Dietrich Mateschitz, the press-shy CEO behind Red Bull
It was one of the most iconic images of 2012; a man in a spacesuit, looking over the Earth from 39km, ready to jump. Though the star of the jump was professional daredevil Felix Baumgartner, the real winner was Red Bull, the jump’s sponsor. Over the past decade, Red Bull has strived to become the number one brand behind extreme sports. It might seem counterintuitive at first, that a party drink brand would want to sponsor sporting events, but it is all part of Dietrich Mateschitz’s grand plan.
Mateschitz founded the company in 1982, after a trip to Asia introduced him to the type of high-sugar, high-caffeine energy drink popular with the locals. He was particularly interested in Krating Daeng, a Thai tonic popular with truck drivers and labourers. Initially when he commissioned a consumer review, the surveyors concluded that a high-energy tonic like Krating Daeng (literally ‘red bull’ in Thai) would not find a market in Europe. But the Austrian still saw an opportunity.
Test flight
Before stumbling upon Krating Daeng in 1982, Mateschitz was already an established marketing director in Europe. He had served in the marketing divisions of Unilever and Procter & Gamble, working on detergent and toothpaste accounts. It was this early marketing experience that laid the foundations for his remarkable work with Red Bull. Mateschitz didn’t only spot a gap in the market for his brand; he created a market for energy drinks that never existed before. “People didn’t believe the taste, the logo, the brand name,” he told Forbes in a rare interview. “I’d never before experienced such a disaster.”
From the basic product Mateschitz built a universe around Red Bull, and everything from corporate culture to communications reflects that ethos
He persevered though, and launched Red Bull with Chaleo Yoovidhya, the creator of the original Krating Daeng, in Austria in 1987. Though the drink was a moderate success and the business expanded to Hungary and Slovenia in 1989, the drink didn’t get the go ahead to launch in France, Denmark and Norway for a number of years. There were several health concerns associated with the consumption of Red Bull, because of the high amounts of caffeine and taurine in the drink. But Mateschitz acted quickly; the brand was built around stamina, in order to counter the negative health claims. He then linked the brand to the mental and physical resilience of extreme sport. “When launching a product called an energy drink and named Red Bull, a product that stimulates body and mind, it is a short step to the roots where Red Bull came from,” he told Co.Create. Soon the drink overcame the licensing and health concerns and is now distributed in over 165 countries worldwide.
Adrenaline-fuelled advertising
This success did not come accidentally, or even naturally. Mateschitz spent the better part of three years working exclusively on Red Bull’s image, its grassroots marketing and its potential customer base before even testing the product in his native Austria. Unlike many products in its category, Red Bull was never only a drink. It was always a lifestyle brand. That is a vital part of Mateschitz’s vision. Though the company is ostensibly a soft drink manufacturer, in terms of branding, it is much more than that. From the basic product Mateschitz built a universe around Red Bull and everything from the corporate culture to communications reflects that ethos.
After years in marketing, Mateschitz had found his calling. He told Co.Create that the drink’s unique appeal makes it easier to sell. “We were producing content from the start but one has to admit that this was easier with Red Bull energy drink than it is with ordinary food products, soft drinks, or detergents.”
The main conduit in the development of the brand has been the ‘gives you wings’ tagline and series of campaigns. “It is an invitation as well as a request to be active, performance-oriented, alert, and to take challenges,” Mateschitz has said. “When you work or study, do your very best. When you do sports, go for your limits. When you have fun or just relax, be aware of it and appreciate it.” The accompanying ad campaign, a series of humorous cartoons that culminate in characters drinking a can of Red Bull and then flying off, launched the brand around the world, and the tagline is still an important part of the campaigns today. Mateschitz concedes that Red Bull is both a beverage and a media company today, as two sides of what he calls “the world of Red Bull”.
But before ad campaigns and big budget sponsorship deals, Mateschitz launched his brand by turning his back on mass-market advertising. He launched the energy drink as a ‘cult’ drink by persuading students to throw Red Bull parties in unusual locations and paid them to drive to university with giant cans of the stuff tied to the top of their Minis and Beetles. Then came the whimsical cartoons, and eventually the radical sports sponsorships. At every step of the way, Mateschitz was telling Red Bull drinkers that they were not ordinary, or mass market, but opening their minds and challenging their bodies. All the while the company was becoming a major player in the soft drink industry. Mateschitz told The Economist in 2002 that it was all part of the plan: “We don’t bring the people to the product. We make it available and those who love our style come to us.”
