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RedBullRedBullDietrich Mateschitz, Founder, Red Bull

In the past 15 years,this energy-drink company has quietly captured more than70% market share inover 100 countries.Never before has anyU.S. magazine revealedthe powerful sales strategy behind

In the past 15 years,this energy-drink company has quietly captured more than70% market share inover 100 countries.Never before has anyU.S. magazine revealedthe powerful sales strategy behind

ABOVE: RUARIDH STEWART/ZUMA/CORBIS. RIGHT: ULRICH GRILL

“If we don’t create the market, it doesn’t exist,” saysDietrich Mateschitz, a former toothpaste salesmanwho built a $1.6 billion energy-drink company withcreative selling ideas that made him incredibly rich.

RedBullThe Powerful Sales StrategyBehind

Red Bull is an energy drink that doesn’t do well in tastetests. Some say it’s too sweet. Others just shake their heads,saying, “No.” Its contents are not patented, and all theingredients are listed on the outside of the slim silver can.Yet Red Bull has a 70 to 90 percent market share in over100 countries worldwide. During the past 15 years, thedrink has been copied by more than 100 competitors, butsuch companies as Coca-Cola and Anheuser-Busch havebeen unable to take market share away from Red Bull.

Says Red Bull founder Dietrich Mateschitz, “If we don’tcreate the market, it doesn’t exist.”

Mateschitz’s secret to creating a $1.6 billion world-wide stampede for Red Bull lies in a highly ingenious“buzz-marketing” strategy that herds consumers to ex-clusive and exciting events that get high media cover-age. Red Bull supports close to 500 world-class extremesports athletes that compete in spectacular and oftenrecord-breaking events across the globe. Mateschitzexplains, “We don’t bring the product to the consumer,we bring consumers to the product.”

Today Red Bull is a powerful global brand and veryfew customers know the story of the highly talent-ed, creative and determined salesman, publicity-shyDietrich Mateschitz. Tiny Austria’s only billionaire,Mateschitz located his office in the quaint lakesidevillage of Fuschl, near Salzburg, Austria. His archi-

tect is currently building a new office building in theshape of two volcanoes. His collection of 16 airplanes islocated in a steel and glass hangar, which serves as an avi-ation museum and the home of the Flying Bulls, atSalzburg Airport. He tries to keep it down to workingthree days a week. He likes to keep things simple. Thesize of his headquarter staff is only 200. Mateschitz farmsout the production and distribution of the 1.5 billion canssold worldwide. The total number of employees world-wide is only 1,800, which brings the sales volume peremployee close to a million dollars. Mateschitz not onlygenerates brilliant sales and marketing ideas, he isequally talented in the execution of the biggest and bold-est business ideas. His latest project involves a $1 billionmotor sport and aviation theme park in Styria, Austria.

The Traveling Toothpaste Salesman Mateschitz grew up in a small village in Styria. His father,whom Mateschitz didn’t meet until age 11, was held in a

POW camp long after WWII ended. Mateschitz wassurrounded by teachers, but he wasn’t a good student.When he turned 18, he went to the University of Vi-enna. It took Mateschitz 10 years to finally graduatewith a degree in World Trade. His friends said thatMateschitz liked to play, party and pursue prettywomen. After graduation he decided to get serious and

B Y G E R H A R D G S C H WA N D T N E R

become a “really good marketing man.”His natural charm helped him land a train-ing position at Unilever, and soon he waspromoting dishwashing detergents andsoap all over Europe. Colleagues describedhim as “funny, full of ambition and alwaysfilled with crazy ideas.”

Mateschitz had a natural talent for sell-ing. He was creative and had a knack forgetting things done. He soon got pro-moted to the position of marketing di-rector for a leading, international tooth-paste brand called Blendax.

After years of traveling and selling tooth-paste around the globe, Mateschitz came tothe realization that most successful man-agers live out of a suitcase, slowly turninggray and seeking comfort from a bottle orlonely women sitting in a bar. Mateschitzwanted more out of life; he expected moreof himself and soon became obsessed withthe idea of creating his own business.

