4 Ways Red Bull Made Billions From Nothing
Red bull is a non-alcoholic energy drink that gained popularity across the globe and made billions from almost nothing. Today, it is one of the most consumed energy drinks worldwide produced by the Austrian company, Red Bull GmbH. The brand’s journey began with a poor boy, Chaleo Yoovidhya, whose parents were Chinese immigrants in Thailand. Chaleo went from selling fruits and raising ducks to be one of the world’s greatest businessmen. When Yoovidhya met the Austrian entrepreneur Dietrich Mateschitz, their destiny changed, and the two together became tycoons of the energy drink business.
The following is the exemplary journey of how Red Bull made billions from nothing.
4 The Story Of Chaleo Yoovidhya
Chaleo Yoovidhya belonged to an underprivileged Chinese immigrant family who came to Thailand and survived on a fruit selling business alongside raising ducks. Chaleo realized early in life that he would have to move out with his parents to start a better business enterprise. Together they moved to Bangkok.
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He did not have much of an education, so he had to try his hand at odd jobs to make a living and support his family. He worked miscellaneous jobs, like, in his brother’s pharmacy and as a bus driver. Soon, he gathered enough resources to open his own pharmaceutical company called ‘TC Pharmaceutical Engineering’ and started producing antibiotics.
His life-changing discovery occurred when he came to know about the energy tonic that bus drivers and menial laborers consumed to keep going through the day. He knew that if he could create something similar to that, he would get a broader consumer base. At that point, there was already a local Japanese brand making a similar kind of energy drink. Chaleo had a twist with it by making it sweet and berry flavored.
3 Chaleo Meets Dietrich Mateschitz
By 1976, Chaleo’s drink called ‘Krating Daeng’ had already become famous in Thailand. Chaleo tried various business strategies to make it work. At first, he targeted the menial workers’ group. It was an extraordinary move because he went for the working class instead of the upper-class, which most other businessmen would not have done. Next, he started targeting various athletes and boxing champions.
In 1982, Dietrich Mateschitz came across Chaleo’s energy drink almost a decade later and marveled at it. Soon he met the TC Pharmaceutical Engineering’s business owner and spoke with Chaleo about expanding his business. Chaleo was initially skeptical about making a local drink and exporting to the west, but Dietrich eventually convinced him. They both invested about $500,000 into the business, and the shares they would get were equal, 49 percent for Chaleo, 49 percent for Dietrich, and the remaining 2 percent for Chaleo’s son.
2 Surpassing A Horde Of Obstacles
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The business that the iconic duo envisioned with their unconventional thinking was not without obstacles. First of all, the drink was not well received by trial groups who were hired to judge the product’s reception in the global market. The trial group members disliked the taste of the drink and thought it had a bad aftertaste.
Dietrich Mateschitz did not want to give up. From his office in Austria, he made every attempt at distributing the product all over the globe. After receiving the approval of the health ministries of different countries, including Austria, Dietrich Mateschitz along Chaleo decided that they were required to change the taste, logo, and brand name of the product to make it a success.
1 Brilliant Marketing Strategies
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Red Bull began as a flop but later boomed because of the creators’ excellent marketing strategies since the beginning. For example, the name Red Bull and the blue, silver, and red aluminum can, came across as attractive to the consumers. That is how Red bull survived most of the competition with other energy drink brands that people were already quite familiar with. Reports indicate that Red bull invests about 40 percent in achieving marketing goals.
Another important strategy adopted by Red Bull was sponsoring famous athletes, sportspersons, and especially Formula 1 racers like Gerhard B. With their brand promotion, more people started believing in the logo representing power, and their slogan, “Red Bull gives you wings.” gained much popularity. Dietrich Mateschitz also encouraged students to throw parties and get free cans of Red Bull. This drink started becoming a favorite amongst the youth.
Now Red Bull usually sponsors all kinds of thrilling sports activities and dangerous game events. It is coming to be associated with courage and living life to the fullest. Red Bull has even bought whole teams of F1 and now is hyped amongst F1 fans. But Red Bull is constructing an image that is curative by being a part of the Wings For Life Research Foundation, looking into ways of curing spinal cord injuries.
Red Bull might be an expensive non-alcoholic drink, but it has become so popular that now it is available in every convenience store and is the most preferred beverage among the masses. Chaleo Yoovidhya, who started from nothing, is currently one of the richest men in Thailand. Likewise, Dietrich Mateschitz is also one of Austria’s richest people, with a net worth of about $28.2 billion.
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Source: Hook, Referral Candy Blog, Marmind, Forbes
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