Hi listeners, today we dive into the fascinating
story of a global powerhouse that on the surface
appears distinctly Western, yet boasts surprising
Asian roots. This isn't just a company that sells
a drink, it sells a feeling, the promise that
gives you wings. It's a brand that established
dominance not through traditional advertising,
but by deeply embedding itself in the worlds
of niche sports, adrenaline junkies, athletes,
artists, and innovators, cultivating an exceptionally
strong and loyal following with these high -influence
communities. Instead of just ad placements, it
operates like a full -fledged media company,
producing high -quality documentaries, films,
music, magazines, and other digital content,
often with the product subtly or even entirely
in the background. Yes, you have guessed it right.
We're talking about Red Bull. In this episode,
you'll discover its humble beginnings in Asia,
its journey to Europe, its groundbreaking marketing
and content creation strategy, its evolution
from sports sponsor to team owner, why you can
find at least four different Red Bull cans in
China, and the ongoing legal battles it faces.
Let's dive in. Welcome back. First of all, how
do we pick this company? Should we just recap
that? We asked Deep Seek, I think. So after we
recorded the Deep Seek episode, we immediately
decided that we should record this episode. Pretty
much. Yeah. Yeah, it was decided. This company,
even though on the surface level, it may look
like a non -Asian company, but it is actually
of very heavy Asian heritage, right? Yes. Interestingly
enough there is even a subsidiary that is registered
in China. Yep. It's a, spoilers, joint venture.
Joint venture. Joint venture. But it's like,
I think even though we're talking about one company,
we're actually talking about three companies
today. And two -third of the three are Asian.
Yeah. Yeah. And two -third of the companies are
still very much operating within Asia. Very active.
Yep. And they're fighting with each other. Yeah.
Oh, here's another wonderful hint. We both watch
F1. And this company is heavily related to F1.
I think by now, you just gave it away, I think.
What other semi -Asian companies are heavily
associated with F1 other than Red Bull? My favorite
driver. I don't recall when exactly I became
a fan of Red Bull. Pan's favorite driver. Yeah.
Well, another fun fact for the company. In 2024,
the company, even though it only sells... energy
drink, but it sold 12 .6 billion cans of energy
drinks. It's almost the world population. That's
a lot. Should we dive into the history of how
Red Bull started? Where do we start? We start
with the very, very first part of Red Bull. How
was the drink created? So the company, Red Bull,
didn't start off as a drink company at all. And
before we dive into the company, one thing I
want to point out, is the drink of energetic
tea or flavored tea in Southeast Asia and even
in the tropical part of China has been a long
history. And if you ever visited the southern
part of China, offering refreshing tea drinks
is a very normal thing, especially during summertime.
When you go back, you can still buy a lot of
those. Our first guy, his name is... Okay, I
will... I can try the Thai version. Go for it.
So it's Chaleo Yuvidia. Yes, Chaleo Yuvidia.
He was born in 1922, and he is Thai -Chinese.
Originally in 1922, he was born in Hainan, Wenchang.
Also known today as a province, as a village
that produces a lot of free range chicken, like
the Wenchang chicken. Yeah, surprisingly, he
is the founder of the drinks recipe. Yeah, so
if you look at the map of China, there's this
little island on the very southern end. That's
Hainan. That's where he's from. Yeah, that's
where he's from. And he was also once upon a
time, because of Red Bull, one of the richest
men in Thailand. Also, well, I guess it doesn't
hurt to mention he passed away already. He passed
away in 2012. I think this number will help a
lot in understanding some of the later half of
the story, which Linda will show a lot, at the
age of 89. Chaleo, just for the easiness of pronunciation,
I'm going to address him with his first name,
not because I'm really familiar with him. Also,
we don't want to confuse him with his heirs later
on in the story. Yes, yes. He worked in a pharmacy,
and later on in 1962, Some other accounts claim
it to be 1950s. Yeah, 56. So maybe there's a
little discrepancy there. Somewhere around that
10 -year period. Somewhere around that. He started
his own pharmaceuticals. And that pharmaceutical
company is called the TC Pharmaceuticals. We'll
just call it TCP for short later. Which is what
they still call it up to today. Yes, that's right.
In 1970s, he came up with this, drink that has
water, caffeine, sugar, and some other functional
materials like vitamin B or taurine in this drink
and call it a crating thing. There you go. I
think, I don't know. I'm trying. That's fantastic.
But did you know how he got the idea from? Here's
what I found. And I'm just trying to put all
the ideas together. Okay. Going back a little
further. Kratting Dang isn't the first. It just
sounds like swearing so much. Why don't we call
it Red Bull Thailand? Because for our audiences,
Kratting is India bison, which is bull. And Dang
is red. So it's the reverse of Red Bull. So where
did he get that idea? Before the 70s, there is
another energy drink that is originated in Japan.
And even in Japan today, you can still find it
in 7 -Eleven. Yeah. And that energy drink is
called Lipovitin D. Yep, Lipovitin. It's a small
brown bottle that is 150 mils that is mostly
vitamin B and taurine and maybe some vitamin
C. This is the very first model of the energy
drink in Asia. And the primary user and audience
for this drink has been labor duty workers, truck
drivers. Yeah, your typical blue collar folks
who actually work pretty long hours. And I think
it got popular in Japan actually after the post
-war period because a lot of folks need to work
long hours during that period. was brought by
a company in Japan all the way to Thailand. He
had that and he tried... Well, I think he saw
his workers, his pharmaceutical employees having
a drink. And then he realized, yeah, there's
a business opportunity. Since then, he decided
to put aside the pharmacy business and went all
in for this energy drink. And this energy drink,
he named it KD. Red Bull. Red Bull, yes. Red
Bull Thailand. That's sort of officially the
first chapter of Chaleo. He found the recipe
and polished it and made it happen in Thailand.
But the only difference between the version that
he created versus the one in Japan is the Japan
energy drink is... more of a premium drink. If
he wants to localize that product in the Thai
market, then he would have to make it a lot cheaper,
which is exactly what he did for the Thai market.
Okay. So one other thing I found during research
is that his pharmaceutical business actually...
Wasn't exactly what we think of as pharmaceuticals
today, where you research and develop a drug
over the course of, you know, 10 to 20 years,
and then you sell them with some kind of 20 year
protection patent. His pharmaceutical company
back in the days was purely kind of a shop front
where he's a middleman. So he got some, you know,
no name brands manufactured somewhere, and then
he does some marketing and then sells it. And
that model quickly has margins eroding. So when
he discovered, he was actually on his way to
find something new for the company to make more
profit on while his margins in the pharmaceutical
business are suffering. And so he came across
this. And so it wasn't just like... A random,
yeah, he was looking for a business opportunity.
