bull costs about 9 cents per can to  make, yet sell them for $1.79 or more.

And finally, Red Bull is a reminder that  the best marketing is not just running ads  

the exact same way everyone does, it’s actually  doing something creative and original - because  

the ultimate lesson from Red Bull is to not just  sell a product, but sell a feeling. Sell an image.

And, there is perhaps just one company that  has done an even better job of this than Red  

Bull. If you wanna learn the dark secrets  of how Coca-Cola make billions of dollars  

despite all of the controversies they’ve been  involved with, check out the disturbing history  

of Coca-Cola by clicking right here. Trust me,  it’s a crazy one. I’ll see you there. Cheers.