Taurus Meets Taurine To many people in Austria, Mateschitzhas ambitions that know no boundaries.When he goes to a party, people on Eu-rope’s “A” list show up. When he is thehost, such international stars as NaomiCampbell or California Governor ArnoldSchwarzenegger appear. Born on May20th in the sign of Taurus, Mateschitzgoes after opportunity like a bull homingin on a matador’s red cape.

In the summer of 1982 Mateschitz reada story about the top 10 taxpayers in Japan.

He was surprised that a certain Mr. Taisho,who had introduced a high-energy drinkto Japan, made the top of the list. On thenext stop of his sales trip – in Thailand –he learned from a local toothpaste distrib-utor that energy drinks were a hot itemamong tired drivers stopping at gas sta-tions. The top brand was “Kratindaeng,”meaning water buffalo. The ingredientswere clearly written on the can. Like theoriginal Yellow Pages, there was no trade-mark or patent to protect the formula.

Besides water, sugar and caffeine (equiv-alent to that in a cup of coffee), this drinkcontains an ingredient named taurine, an

amino acid that, according to Japanesestudies, benefits the cardiovascular system.Sitting poolside with Chalerm Yoovidhya,the son of the toothpaste distributor,Mateschitz suggested that they form theirown company with the objective of intro-ducing energy drinks around the world.Each partner would contribute about a halfa million dollars in start-up capital. Soonafter the fateful meeting, the optimistic40-year-old Mateschitz quit his job andapplied for a license to sell the high-energydrink in Austria.

The Bull Fights for Survival Mateschitz recalls how his Austrianfriends reacted, saying, “They didn’t thinkit would work.” They thought that he hadmade the mistake of investing his life sav-ings in a fad that would fade. The Aus-trian bureaucracy didn’t allow the drinkto be sold without scientific tests. It tookthree years and many sales calls to get alicense to sell the product. While waitingfor the official license, Mateschitz askedhis old school friend Johannes Kastner,who ran an advertising agency in Frank-furt, Germany, to design the can and logo.Mateschitz rejected dozens of samplesbefore settling on a macho logo with twored bulls charging each other. Kastnerworked diligently on a snappy slogan, butMateschitz rejected one after the other,each time saying, “Not good enough.”

Kastner told Mateschitz to find someoneelse to come up with a better slogan, but

Mateschitz pleaded, “Sleep on it, and giveme one more tag line.” The next morningKastner called and said, “Red Bull – givesyou wings.” The slogan turned into aprophecy for the Red Bull brand, whichcontinues to soar around the globe.

Mateschitz still had to find a bottler toproduce his drink. Every bottler he calledtold him that Red Bull had no chance ofsuccess. Finally, Mateschitz found a sym-pathetic ear in Roman Rauch, the lead-ing soft-drink bottler in Austria, andsoon the shiny silver cans rolled off theproduction line. Within two years, andafter many creative promotions, sales be-

gan to grow, but so did his losses. Whilea million-dollar loss in two years mayscare an entrepreneur into closing thebusiness, Mateschitz was undaunted. Hesays, “As long as I can think clearly, I canthink of alternatives. All you need isbright eyes and a clear mind.” After hespent his life savings on the startup,Mateschitz financed everything withoutoutside capital, and by 1990 Red Bullwas in the black. He soon realized thatAustria wasn’t a big enough market, andin 1993 he expanded to neighboringHungary and then focused his energieson conquering the German market.

CLOCKWISE FROM TOP LEFT: BERNHARD SPÖTTEL; JÜRGEN SKARWAN; 502 MEDIA SUPPORT

SPECTACULAR THRILLS WITHOUT ADVERTISING BILLS: Instead of running expensive ads inmagazines, Mateschitz stages thrilling sports events where there are no spectators, yet Red Bullgets free worldwide media coverage. Red Bull has special film crews document events likeB.A.S.E. jumping into the Canal of Corinth in Greece (top left) or surfing the Amazon tidal bore for13 miles (top right). When Felix Baumgartner crossed the British Channel in a delta-wing suit(bottom) the event lasted less than seven seconds, but world media outlets covered it for days.