Yeah, he was looking for a high margin mass market
opportunity. And nothing is better than an energy
drink that doesn't hurt you anything, but just
bring you to a good spirit. In 1982, here comes
the Austrian guy. The Austrian guy, his name
is called Dietrich Markwirt Eberhardt. That was
really good. That is really difficult. Shall
we just call him Mattishes? Mattishes. Or can
we just call him Matt? Let's call him Mattishes.
Yeah, Mattishes. Mattishes, okay. At the time,
in the 80s, he was working as a brand manager
for... BlendX, right? Yes, for BlendX. And BlendX
later got acquired by Procter & Gamble. And before
BlendX, he was working for Unilever. So he basically
worked for like the two top FMCG. Exactly. The
top brands in FMCG. So he was visiting Asia and
he was very jet lagged. While he was in Thailand,
he bought the Thai Red Bull. And surprisingly,
it was able to make him feel very energized and
it doesn't feel the jet lag anymore. So he remembered
that drink. And since then on, he had planted
the idea that maybe I should do something with
it. Our match is he was born in 1944. So by 1982,
he is 38. So just write about the time that you
have your midlife crisis. Ideas of taking something
on your own with your expertise. Exactly. So
he was on a business trip with his current company
and he had a drink and he thought it was amazing.
At that point, he was like, I must bring it back
to Europe. Working as someone with extensive
experience in marketing, you would have an eye
to find good consumer products. There's potential
in cutting thing. That's right. Okay. There's
not so much the name, but definitely the dream.
So how did he convince Charleo to... Partner
with him or give him the brand. Yeah, you see,
that's interesting. So Matic was very interested
in franchising the brand, Red Bull. So he decided
to find Chaleo and have a discussion in 1982
in the same year. Since 82 to 84, the two of
them had rounds and rounds of discussions. And
finally, two years afterwards. they jointly created
a sort of a joint venture company. Yeah. That
is registered in Austria, in Salzburg, with Chaleo
holding 49 % of the company and Mattis is holding
the other 49 % of the company. And then the 2
% is held by Chaleo's first son. Yeah. Whose
name is Chalarm. anyways his firstborn son um
and this is just because you should never form
a jv with uh form a jv with a 50 50 ownership
because you'll never when you don't agree on
things uh it's a hassle so the 51 49 ownership
was done on purpose right basically yeah um so
it took them two years to figure this business
model out i think at some point i remember uh
reading that so chaleo was like if you want this
brand to be sold in europe why don't you just
buy a bunch from thailand ship it to europe and
you can sell it there right and i think matushas
wants a little bit more than that he wants a
bit more ownership and he wants also chaleo to
be partnering with him and so that's what eventually
took two years he just came to the company and
he came to chaleo and said hey, I want to be
distributing this drink and remaking this in
Europe. Do you allow me to do that? And when
I do that, I don't want to just resell it. I
want to be incorporating this with you. Let's
do this together. Yeah. I think it's very hard
to say no to that kind of deal. Like it's still
having you as a part of the business. Right.
You'll be overseeing and doing this with me.
So I think it's a... quite fair way of operating
but but also getting chileo to put up 50 500k
yeah of his own money in a country that he's
not familiar with means that Throughout the two
years, Matusias has done some good convincing
as to his capabilities in marketing, which he
has later proven more than right. Yeah, I know.
Such a good investment. Such a good investment.
500K compared to today. That's, I don't know
how many times it has... 10 billion. 10 billions
of dollars. Yeah, very good investment. Yeah.
So what did he do after he brought the drink
to Austria? Right. So... The primary purpose
of starting this business in Austria is to be
able to distribute or to recreate this drink
for the European audience. Yeah. And to be able
to distribute this to the audience. As a drink
company, your goal is to sell as many drinks
as possible. But you just have to make that product
be very fitting to the local audience. Yeah.
So definitely don't name it Something that most
people can't pronounce. Selling this in Austria,
that's not gonna, yeah. Yeah, so the first thing
he did is renaming the brand. Right. What he
did, what Mattis just did when he went back to
the EU is he decided that Red Bull should be
a carbonated drink. It should not be a still
condensed shot. I agree with him. We just had
the still condensed shot just now. Yeah, out
of the research, we actually bought a few bottles
of Red Bull because it has been a very long day
for both of us. And we are sitting down in a
very hot summer day in Beijing. Drinking non
-carbonated Red Bull. Yeah, it's a bit weird.
And second is changing the size. The original
Lipovitin D, the energy drink, is 150 ml and
in a brown glass bottle. And this drink, typically,
if you buy it, back in the days, it means high
quality, high -end premium drink. And Mattishes
changes that into a 250 -milliliter aluminum
can. And it was sold, and I was quite shocked
by the price, at $2. Right. When it was first
introduced to the ski resort. This is in the
80s, right? This is in the 80s, $2. Is a lot.
In comparison to a Coca -Cola, which is about
50 cents. Yes. A Coca -Cola was also larger than
that. A Coca -Cola is 12 ounce, which is 350
mil. And it was only sold at 50 cent to 75 cent
at the time. So in hindsight, it's actually pretty
marketing genius, right? You raise, if you're
going to raise something, raise it. more than
two times the original price like don't raise
it by 20 you'll not make a difference in terms
of impressions that's correct but the difficult
thing i think is how do you convince your audience
that it is worth two dollars right right and
that is the power of marketing when you create
a, not just a 15, 20 % higher price drink, but
a completely different drink, you almost need
to reinvent the drink itself. You need to create
a new category such that this category with your
drink, with your price, everyone will accept
that. So that was what Mattisches was aiming
for when he created the new Red Bull, a premium
energy drink in europe come to think of it you
know and now creating a new type of drink yeah
is quite a risky thing to do it is quite a it's
very risky also i did a okay so for those of
you just a little blurb on fmcgs in general what
is an energy drink if you look at the ingredient
list uh most energy drinks would have a couple
components besides water right There is vitamin
B, there is taurine, which is this amino acid
that humans can... can make ourselves, but we
may or may not need them every day. It's semi
-essential. We will not die if we don't have
enough taurine. And there are still a lot of
inconclusive studies about this particular ingredient.
The other ingredient is caffeine. Most of the
energy drink bands are from pairing taurine with
caffeine because most of the FDAs would think
that this is a very over -pairing pair and could
have long -term health effects on people. Really?
Yeah. Yeah, you're pairing both of those. And
especially for kids, for younger people, this
could be potentially dangerous. That's interesting
because we drink coffee every day. And then taurine
in traditional Chinese medicine is also a very
common ingredient that barely has any medicinal
effects. But mixing the two is not cool with
most government health organizations out there.