More than shameless promotion
Mateschitz now spends the bulk of his time developing his brand. Unlike other companies that sponsor sporting events, today Red Bull actually owns a variety of enterprises, mostly in sport that have no obvious connection to it’s flagship energy drink product. Mateschitz has admitted to spending up to two days a week coming up with new and unusual ways to promote the brand.
Red Bull is not only the biggest selling energy drink in the world, it is also a sporting brand associated with teams in Austria, Germany, the US and Brazil. The energy drink also sponsors a number of extreme sports events globally each ear, notably the Red Bull Air Race event, in which pilots navigate challenging obstacle courses in the sky. In keeping with its ‘gives you wings’ motto, the company has also launched the Red Bull Flugtag, in which competitors are invited to create their own homemade, human-powered flying machines that are then propelled off a pier onto the sea or a lake. The Flugtag has been one of Red Bull’s most successful events to date, and has spawned 40 international offshoots.
It might not come as much of a surprise that Mateschitz himself is a keen pilot, sportsman and thrill seeker. It has been reported that he invested in a DeepFlight Super Falcon, an extreme submarine to thrill guests at his Laucala Island Resort in Fiji. Both Mateschitz and Yoovidhya are reported to be worth over $5bn apiece as of 2012. Red Bull has over 42 percent of the energy drink market share worldwide, and is in many ways a reflection of Mateschitz himself. He once told The Financial Times he would never allow the company to go public: “Thanks to our financial philosophy, we are not and never have been in need of additional capital, nor does anybody want to cash in. If we were to go public, the company would lose all of its benefits and in turn we would be left with numerous disadvantages.”
But it has not all been smooth sailing for Mateschitz and Red Bull. The CEO has attempted to launch a number of secondary energy products, like Red Bull Cola and Red Bull Energy Shots, both of which have been discontinued in key markets. Coca-Cola, Pepsi and Anheuser-Busch all have launched their own brand energy drinks, some more affordable than Red Bull, which has retained its premium price since inception. Between 2002 and 2012 Red Bull’s market share dropped from between 70 and 90 percent to just over 40 percent.
Mateschitz didn’t only spot a gap in the market for his brand, he created a market for energy drinks that never existed before
Mateschitz isn’t daunted. The 69-year-old has developed one of the biggest and most iconic brands in the world. He has earned the right to do what he likes. And he likes nothing more than perfecting the Red Bull image and brand through the Red Bull Media House project. Launched in 2007, it has evolved into a multimedia content producer centred on the brand’s identity. All of the Media House’s content is open platform, and aims to “cause direct consumer impact”. The Red Bull Media House was the team behind Baumgartner’s jump and are now launching a feature film to commemorate the one year anniversary of the record-breaking skydive. The media house is not profitable yet. But it is one of Mateschitz’s pet projects.
An industry wizard
Mateschitz has long been considered something of a marketing wizard in the industry. The development of Red Bull’s brand identity into not only a leading soft-drink manufacturer, but also a media and marketing powerhouse, was arguably his design from the very beginning. It is hard to imagine separating the two sides of the business today. Red Bull the energy drink, which is more expensive than its competitors, would probably survive without the big media stunts and sporting events supporting the brand, but it would also almost certainly lose market share. Without Red Bull though, we’d almost certainly be without some of the more interesting sports enterprises and ventures. What is clear is that the company would probably not have made it this far without the Mateschitz vision and dedication.
Sebastian Vettel in qualifying
“Since the beginning it has been a brand philosophy and how to look upon the world, rather than pure marketing for consumer goods. In both areas we are talking about content distribution as a way to tell our consumers and friends what is new about our approximately 600 athletes worldwide, their achievements and next projects; another band launch or song hit from Red Bull Records; what is going on regarding nightlife, people, events, culture, Formula 1,” he told Co.Create. “So it is both ways, the brand is supporting the sports and culture community, as well as the other way round.”
Red Bull is not a typical drinks manufacturer, and Mateschitz is not a typical CEO. Marketing and advertising have made Red Bull and Mateschitz what they are today; and they are more than just a department in a company, they are the backbone of the whole operation.