How Red Bull Beats the CompetitionOnce the news of Red Bull’s advancingsales spread in Europe, dozens of copy-cat competitors came on the market. RedBull’s initial move into the German mar-ket was highly successful. After threemonths of skyrocketing demand, Mate-schitz could not get enough aluminum toproduce the cans anywhere in Europe,and sales of Red Bull dropped faster thana lead Zeppelin. A competitor named Fly-ing Horse became the market leader. Ittook Red Bull four years to reclaim the topspot in the German market.

The expansion to England proved to beeven more challenging. The British mar-keting team was unable to use the term “en-ergy drink,” since a pharmaceutical com-pany owned that label. That forced Red Bullto use the term “stimulation” as a tag lineto the logo. In two short years, Red Bull’sEnglish operation was $12 million in thered, with only 2 million cans sold. Mate-schitz fired the entire staff, pulled the prod-uct from pubs, and appointed an Austrianmarketing director who concentrated onnight clubs and the student market.

In order to reach consumers withoutspending millions on advertising, Mate-schitz resorted to buzz marketing to stim-ulate sales. He hired students to driveMinis with a big Red Bull can strapped ontop. They cruised around campuses andoffered free samples at parties.

The rules for creating buzz are aston-ishingly simple. Marketers need to reachthe “alpha bees,” and if they like the prod-uct, they will tell other people about it.

The authority of one alpha bee can influ-ence the buying habits of hundreds. Thestudent marketing buzz boosted sales,and by the year 2000 Red Bull’s sales inEngland soared to 200 million cans,which came close to its total of steadilygrowing sales in Germany.

Red Bull’s Wings Clipped in France Not every European country welcomes thesales of Red Bull. Denmark and Norway re-stricted distribution of Red Bull to phar-macies. Claiming health concerns, French

authorities refused to authorize the sale ofRed Bull in stores. Although France clippedRed Bull’s wings, Mateschitz isn’t discour-aged, saying, “We are selling in 106 coun-tries worldwide; we’ll save France for last.”He refuses to give up because he knowsthat his energy drink is not a health hazard.

Mateschitz thrives on resistance. Al-ways eager to push the envelope, he’shatched spectacular new marketing ideasthat get consumers to flock to eventswhere extreme sports athletes performstunning acts that leave audiences gasp-

ing for air. Events include street luge (in-cluding jumps of 94 feet), air acrobatics,surfing a 25-foot tidal bore for 34 minuteson the Amazon River, rail-sliding, moun-tain bike free-ride competitions, mo-tocross freestyle rallies and many more.

Mateschitz supports close to 500 dare-devil, world-class athletes who come to in-vitation-only events from all corners ofthe world. While such countries as Franceput up boundaries to keep Red Bull out,Mateschitz knows no boundaries, and hesees no contradiction when he invites

CLOCKWISE FROM TOP LEFT: ULRICH GRILL; ALBERTO RODRIGUEZ; HANNES KUTZLER

French athletes to compete in his events.Case in point, last year, the 24-year oldFrenchman Cedric Gracia won the 2003Red Bull Rampage (a world-class, extrememountain bike competition) in Utah.

Last year Mateschitz sent a message tothe French market and the world that thewings of Red Bull are alive and well. Hesponsored an extraordinary stunt per-formed by the Austrian air acrobat FelixBaumgartner, who became the first manto fly the English Channel (22 miles)from Dover, England to Calais, France

with a special 6-foot delta-wing made ofcarbon fiber strapped to his back. Baum-gartner wore a special suit to insulate himagainst the freezing temperatures (minus55 degrees Fahrenheit) when he jumpedout of the airplane at 33,000 feet. He usedoxygen for the first few minutes while heflew at a speed of more than 220 milesper hour. After less than seven minutes,Baumgartner pulled his parachute andlanded safely in France. TV footage ofBaumgartner’s world record event andthe Red Bull logo were seen by more than200 million people around the world.