Typically in FMCG, you would have the alcoholic
drinks and non -alcoholic drinks. If you look
at the recent reports, you can find out in non
-alcoholic drinks, there are two specific types
that are still growing quite rapidly. One, obviously,
is the red energy drink. Okay. Obviously. What's
the other one? The other one is fortified water.
Fortified with like vitamins? Minerals. If it's
from a purified region, if it's from a good spring,
Mattis' son, Mark, actually has a purified water
line. And the company that you will mention later,
the Chinese company, also has a purified water
line. And all of these are... trying to tailor
to the consumer's demand. It's just fancy bottled
water, no? Well, all of the trends are coming
from younger folks' needs these days are no longer
like very sugary, very diversified, but they
want clean and functional drinks. Hence the 45
water and energy drinks. Anyways. Interesting.
Okay. Going back to 1980s. Yeah. He, Matt Hitches
brought this back to Austria. He made a bunch
of change to the ingredients and he raised the
price. He raised the price. If you raise the
price, then you will have to find ways to justify,
to tell the stories of why this is worth his
price. And then obviously as a marketing professional,
this wouldn't be so hard. So he tried a few things
and some ended quite well. And some, when you
look back, You're like, I don't understand why
you did that before. But it's a portfolio effect
as long as one of them or two of them works out.
That's exactly right. So what did you try? If
you look at the photos that I put in my note.
I'm not supposed to, I think I'm not supposed
to sneak into your notes. We decided not to sneak
into each other's notes. We decided to start
it with two locations specifically. One is college
campus and then the other one is bars. Did you
get that? But besides the ski resorts and so
on, we'll start with the both of those. One specific
carrier of advertising is called the MET, the
Red Bull Mobile Energy Team. It's basically the
MET. It's a different MET. A program where college
students can promote Red Bull at various events
and locations. You can even find some of the
Red Bull Mini Cooper cars with the Red Bull cans
on top of it. Yeah, I saw a photo of that. Normally,
if you were to have a Red Bull college campus
kind of event, it's very easy to find the automobile
just around it. Actually, in our F1 race in Japan,
we saw one. Okay. I took a photo with it. Oh,
right. Yeah, yeah, yeah. They still exist today.
Yeah. So that is a Red Bull vehicle pairing up
with the MET mobile energy team. And they just
go around the campus. They go to all of the places
where the Red Bull event is at. It's very photogenic.
You take a photo of it. Like social media passes
also very fast. But this was used when it started.
And I think they were giving away for free right
in the beginning. Just to have interest on campus.
For sure. Because no one knows what it is. Yeah.
It's supposed to be helping you with focusing
on your homework and drinks. Here's another thing.
Focusing on your homework, really? Just get energetic.
But that's a nerdy way of drinking Red Bull,
but I'm sure all the Americans... I'm sure it's
used for parties. I'm sure it's used for parties.
Hey, I'm Asian. I drink Red Bull to cram my studies.
Right. I'm sure that's used. I'm sure that's
used. Oh, yeah. Plenty of Red Bulls was involved
in my undergrad. Yeah. The other attempts, are
you familiar? You're probably not the target
audience for that, but there is a Red Bull Girls
in college. I'm definitely not. You're definitely
not the target audience for that. So they're
basically wearing a Red Bull can -shaped bag
and handing out free drinks. So that's the free
drink unit that you mentioned. Got it. I've definitely
seen these kind of bags when I was in college.
They have a summer version of that, and it looks
like this. What is that? Scandalous, right? What
does that remind you of? When I first look at
that, I'm like, exactly. That looks like Hooters.
All right. So sex sells, I mean. Right. Yeah.
Think about this. We're not the audiences, but
if guys were on the other end of being offered
a Red Bull with that, who can say no to that?
Free Red Bull drinks. Being handed to you by
hot girls. Yes. I say yes. Too good to be true.
So that's a second way. And I think still a lot
of the energy drinks, since they target... like
the younger folks, not the underage ones, but
like the college students, these kind of marketing
methodologies are still being used everywhere
you go to. And last bit, I think we both got
the bars. Is it called Jaeger and Red Bulls?
What's the mixed drink called? You can mix up
quite a lot. So Red Bull wasn't traditionally,
obviously, a bar drink until Mattis has made
it. So he helped Red Bull. He actually worked
with bars. to serve red bull and make it uh red
bull plus alcohol right i don't do i did he think
of this first or did coca -cola think of this
maybe coca -cola okay coca -cola and whiskey
and jack daniels yeah red bull and everything
else red bull vodka i'm sure like people have
had that before that cheap and easy keeps you
very excited but in the meantime like dizzy at
the same time never liked it never yeah it's
weird how caffeine and alcohol doesn't mix together
It just tastes very weird. Whether it's the carbonated
version or the non -carbonated version, I don't
like the scent of the drink. It's never a drink
for scent. It's always just a drink to endure
the night. It gets you drunk quick. All of these
strategies are not new. These strategies are
pioneered by Coca -Cola. Coca -Cola has used
all of them before. So was it all smooth sailing?
So he got the college kids interested and he
got the bars to sell his drinks and then boom,
it's everywhere. You're starting a new category
of drinks that no country has ever dealt with
it before. And your ingredients are also quite
aggressive. Does that sound safe to you? Like
for kids especially, right? Moving into the 90s,
Mattis has definitely benefited from the new
European Union laws that allows one company to
launch across EU without any additional permissions
or licenses. Okay, so he gets approved once and
then it's available everywhere. It makes it easier,
I guess, operational -wise. But he definitely
encountered quite a lot of hurdles in that process.
Red Bull was deemed to be... quite dangerous
and doesn't have sufficient long -term safety
data for a list of very conservative European
countries. In France, Red Bull was banned for
12 years. It was just completely unavailable
in France. So if you want to drink Red Bull,
you have to be going to another country. The
reason the health authorities in France think
that it was unsafe was because of the not yet
understood effects of taurine and especially
combined with high caffeine. So that could be
very risky. In Denmark, Red Bull for a very long
time was only available in pharmacies. And so
is Norway. Because people couldn't understand
why is this drink carrying so much taurine and
caffeine, they decided to not put it in retail
spaces and just put it in pharmacies. I feel
like it's just the mix because the coffee has
been available, right? And is it just taurine
is not an ingredient that's used in non -recreational,
not recreational, like only pharmacy? The FDAs
in all of these countries are being quite conservative,
so they don't want something that is so understudied
and so high -dosed in one drink to be paired
up with caffeine to be sold in a mass marketplace.
