Redux Beverages LLC and Cocaine Energy Drink

Redux Beverages LLC is a Las Vegas-based manufacturer of ‘energy drinks.’ Energy drinks are rapidly overtaking soda as the beverage of choice amongst young consumers (Redux Beverages, Official Website, 2013). Redux’s founder and president is James Kirby. The company is privately-owned and financials are not available for public consumption. It is a relatively small ‘upstart’ company and has only recently begun to challenge Red Bull and the producers of other caffeinated, bottled drinks in the market.

As is exemplified in its ‘edgy’ name, the company caters to young consumers, specifically to students, club-goers, and others for whom staying up for long periods of time is desirable. “The little, two-dollar-plus, red can of ‘Cocaine’ is an energy booster drink that can be found in convenience stores, like 7-11” and looks fairly similar to other energy drinks, except for its unusual name (“New ‘Cocaine’ energy drink causing controversy,” ABC, 2006). Cocaine is also marketed in the form of energy ‘shots,’ which can be consumed by people who primarily want the high of caffeine rather than desire to actually drink a beverage.

Market/situation analysis: ‘5 C’ analysis

Company

Cocaine is relatively new in the energy drink market, compared with its competitors Red Bull and Rock Star. It was originally released in 2006 (New ‘Cocaine’ energy drink causing controversy,” ABC, 2006). Its name, a reference to an illegal stimulant drug, is a clear ploy to gain attention in a crowded marketplace. The company already has a substantial presence on social media via Facebook and Twitter. Rather than stressing particular physical benefits of the drink or its taste (since the target consumer is presumably not particularly health-conscious or primarily focused on this aspect of drinking the beverage), Cocaine is marketed as an ‘attitude,’ suggesting that its primary users are ‘hardcore’ and willing to take risks. The fact that the beverage gives the throat a burning sensation supposed to mimic actually taking cocaine even suggests that users of ‘real’ cocaine are being specifically enticed to drink it.

Collaborators

Cocaine is distributed through an increasingly wide array of states and marketing channels — the most recently-advertised new venue is that of New York State. Although energy drinks are sold in grocery stores as ‘food,’ other popular places to buy them include convenience stores like 7-11 and gas stations. These drinks are often impulse buys, bought ‘when needed’ and not part of a routine shopping trip, although some regular consumers of the beverages may buy them at a grocery store.

At present, this young company is still struggling for sponsorship. One recent alliance it has formed is with an alternative radio show. According to the company website, “One of our very first sponsorships, and a continuing sponsorship, is with the guys over at Morning Show Central. Cocaine Energy sponsors the show ‘Uncensored Net Noise'” (Redux Beverages, Official Website, 2013). The idea of being ‘uncensored’ and on the cutting edge of music or talk radio fits in well with a drink that is often consumed by musicians, clubbers, and students either staying out late or coming back from a late night.

Consumers

Within the energy drink market there are a number of potential consumer profiles. People use energy drinks as a quick pick-me-up because they either do not like coffee or because they need more caffeine than the average ‘cup of Joe.’ Common consumers include people working very long hours (such as truck drivers); students; and club-goers. All of these persons will have a slightly different demographic profile in terms of how they buy the drink and why. Another subset is people who use the drink as performance enhancement, such as those who work out at a gym frequently. However, they all share a common feature: consumers of Cocaine obviously cannot be squeamish about the potential ethics of naming an energy drink after an illegal substance. They like the fact that the drink has a slightly ‘contraband’ image. While “critics have been saying its name advocates drug use, and because of that concern, some stores are pulling it off their shelves,” its apparent exclusivity may be an asset amongst target users (New ‘Cocaine’ energy drink causing controversy,” ABC, 2006).

According to reviews of the product on Amazon, a typical positive review gushed: “the first Cocaine I ever drank, I was seriously buzzed. My body was shaking and I had a numb, tingly sensation, but it felt amazing. I didn’t have a ridiculous jittery energy high, but a focused high where I felt I could focus on video games for the rest of the night or write a long essay” (“Cocaine Energy Drink,” Amazon.com reviews, 2013). (the reference to video games also underlines that the target demographic is disproportionately likely to be male). Naysayers said they disliked the ‘cough syrup’ taste and the price (although they noted it was comparable to other competitor’s beverages like Rock Star and Red Bull). But the caffeine high was largely indisputable for most reviewers.