Today, special Red Bull events takeplace in Australia, Asia, Africa, NorthAmerica, South America, Russia and allover Europe. The pre-event parties in-clude professional DJs, appetizers, pho-togenic women and plenty of Red Bull.Some events, like Red Bull’s Flugtag,draw crowds of 50,000 people or more.

There are always Red Bull signs in fullcamera view, an obligatory post-eventparty and, of course, extensive mediacoverage, including network TV andfollow-up publicity on www.redbull.com,a spectacular global Website.

Red Bull Turns Red Hot in the USA With an indomitable spirit for turningsetbacks into comebacks, Mateschitz sethis sights on the U.S. and started to test-market Red Bull in California. In April1997 he started to compete against the ag-

ing soft drink lion Coca-Cola. The slim 8.3oz. can of Red Bull contains less than halfthe amount of liquid as a bottle of Coke,but it packs far more caffeine (80 mg),which gives it the advantage of greater ef-ficiency. In the first year, Red Bull soldmore than 5 million cans in California.

Red Bull replicated the buzz strategy thatworked so well in Europe. Volkswagen Bee-tles with huge Red Bull cans strapped totheir backs showed up at the beach, at col-leges, gyms, office buildings or construc-tion sites with free samples where peoplemight need a boost. Congenial Red Bullsalespeople (called “Musketeers”) offeredfree coolers to bars, and soon bartenderslearned that this new drink was a moneymachine. Red Bull mixed with vodka orJager became one of the hottest drinksacross the nation. Bars in LA charged $10,in New York $12 and in Miami $16. SoonRed Bull was flowing across America.

The U.S. marketing buzz and bull ma-chine spun tales that were picked up by thepress. Red Bull’s slogan “gives you wings”led newspaper reporters to print quotesfrom consumers like “You can get drunkand stay wide awake,”or “It’s the poorman’s cocaine.” One rumor even claimedthat the drink contains bull testicles.

Mateschitz enjoys the free publicity,but he is singleminded when it comes toframing the real purpose behind his en-ergy drink, saying, “The motivation tohave a Red Bull at night is the same asduring the day, to wake up, be at yourbest, and have fun.”

As in Europe, news stories of Red Bull’ssales success spawned competition andmany Red Bull imitation products wereintroduced to the U.S. market. SoBe’sAdrenaline Rush occupies second placewith 12 percent market share. Anheuser-Busch has a drink called 180, Coca-Colamarkets KMX and Pepsi sells AMP. Allcome in slim cans but none come withthe energetic and emotional brand imagethat marketing master Mateschitz created.

There are also smaller competitors likePink, Vegas, Go Fast or Rockstar, withsmall sales teams calling on bar ownersand trying their best sales pitches againstRed Bull’s marketing power. Four former

RED BULL WINGS ATTRACT WORLD CLASS FAME: To househis collection of vintage planes (far left), Mateschitz built Hangar-7,a spectacular air museum. Naomi Campbell (left) was one of the2,000 VIPs who paid $600 to walk on the red carpet, flirt withthe press and enjoy a fabulous reception and air show (below).

Red Bull North America executives be-lieve that they can compete against theirformer employer with a new drinknamed Roaring Lion. The sales pitch ontheir Website (July 04) tries to persuadebar owners by saying, “At $1.33 per can,the market-leading energy drink is yourmost expensive nonalcoholic mixer…Roaring Lion saves you 80 cents per 8.3ounces. On a current usage of 50 casesper month of energy drink, you canexpect to save $990 per month.” A bev-erage industry executive laughed at thethreat, saying, “Red Bull’s sales keep onsoaring; Roaring Lion is still snoring.”

According to the Beverage MarketingCorporation, in 2003 Red Bull held a 67percent market share of the U.S. energy-drink market with more than 500 millioncans sold. Mateschitz believes that the po-tential could be “over a billion cans a year.”