Really hard to be a first mover. Yeah, it's very
hard. It's not easy. And when you're starting
with somewhere that's relatively conservative,
it can really slow you down. In Germany, it's
the same story. There isn't like a clear ban,
but there is definitely a lot of regulatory challenges.
The German food regulations did not like the
original Red Bull and asked for reformulation
for the market. Also, your hometown, Canada.
Canada, yeah. So in Canada, for a very long time...
Red Bull can only be sold in pharmacies too.
And later on, it became a more widely populated
retail store items. Yeah, that must be way long
time ago. Yeah, it's in the early 90s and it
lasted mostly until 2004 or 2009. That's actually
a lot longer than I expected. Were you ever handed
a Red Bull when you were a kid? Oh no, actually.
You see, here's an interesting thing. Actually,
I had a Red Bull when I was in China as a kid.
That was not an issue. That was... Okay, I'll
give you... I'll share my stories after this
quick fact. So in Lithuania, Latvia, and Turkey,
Red Bulls are not banned but restricted to be
sold to minors, like the younger kids. And in
China, I think... When Red Bull was first introduced,
which you will share like ample amount later
on, in the 90s, 1995, I vividly remember the
moment that I was being handed my first Red Bull
ever. I think it was when I was in elementary
school. Red Bulls are very popular as a gift
for Chinese New Year. And you don't send it just
by a pack. You send it in a box. Do you remember
that box? It was a card box of, I think, 12 cans
of Red Bull in it. Right. And for some reason,
my parents, they are always very... shy to give
me a bottle. And then they would tell me, even
though I want to drink it, I thought, oh, like
this is like Coca -Cola. I want one. It's not
advice for kids, right? No, it's not. No. So
my parents are being very cautious of kids. It
is caffeinated. And caffeinated. But I wasn't
told that. I think someone else told me that,
oh, like this is good for men. So I thought,
oh, is it Viagra? But later on, I realized, does
it have that effect? So in my mind, Red Bull
has always been associated with that in my very
early childhood, in my elementary school. And
later did I realize, oh, oh, it's just an energy
drink with some vitamins in it. I was like brand
image being refreshed. So that was my very short
Red Bull story. I heard that in some country
because it got banned, it was associated with,
you know, because the mattress was marketing
it to the party scene and having it banned in
some countries actually played into their favor.
Not in terms of obviously sales, but people would
travel across the border to get this like. outlawed
drink in their country and it'd be a very rebellious
and college thing to do right the the fact that
it's not available only make people want it more
exactly so you might have the health authorities
to thank marketing methodologies did he realize
this business is a good business at the beginning
not really but i guess from the numbers that
we can collect today, you can clearly see energy
drink among all FMCG non -alcoholic drinks is
such a good high profit margin business. Let's
look at the margins for bottled water. Your net
profit margin can go anywhere between 3 % to
8%. That's for bottled water. For coffee shops,
that's 5 % to 15%. For juice and ready to drink
tea and ready to drink coffee and bottles, it's
5 % to 12%. Premium juices, 10 % to 15%. Energy
drink itself is above all of them. It goes 18
% to 25%. Wow. I think that's why it's still
growing rapidly. So guys, if you want to start
a business, I guess in consumer FMCG, go for
energy drink. In fact, we are seeing a lot of
new brands these days. Do you think energy drink
as a category has the highest margin across all
type of drinks right now in the market because
of Red Bull? Because if it wasn't for Matic's
strategy, and he started this whole category
to begin with in the world, right? If he decided
to price the first Red Bull at, say, at a 10
% premium compared to Coca -Cola. Then maybe
this category wouldn't exist. Right? I know.
Yeah. This was actually my conclusion. Oh, sorry.
Oh, my God. Take your conclusion. We'll come
back to that maybe in an hour. But he is such
a fantastic marketing genius that he created
a new drink category from scratch. product market
fit was great and he was able to educate throughout
the process like what energy drink is what functional
drink is yeah so if he's if anyone were to question
oh why you know mattish's what is his biggest
contribution to the consumer like fmcg world
i think that he created this category yeah and
he made you pay more happily for it Yeah, exactly.
Before Red Bull, a functional drink isn't a mass
market product. Functional drink is very niche
and it's very low end and it only serves blue
collar. But because of Red Bull and later on
with the competition with Monster, it became
a more serious category and can be offered at
a much higher price. Right. And all because of
that. From my perspective. I think so. I totally
agree with you. He created this and he made the
margin height at the get -go. Even today, he
outsourced the production and manufacturing bit
for the drink. Oh, okay. So if I'm not good at
it, I'm not going to do it. Precisely. And he
would only want to focus on the marketing bit.
And we'll come to how he did the marketing later
and how he made all of us Red Bull fans. Right.
Without even knowing. Without even knowing. Like,
do I like the drink? I'm okay. Like I don't mind
drinking. But we'll buy it. And are we Red Bull
team fans? A hundred percent. You are. Okay.
Well, I'll not reveal it because it's irrelevant,
but yeah, but because of Red Bull. we have more
cultural associations to Ripple than just a drink.
Right. And all because of Matash's work. And
also in that process, because he's so focused
on branding and marketing, Matash has refused
to give personal interviews and allow anything
to be about him. It's more about the brand itself.
Wow. So that's something that most of the brands,
most of the... companies find difficult to do
because the owner the ceo would maybe at some
day always want that story to be about themselves
instead of the brand i think it's an introvert
versus extrovert ceo kind of thing like he uh
they've also made their headquarter you mentioned
at a very small town um and i think that's different
from say if you moved your headquarter to like
I don't know, London or New York, right? So you're
that kind of people person. You want your face
to be the brand versus you want the brand to
be the brand. Right. You want the brand to be
the brand. How did I find out Red Bull is from
Austria? Here's a story. In 2016, oh, well, from
2015 to 2016, I was very briefly working in Austria.
I was working in Vienna. And my parents came
to visit me. It is so far away for them to travel.
I decided to bring them all the way from Vienna
to Salzburg. The reason we're going to Salzburg
is because, okay, this is about to be very touristy,
but the Sound of Music tour starts in Salzburg.
And we sign up to the bus ride to the location.
And on that bus ride, we made a stop. And at
that viewing point, you can see... a little leak
or a little water area, and right next to it
is attached with, let me show you, it looks like
this. Like a round thing. Yeah, with some bull
statues in front of it. Is that the Red Bull
ring? That is the Red Bull headquarters. Oh,
okay. And you just stare at it, and it is in
the middle of nowhere in Austria. Yeah. It's
like a farm, and it's just so beautiful. And
you would not have associated with an energy
drink or tour guide. An introvert owner. Yeah,
introvert owner. The tour guide told me, oh,
this is the headquarter of Red Bull. And at that
point, I'm like, oh, isn't Red Bull a Chinese
company? Why does it have a headquarter in Austria?