Competitors

All energy drinks, to some degree, market themselves as non-mainstream beverages, given the target demographic. The names Red Bull and Rock Star and 5-Hour Energy all suggest a certain level of stimulation beyond that of ordinary coffee and beyond what is ordinarily recommended for health. But Cocaine takes this a step beyond. Also in competition with energy drinks are more standard ways of ingesting caffeine, including coffee and soda. The closest competitor is that of Red Bull, an established energy drink that has a more mainstream image (and which sponsors a number of ‘respectable’ organizations, such as a soccer team). In contrast, Cocaine “promises the drinker will achieve a high, followed by a caffeine boost 15 minutes later that could last up to five hours. The drink also includes an ingredient that slightly numbs the throat, adding an oral sensation like the drug cocaine, and has caffeine content that is 350% stronger than its leading competitor, Red Bull” (“FDA finds Cocaine energy drink illegal,” CADCA, 2007).

While soda consumption is down amongst the target young demographic coveted by energy drink companies (in part because of the availability of more potent substances like Red Bull and Cocaine), Redux is also seeking to encroach upon the market of soda consumers. It is test-marketing “Cocaine Black Cola, a drink with a cinnamon and cola flavor that will be sugar free and have about half the caffeine of a regular Cocaine drink or shot” (Thompson 2012:1). In contrast to regular Cocaine, which is primarily being marketed as a stimulant, this drug will be marketed as a weight loss supplement. “According to the company founder: “This new drink will have ingredients in it that studies have shown assist the body in burning calories” (Thompson 2012:2). This new beverage will enable the company to compete in several different new market segments, expanding the product’s appeal to females in particular regarding its weight loss enhancement potential. Conventional cola drinkers, who would shy away from drinking full strength Cocaine might also be willing to give the drink a try.

Climate (Environment)

Unsurprisingly, government regulators and opponents of energy drinks were not pleased by Cocaine when it was first released. Although the beverage was never formally recalled, the FDA declared the beverage illegal when it was released and demanded the company reframe its marketing position in the form of a warning letter. “The FDA said the makers of the drink illegally marketed the drink as a street drug alternative and a dietary supplement….the FDA cites as evidence the drink’s labeling and Web site, which include the statements ‘Speed in a Can,’ ‘Liquid Cocaine’ and ‘Cocaine — Instant Rush.’ In addition, dietary supplements cannot carry claims to prevent or treat a disease — something only drugs can do, according to the letter” (“FDA finds Cocaine energy drink illegal,” CADCA, 2007). The FDA also said it did not include “adequate directions for its intended uses” (“FDA finds Cocaine energy drink illegal,” CADCA, 2007). To cope with the FDA uproar, Cocaine was forced to add a “humorous slogan…explaining that the beverage did not contain the illegal drug cocaine” (Thompson 2012: 1).

But although government regulations have occasionally thwarted Cocaine, other developing conditions have enhanced its appeal. It has a vibrant social media presence. Its ability to engage with users, posting pictures of people getting Cocaine under a Christmas tree or making edgy status updates that play upon the company name, has been a boon to the company. Also, given that availability has been challenging in some areas, given that Cocaine has been pulled from the shelves by retailers who have had customer complaints about the name, social media enables loyal patrons to more easily find where Cocaine is being sold.

Conclusion: Positioning

The driving tangible reason that consumers buy Cocaine is primarily its caffeine content. Taste is hardly an issue, given that many loyalists prefer shots rather than actual drinks. The main reason people consume energy drinks is for the caffeine ‘buzz’ and Cocaine offers more ‘bang’ for the ‘buck’ consumers shell out to buy such drinks. Cocaine is priced relatively similarly to other energy drinks. In terms of the intangibles of marketing its main value besides additional milligrams of caffeine is its playfully anarchic image. Consumers who want to transcend the legal limits of what is considered healthy and acceptable to purchase are likely to reach for Cocaine. The FDA’s stern rebukes to the company only add to its outsider appeal.

Works Cited

“Cocaine Energy Drink.” Amazon.com reviews. [2 Apr 2013]

“FDA finds Cocaine energy drink illegal.” CADCA. 2007. [2 Apr 2013]

http://www.cadca.org/resources/detail/fda-finds-%E2%80%98cocaine%E2%80%99-energy-drink-illegal

New ‘Cocaine’ energy drink causing controversy. ABC. 24 Oct 2006.

[2 Apr 2013] http://abclocal.go.com/kgo/story?section=news/local&id=4690059

Redux Beverages. Official Website. [2 Apr 2013]

Home

Thompson, Rick. “Controversial Cocaine energy drink back on shelves.” Country Times.

12 Jun 2012. [2 Apr 2013]

http://www.countytimes.com/articles/2012/06/12/news/doc4fd7be70aec09753187147.txt?viewmode=2