Red Bull Catches Air A few years before he launched Red Bull,Mateschitz developed a passion for flying.Once his company turned substantialprofits, he funneled the excess cash intoa superb collection of vintage aircraft. In2000 he created a Red Bull subsidiary,named it Flying Bulls and purchased andrestored such planes as two Corsair fight-er-bombers, a twin-engine DC-6 that be-longed to former Yugoslav Communistruler Tito, a T-28-B trainer, four seaplanes,and a Bell 47 helicopter – 16 planes in allto date. To create a suitable home for hisgrowing fleet of Flying Bulls, Mateschitzworked with an architect to create a60,000-square-foot airplane hangar. Notjust a simple utilitarian box to store air-craft, mind you, but a superb wing-shapedglass and steel air museum that not onlydisplays each plane with an impressiveRed Bull logo, but also has a lounge anda first-rate restaurant that rotates famouschefs from around the world. Thebuilders used 1,200 tons of steel and1,754 different-size panels of special glass.

To transcend the boundaries of avia-tion, Mateschitz added an art collectionto the air museum that he brandedHangar-7. Recent exhibits included thephotographic collection of the Wrightbrothers and sculptures and paintings byJos Pirkner who designed the Taurus tro-

phy for the winner of the annu-al World Stunt Awards.

At night the access road toHangar-7 lights up like a run-way to signal the visitor thatthis is a special place that giveswings to your imagination. Afterdinner, visitors can enjoy a drinkat the bar called 360 which is locatedunder the domed ceiling of the hangarand is accessible through a ramp thatleads from the restaurant to the bar.What makes the bar the hottest placein Salzburg is the glass floor that allowspatrons below to look at the soles of thefeet of the bar guests 30 feet above. Thebar is open every night until 3 a.m.

Occupants of the bar have a spectac-ular view of the aviation museum be-low. Special lights embedded in themuseum floor light up at night and

give the visitor the impression of lookingat the stars in the sky while they see thedark shadows of the aircraft below. A stick-ler for detail, Mateschitz decided that thestar constellation must replicate the nightsky of the day of the opening of Hangar-7. At the opening party of Hangar-7 lastyear, more than 2,000 VIPs paid $600each to walk on a 100-foot red carpet, flirtwith the press, tour the hangar, enjoy a

fabulous reception and wit-ness a spectacular air showthat contained 15 differentaerial scenes that followedthemes from Greek myth-

ology. For example, Zeustransformed from a bull into

a fighter plane, and four violin-ists played a concert in four separate

Blackhawk helicopters.Every Red Bull vintage plane in

Hangar-7 is meticulously main-tained and in top flying condition. Infact, every plane housed in thehangar has a full tank and is ready toroll out to the Salzburg airport run-way and take off. On weekends,Mateschitz likes to take one of hisplanes out for a spin, flying over thebeautiful meadows of the Salzburg

lake region and enjoying the land-

scape below. The Taurus AwardsFive years ago, Mateschitz called ArnoldSchwarzenegger with his “big idea” – tocreate an annual award for the world’sbest stuntmen and stuntwomen. Arnolddidn’t buy the idea, saying, “We alreadyhave too many awards in Hollywood.” ButTaurus Mateschitz displays an uncom-mon tenacity when it comes to turning

GETTY IMAGES

RED BULL’S WINGS IN HOLLYWOOD: Mateschitz sold Hollywood on the idea of the annualWorld Stunt Awards which attracts stars like Sylvester Stallone (below) and ArnoldSchwarzenegger (right). Every year, the award show grows bigger and receives greater publicity.Note the subtle visual analogy between the statue’s wings and Red Bull’s slogan “Gives you wings.”

ideas into reality. Like a bull, he lockshorns with adversity and never gives up.

Mateschitz went back to the drawingboard and began to recast his unique sell-ing proposition. He began thinking aboutthe needs of the actors who risk their livesperforming dangerous stunts and estab-lished the Taurus World Stunt AwardsFoundation, seeding it with a personalcheck. He also mandated that the pro-ceeds from the awards show and relatedfundraising activities would help perpet-uate the grant fund dedicated to the sup-port of stunt performers in need. Stuntperformers can apply for a financial grantin the event of any disability. Mateschitzcommissioned artist Jos Pirkner to createThe Taurus, an impressive 31-inch bronzestatue that weighs more than 26 pounds.On May 20, 2001 (Mateschitz’s birthday),the first Taurus World Stunt Award showwas held in LA.