I have so many question marks. And that was 10
years ago. And 10 years afterwards, now I have
the answer. So you've been to Red Bull headquarters
without even knowing the brand is... Like one
-third Austrian. Yeah, one -third Austrian. I
had no idea. And I then told my mom and dad that,
hey, this is the company of the energy drink
that we know of. And then they just very casually
said, oh, cool. And then we went on tour trips.
They didn't care. Nope. And we went on to the
Sound of Music tour, which turned out to be a
fantastic tour. Nice. Really worth it, but it's
definitely not Austrian. It is 100 % Hollywood.
Okay, coming back to... Red Bull marketing schemes.
And why is it so great? Going on, Mattages did
not take the money that he made out of selling
drinks, but reinvested all of the money. 15 years
of all profits were reinvested to marketing and
spreading to the growth, to strategy. All of
these events, all of the profits that's made
went back. to the strategic projects, the investments,
and the different competitions that they sponsored
and later on became the creator of the events
itself. Another fun question for you, Linda.
So for a company like Coca -Cola or a company
like Pepsi, do you know how much in their annual
revenue would they invest back in marketing or
branding? What's the percentage of revenue that
is being invested in branding? Cheating a little
bit. I kind of roughly had a... I don't know
the exact numbers, but I think they're below
like 5%. That is about right. So in 2021, for
Coca -Cola company, the marketing percentage
of revenue is about 10 -11%. Well, that's more
than I thought. Yeah, but for Pepsi is about
5%. Guess how much Red Bull invested? Way, way
more. Way more, yes. So like 20, 30, right? Yeah,
28%, close to 30%. But also, mind you, because
it is not a public company, so all of the numbers
are from the open source materials that we could
get. All we can know is that it is much higher
than a traditional FMCG company, whether it's
accurate, like 28%. Or 28 .5. 28 .5. And I would
say it's... It has a much better return on every
dollar spent. Yeah, they have put in a lot of
money into sponsoring, started with sponsoring
events. Red Bull's revenue was about 11 billion
euro in 2023 and they put in about 2 .6 billion
to 3 .1 billion. into marketing marketing alone
so i'd say it's very fair to say red bull is
just a full -on media agency or like a media
powerhouse do you know roughly how they divide
this three ish billion dollars is because i i
think i i saw somewhere that only a hundred million
which is three percent three percent of of this
three billion dollars is going into your traditional
like tv and digital advertising right so where
does everything else go i don't have the exact
breakdown But we can take a look at the series
of events that they have done. We can have a
mental ballpark of how much each of those would
cost from high to low because there are so many
of them. Yeah, Formula One. Starting with Formula
One, probably the most costly one. I think so.
So I think we can roughly break down their marketing
budget into a few things, right? So there's obviously
extreme sports sponsorship. So the pure sponsorship,
not the team ownership stuff, where they sponsor
at least a thousand athletes that are into extreme
sports. So pretty much everyone I love watching
and snowboarding. And you mentioned someone in...
Ailingu. Yeah, Ailingu. And breakdance competition
is still going on. Breakdance championship every
year. So those sponsorship dollars, they also
have sports ownership. So they invested... probably
in the billion dollars into their rebel teams
to rebel team invested teams and they are also
in at least four countries in terms of football
involvement as well as hockey and then they set
up their own Media House, which creates content,
right? Anything else I've missed? And then there's
the 3 % traditional advertising. Right, right.
Yeah, so those are the, I guess, four parts.
Four main parts. Four main parts. And in the
Media House, if you were to go to Red Bull Media
House and click on Red Bull TV, it's a beauty.
It's 24 -hour. Something is always on. 24 -hour
extreme sports? 24 -hour extreme sports. You
will never be bored. Something is always happening.
Yeah. So maybe let's go into... other than the
traditional advertising maybe let's go into them
one by one how the money is made well okay first
of all first of all we can talk for hours about
f1 but we can model life okay what do you want
to talk about first okay i have a breakdown of
all the sports events that they have sponsored
in or co -created in uh we're just gonna take
two hours no no okay But we'll just give a quick
shout to some of the most noticeable ones. So
you will know the scale of these events and how
many people are looking at it. And maybe you
would have numbers that is like complementary
to the views, you know. So I think at this point,
motorsports is likely the largest. Formula One.
Red Bull Racing F1. Woo! First stop in! Okay,
so this is... Yes. So Red Bull owns... and operates
Red Bull Racing. And these are cash app RBF1
teams, so two teams. V -Carb, for short. V -Carb,
sorry. V -Carb, for short. So that is the largest
expenditure in motorsports. They do also have
sponsorship in MotoGP and other motorsports.
And they have a failed NASCAR investment. That's
right. Later, NASCAR went to Monster. For sponsorship.
Oh. Yeah. But pure sponsorship or team ownership?
Sponsorship. Okay. Yeah. Not yet team ownership.
Got it. So also in the motorsport segment, MotoGP,
Red Bull KTM Factory Racing, World Rally Championship.
Wow. I didn't know they were, other than the
two Red Bull teams, they were into so much motorsport.
Yeah. Motorsports. And second bit, the action
and extreme sport. And we had a very brief discussion
about that. Why did they not go for the mainstream?
Why did they go for like the niche, the extreme
sport? Did you know? I think I found out why.
My hypothesis is that it was cheaper because
football is expensive. Basketball is expensive
to sponsor. Whereas back in the days, if you
think like late 80s, 90s, even the early 2000s,
extreme sport wasn't as popular as it is today.
And so finding, A niche market is what they need
to do to get the most out of your dollar of marketing.
I think that's the primary reason why they went
for extreme. They also want their image to be
associated with that. So that's Mattish's thinking
very ahead of its time. And the most mainstream
sports event at the time has already been taken
by Coca -Cola. Oh, of course. The Olympics. The
Olympic game. Ah, okay, okay. And when did Coca
-Cola sign the deal with Olympic? They started
collaboration as early as, I think, 1928. Wow.
Yeah, Coca -Cola holds the distinction of being
the longest -standing partner for Olympic movement,
supporting every edition since 1928. All right,
so before Matisse was born. Yeah. Cannot compete.
Yeah, it was already a thing. And Coca -Cola,
Coca -Cola's logo will for a long time just show
up right next to the Olympic logo. Wow. Yeah.
So it's nothing groundbreaking, but managers
just have to find his niche. Yeah. That was his
goal. And it totally worked for the brand image.
But I think it's also... it's a kind of a circle
right it worked for the brand image and therefore
it it benefited him and it benefited extreme
sports as well i think without so many investments
coming from red bull a lot of the athletes would
have uh not have continued into their careers
as much so so one extreme sport that we both
watched online because it's on youtube it's the
red bull stratos You haven't watched it yet.
We're going to watch this again. You're going
to watch this. I don't want to watch it anymore.
I've read about this in an article way too many
times and saw a lot of photos. It's too scary
to watch. I'll watch it by myself. So the guy
who did the Stratos jump is called Felix Baumgartner.
Okay. And it is a groundbreaking free fall from
the space. Yeah. One -off event. Massive sponsorship
and production. Do you know what is the exit
altitude of that jump? No. How far away is it
from the ground level? I just saw one image and
I saw the earth curvature. You know how you're
in the space and you see an astronaut taking
a photo, but I don't know the exact altitude.
It is 39 kilometers away from the earth. Wow.
What is that? 39 kilometers. 39 kilometers away
from the earth. And the maximum vertical speed
was 1 ,357 .6 kilometers per hour. Is that even
feasible? Okay, guys, what is the maximum speed
for an F1 car? 380 kilometers per hour. There
you go. So you're effectively dropping onto Earth
at a speed that is three times F1. crazy that's
crazy that's why i don't want to watch it yeah
he has protection and then on that protection
it has red bull all over of course of course
because you put in so much money and that reminds
me of the tesla stunt of uh the car around the
space right but only it has a human in it and
he's a human jumping off he's willing to do it
for well not for red bull for i mean his own
achievements but but it's It sounds very risky,
no? Yeah. And how much money did that jump materialize
or did that jump yield? So a figure I had was
a yielded... So overall, the project costed $50
million USD for Red Bull to set up. And it's
all the research, all the equipment, getting
him up into space and just making sure everything
is safe for this guy, right? But then immediately,
not immediately after actually, they calculated
the total. So it generated 50 million YouTube
views for $1 for each view immediately. Then
you have other effects of marketing that comes
with all the reporting that goes around this
project. So overall, the number is $1 .6 billion.
So they generated 30 plus times what it costed
them. So it's... It's written down as one of
the feats in marketing history. That's probably
the highest level that you can achieve. With
one event, you can earn so much attention and
you're getting the money back almost right away
as a branding event. Right. And the attention,
and I think they did this in 2012, right? So
that's kind of when streaming and when YouTube
really started to kick off. they really benefited
from having that video on YouTube or on all kinds
of media platforms over the course of the next,
so far, 13 years, but probably way longer because
we watched it this year, right? And we might
re -watch it and other people might pick it up
who were born before this time and still have
marketing effects for Red Bull. So people will
continue to watch. They will continue to roll
money inside just because of this video is still
online. And since then, they have had a very
heavy digital strategy, putting everything online,
on YouTube, on social media, have their own TV,
have their own media house. And this is probably
also the definitive moment that Mattis has realized
that, oh, creating my own content is the way
to go. I cannot just be putting my name on a
sponsorship. I need to be the owner of this content.
Or giving money to agencies to advertise for
you. Yeah. So that is the, I guess, the most
famous extreme sport that... Red Bull did. And
most of the friends, even if you're not a Red
Bull fan, if I were to ask you what event you
remember from Red Bull, I think most people will
answer this. Answer this, John. Yeah, definitely.
Here's the thing. There is another extreme sport
that's kind of... interesting cute but it discontinued
but i somehow weirdly had the opportunity to
see it in 2016 interesting cute i like this description
it is it is like flying very small cessna planes
through uh two poles in a water and the race
is called the red bull air race world championship
so it's like f1 but only it's with small planes
and you define a straight line to fly and you
do a little stunt are they racing each other
or just like it's scored on the stunt you you
complete you get a score on the stunt you're
not racing each other otherwise it'll be a little
too crazy that's like gymnastic but with plane
crashes that's scary i don't want that so i went
to create this like the competition yeah they
they create they created a lot of those um like
the Red Bull Flugtag. So that's another thing.
So Flugtag is where you make your own airplanes,
airplaneable objects. And then you fly yourself
off a cliff and then see how far everyone goes.
But for fun. But more for fun. More for fun.
It's like your paper mache project with your
dad. That's right. interestingly because you
mentioned why do they sponsor uh extreme sports
why do they create all these events for the same
reason right if you can't sponsor an existing
event create one and Like we get ROI, yeah. It's
the amateur -built, human -powered flying machine
competition that is held worldwide. Just so much
joy. That's a way better way to put it. Well,
thanks to the AI agent who researched for me
who summed it up perfectly. Amateur -built, human
-powered flying machine competition held worldwide.
Yeah, I'm sure I've seen clips of it in YouTube
and various social media. So I'm sure most people
have swiped onto one of these videos and just...
Decided not to leave for a while. But if you
were to watch other extreme sports that it sponsored,
most of the names are quite scary and really
quite extreme. For example, the Red Bull Rampage,
which is the free ride mountain biking event.
Red Bull X Fighters free motocross series. And
cliff diving, joyride, global breakdancing competition.
Ooh, huge fan of the BC one. I started watching.
watching bc1 breakdance championship when i was
in high school my life has really quite been
dominated by red bull since high school my my
one of my favorite hip -hop dancer today is a
red bull sponsored dancer kyoka from osaka japan
she's so great the global rally cross king of
the year which is the kite surfing competition
a bunch of other things and okay moving on but
they do really like all of these i'm imagining
i haven't seen the video that came out of some
of these sports but i'm just imagining like the
blood pressure that you want yeah you just the
adrenaline and stuff and you just can't turn
away from these videos once you click onto one
of them you're at the edge of i want to watch
it and i don't want to watch it at the same time
yeah i want to i want to watch it I'm always
at the edge of I want to cover my eyes right
now. Some of the mountain biking competitions,
I don't think that's biking downward sloping.
That's just falling downward sloping. But it's
also because they have a media house, they make
the angles. I realized after watching so many
shows. With Insta360? Callback. They do make
the angles quite steep. they do interesting stuff
with the setup to make it look very first point
of first person point of view. Right. Right.
Right. So I think this attributes to them having
their own media production company and they know
how to produce these content, especially after
different like years of trials and errors with
extreme sports. Right. Yeah. So they have probably
perfected the extreme sport media production.