As a politically correct gesture to hisAustrian buddy, Mateschitz handedSchwarzenegger his own Honorary Tau-rus Award. Few people in the audiencehad a clue what a gigantic sales effortenabled the show, which has grown big-ger with every year. Even fewer peoplewatching the star-studded award show

on national television noticed the cleverand subtle visual connection betweenthe huge wings of the Taurus statue andthe catchy Red Bull slogan “gives youwings.” It was Mateschitz, the sublimi-nal image maker, who pulled the great-est Hollywood stunt.

The Billion-Dollar Theme Park In May of 2004 Mateschitz celebrated his60th birthday. At an age where the averageAustrian ponders retirement, the Red Bullfounder, whose net worth according toForbes magazine is more than $1.4 billion,announced even bigger plans that dwarfeverything he’s done before. Mateschitzhas hired a team of 40 people to work onhis idea of a motorsport and aviationtheme park, with a price tag of $1 billion.

Including four open-air arenas, capableof holding between 6,000 and 100,000spectators, the park will be completed inthree years. One of the race tracks will bereserved for Formula 1 races. Visitors willbe able to race cars and go-carts, ride En-duro motorcycles and fly different air-planes. There will be several restaurants,two hotels and a shopping plaza.

A motorsport and aviation academywill offer a high-tech training center for

700 students who can enroll in a nine-year academic education program thatwill end with a high-school diploma. TheAustrian Air Force has expressed interestin the Aviation Academy’s pilot-trainingprogram. The theme park will attract be-tween 2 and 3 million visitors a year.

While Mateschitz thinks of his legacy,he’s unaware that he’s already turned intoa living legend. He doesn’t like to talk tothe press, but when he does he oftenmakes references to mythical transfor-mations. “Every boy is fascinated bymythology,” he once told a reporter. “I wasmost fascinated by Zeus, the king of thegods. When he came down to earth to seeEuropa, he changed into a bull.” In hisheart, Mateschitz is still the little boy wholoves to change into a bull and chargearound the world with boundless energy.Mateschitz is fulfilling his dreams 1.5 bil-lion times a year, for in every 8.3 oz. can ofRed Bull resides his secret ingredient: anidea that took wings. •

POSTED WITH PERMISSION FROM SEPTEMBER 2004 SELLING POWERMAGAZINE. COPYRIGHT 2004

GETTY IMAGES

Villeneuve, Switzerland: “Red Bull Vertigo” hang gliding and paragliding aerobatic competition

Virgin, Utah: “Red Bull Rampage” mountain bikefreeride competition

Austin, Texas: Flugtag

Lienz, Austria: “The Dolomite Man” competition

Caesarea, Israel: “Street Dogs” street skateboarding

Madrid, Spain: “X Fighters” motocross freestyle

CLOCKWISE FROM TOP LEFT: RAFFAELLO BASTIANI; STEFAN AUFSCHNAITER; CHRISTIAN PONDELLA;

Extreme SportsRed Bull competitions that inspire athletes worldwide to extraordinary achievementsFor more, visit www.sellingpower.com/redbull.

San Francisco, California: “Streets of San Francisco” street luge

Rio de Janeiro, Brazil: B.A.S.E. jumping

Switzerland: Ice climbing and cave ice climbing

Cape Town, South Africa: “Big Wave Africa”

Western Australia: Red Bull “Cliff Search” cliff diving

Monaco: World recordattempt, freediving

502 MEDIA SUPPORT; LAETITIA FROLLA; LORENZ ANDREA FISCHER; MARK WATSON; CHRISTIAN PONDELLA; GRANT ELLIS; GEOFF WAUGH (RAMPAGE); RONEN TOPELBERG (STREET DOGS); DENIS BALIBOUSE