Yeah, that's right. With Insta. No, they did
not give us any money for advertising. So, yeah,
the next bit will be music and culture. They
have. music festivals that's a less known one
music and culture music academy remember the
last time we watched red bull on youtube there
is a spanish rapping channel yes on it yes so
that is okay i'm gonna slaughter this name it's
called red bull batalla de los gallos as i probably
slaughter it but it's the international freestyle
rap battle competition in spanish And I think
supposedly when it says international, I'm thinking
maybe more languages, but we just happen to be
looking at it. We clicked on the one with more
audience, with more subscribers. And that one
is in Spanish. That's a less known territory.
Yeah, less known territory. And speaking of less
known territory, the last territory is what they're
moving into rapidly. They have the Red Bull.
Koo Might, which is the fighting game tournament,
Street Fighters. And they also have esports athlete
teams, Red Bull esports team. Oh, that's a natural
direction to go to these days. Yeah, absolutely.
So one thing that I did not include that is not
within the extreme sport bid is the soccer team.
Okay. Which you have. Which I've researched extensively.
Which you've researched extensively. And I will
just do a very quick comparison. Of Monster Energy
and what kind of sports that they sponsored him
before we go into your bit. The sports ownership
bit. The sports ownership bit. Yeah. That's right.
Monster Energy is a very close second in energy
drinks with Red Bull. They also have a very strong
presence in pretty much all of the segments that
Red Bull is in. In sponsorship. Yes, in sponsorship.
And in terms of the revenue, Red Bull is at $11
billion and Monster is at $7 billion. Okay, that's
really big. It's getting very close. In terms
of motorsports, your favorite again, Monster
has a very active relationship with NASCAR. Because
of its American roots. I think that's right.
And Monster also has sponsorship in Supercross,
MotoGP, Motocross of Nations, Formula Drift,
off -road racing. And in terms of action and
extreme sports, Monster has X Games. And here's
a fun one. Professional bull riders. Bow Riders.
Shouldn't Red Bull be sponsoring Bow Riders?
I know, right? Would be more fitting. Would be
more fitting. But I think this is very American
-oriented. Ah, I see. Bow Riders, yeah. I see,
yeah. There is skateboarding, surfing, and snowboarding.
A bit of each. Right. And... The most famous
one that you would know, and I also know Monster
because of this particular event, is the UFC,
the Ultimate Fighting Championship. So there
is a pretty big regional difference in terms
of their sponsorships. This is very US -focused.
And on UFC, the floor of UFC, where they're fighting
on it, it prints Monster. It's a Monster logo?
It's a Monster claw on it, yeah. And Monster
also has a lot of cultural and musical events,
but mostly very US -oriented. There's Welcome
to Rockville, Louder Than Life, none of which
I've really been to. The sponsorship style -wise,
Monster focused more on the mass market events.
Red Bull would focus more on... beyond sponsorship
and creating my own content, uh, have more distinguishing
features and want the concept to be a hundred
percent aligned with what Red Bull is. Back in
the days, it used to be Red Bull gives you wings.
Yeah. They, they actually, do they still have
that tagline? You know, it's been heard less
and less right on TV. And there is a reason why
it's been heard less and less. I found out about
this as an anecdote to Red Bull. Red Bull gives
you wings is a tagline that they used starting
in 1997. There is a change in advertising after
2014 because someone sued Red Bull in the US
that They violated the advertising rules. This
is false advertising because Red Bull doesn't
actually give you wings. What? Yeah. Did this
person win the lawsuit? Yes, this person actually
won the lawsuit. That guy added because of the
amount of caffeine that was in the drink was
very concerning. So added to false advertising.
So what the company did is Red Bull. agreed to
compensate the customers who bought Red Bull
in America between 2002 to 2014 because of the
claims above. And legal papers specify that no
proof of purchase is necessary. And you can just
claim that compensation. So anyone in the U .S.
who bought at least one can in the last 12 years
could be entitled to $10 cash. or $15 worth of
Red Bull goods. I wonder how much they lost.
I mean, if you don't need any proof, you can
just go up to Red Bull, or I'm assuming there's
a place where you can say, hey, give me $10?
Yes. Wow. Yeah, so Red Bull decided to do that,
and Red Bull gives out millions of dollars just
because of that lawsuit. That's super risky.
Yeah, here it says multi -million dollar lawsuit.
In terms of how many millions, I don't know,
but... Does that person has a point? Perhaps.
I don't know. There's so many advertisers out
there that are, it's a tagline right at the end
of the day. Yeah, it's a tagline. Yes, I agree.
But, you know, picking out loopholes in the advertising
laws. Yes, that also works. Wow. But I mean,
luckily, I think Red Bull now is less dependent
on that tagline anyways because of all their
other sponsorships. how they're associated with
sports nowadays. Yeah, nowadays. So I had a question
actually around this topic. Red Bull's whole
advertising, I guess, strategy was beyond sponsorship,
right? They started with sponsorship and then
they started owning their own competitions and
then eventually they own teams and they own the...
whole like management end to end. And the athletes.
And the athletes and the academies that kind
of own, train the athletes and grow the athletes
and the media house. Whereas, and they cost 28
% of Red Bull's annual revenue, right? That this
whole marketing spend versus Monster, which is
for the most part still sticks around with traditional
advertising plus sponsorships. That's right.
What is their portion of marketing spend? And
I sometimes during this research, I will question,
is Red Bull investing in all these extra stuff?
Because Matisse is a sports fan. Or it actually
made a lot of business sense, right? In terms
of the return on these extra billion dollars
of revenue every year. The answer for how much
Monster Beverage is investing in marketing. I
don't know whether this will meet your expectation,
but it's spending about the same level as Coca
-Cola. It's spending in marketing in terms of
revenue is about 10 to 11%. I see. It's not very
high. But here's the... The interesting question
goes on. A follow up to your question is we have
both looked at how much profit they're making,
the net profit. And it comes down to for Energy
Drink, both of them actually and somewhere between
80 % to 25 % was the amount of data that we can
find. So here comes the comparison of Red Bull
did so many things. It did so much production
and it sponsored and owned so many teams. so
many extra work it made at about the same profit
as monster well monster just put its label on
everything they sponsored everything in terms
of percentage they have the same right right
in terms of percentage so is this a good business
like well i mean if they make the same margin
then we can question but i but but also rebel
is double on like about double the size yeah
But yeah, I mean, if we said $3 billion a year
is spent on the 20 % or 30 % marketing, if you
cut it to monster levels or Coca -Cola levels,
which let's say 10 % for easiness of calculation,
that's $1 billion only. So the $2 billion that
you save every year, or you spend more than other
companies every year. How does that translate?
At least before... Mattis just passed away in
2022. He made enough money to make the company
go public, right? Oh, for sure. For sure. Way
more. Way before. But he chose not to. And I
think maybe this is his personal decision on...
Which company that IPO'd with a bunch of board
members would allow you to spend lavishly on
sports investments? No one will allow you to
do that. Right. So it sounds like... Mattis did
a fun project for himself and he wanted to stay
true to his heart. I didn't get to read his biography.
And maintain the margins at the same time. Yeah,
maintain the margins. And benefited everyone
who watches Extreme Sports. And how many shareholders
does he have? Like three. That's it, right? Yeah.
Now two. Well, now two. So even fewer people
to deliver to. So he had much more flexibility.
What kind of company do I want to build? What
kind of branding do I want to go into? I don't
have that many shareholders that is pressing
me to give any answers. And as long as I'm building
a brand that I like myself and I'm getting all
the attention, I'm very good at marketing, then
I can just do the proof of concept and I can
do it. So I think there is a lot of flexibility.
It's also at least another interesting question.
he definitely did have the cash to sustain his
own interests and his company as to growing it
to $11 billion of revenue. But had he decided
to IPO, or him and Chaleo decided to go with
the IPO route, will Red Bull be twice or three
times as much as it is today because of the fund
injections and maybe they'll go into other drink
types and whatnot. Maybe not. You know, like,
In every single one of our episodes, we always
ask the same question. Had he IPO'd before? Would
he have the same happy and fulfilling life? Or
would it be the same company? Had he IPO'd, would
he have the Fluke Talk competition that's purely
for fun but doesn't really serve a lot of purposes?
I don't know. I think it's a really fun event
to watch. It does generate a lot of traffic.
online but yeah interesting yeah okay we can
we can leave that question for later so maybe
10 episodes afterwards we'll come back to that
question and we'll have a better answer it's
for something for the audience to think about
also if you're a red bull insider please also
like tell us email us we'd love to know on to
the sports ownership yes in the beginning actually
red bull in starting the late 80s uh they actually
sponsored uh they put money into f1 as sponsors
Yeah. Where the dream starts. Woo. Yeah. And,
and obviously Matt Trish is a sports guy. After
a few years of investments, I think more than
10 years, actually, at some point he thought
about owning his own team. Right. And, and that
has to do with when you're a sponsor. And even
though you're putting in a lot of marketing money
into this team, at the end of the day, the team
makes their own decisions. And so he doesn't
have that much of a say. in the decision making
of the team. At some point, I think he wanted
more say because he's so involved. Right. And
also he became really good friends. And I don't
know the channel with Dr. Marco Helmut, who is.
if you guys do watch formula one he is kind of
the i don't know what his exact role is but he
is the the figurehead of the red bull sport the
two teams and also the academy that kind of person
we call him the spiritual leader of the yeah
i think he's like i don't know his like actual
position but like he's a decision maker basically
right their friendship developed and they decided
rather than not making decisions and just being
a sponsor, they wanted to really commit and also
try to make money at the same time. At first
there was, and they were pretty lucky. So 2004,
one of the team actually went on sale for $1.
It's called Jaguar. Oh, Jaguar. Back in the days.
And that was the one that got renamed Red Bull
Racing. Red Bull Racing. Points. Yeah. So they
acquired that. And Jaguar is obviously struggling
financially. And it wasn't just a $1 deal, obviously.
They committed a $400 million investment for
the three years afterwards. And since they probably
put in billions of dollars into this team after
owning it for... you know more than 20 years
what's shocking at that time was immediately
the year after another team went on sale i guess
it was just the time that everyone wasn't doing
well which is scuderia offertory it's called
well back then the team that went on sale is
called minority that's right and then they initially
named the team tororoso which is red bull in
italian And the team is, yeah, it's based in
Italy, obviously, but it went through several
names until it got to today's name, which is
VCARB. Visa, Cash App, Red Bull, VCARB. Yes,
VCARB. Which is very far away from Toro Rosso.
Yes, it's obviously named after its title sponsor,
Visa. But what is very interesting is through
this learning, they realized that With two teams,
you actually have a lot of synergies. Because
at first, this is pure investment. They're not
generating profit out of this. They are spending
all the $400 million, for example, over the three
years. They see this as marketing spend, just
as your sponsorship, right? But then you kind
of get to sit in as the owner and you make more
decisions. But with the two teams and with Dr.
Helmut Marko, who runs the Talent Academy, they
realized that there is synergy where you can
develop a talent from their carding days when
the kids are 13, 14 years old. You find a pool
and then eventually help them grow into. different
stages of racing, let's say. Like a junior and
a senior and you graduate and you move on to
a better team. Exactly. And so sponsoring someone
into F1, if they ever make it, it costs anywhere
between $1 .5 million to $45 million, right?
But the amount of revenue that they've managed
to get from... let's say winning a title, which
they did back in 2010 to 2013. Sebastian Vettel?
Yes. So for four years, they won the F1 championship,
which then brought in a lot of viewership and
return on their revenue and a lot of sponsorships.
And more talent wants to join the team. Exactly.
And so overall, it almost turned into a VC. company
like a pipeline pipeline these like but for for
kids who are in you know into uh we don't have
exact information on when they started to make
profit so the data that i've got every year rebel
still puts in about and this is very rough about
160 million dollars a year into rebel racing
And that's only 35 % of what they put in. The
rest comes from sponsorships and selling merchandise,
etc. Most of them likely from sponsorship. The
team itself actually only makes $10 million profit,
which is actually pretty good. A lot of teams
out there don't make any money, loses money,
especially before Netflix made Drive to Survive
that made F1 more popular. Most of the teams
are actually either owned by wealthy individuals
or are more kind of investment, not looking for
return, but looking for marketing exposure. Passion
projects for rich people. Yeah. And some marketing
exposure, of course. Or there are automotive
companies that want to have, you know, this motivate
their sales like Ferrari or Mercedes. For sure.
And so $10 million is good, right? But that's
after Red Bull puts in the $160 million of investments
every year. However, the amount of exposure the
logos get, right? And it correlates to the amount
of wins that Max Verstappen gets. Oh, of course.
Everywhere. Obviously leads to more can sales.
Oh, yes. So there's this thing where like win
on Sunday and then drink on Monday or something
like that. Broadly, folks have... estimated that
this $160 million of investments generates almost
double the marketing effect. So if you put $320,
double that, into your traditional marketing
spend, you get the same amount of exposure for
your canned sales. All of that said, it might
be just really rough estimates because you can't
really attribute a can sale to a Max Verstappen.
I was going to say you maybe can because if you
go to the Netherlands and if you were to be wearing
a Red Bull hat, maybe you get a discount just
walking into one of the convenience stores. I'm
sure there's wealthy sponsors who are like, yes,
I'll pay for Max. I'm sure. Yeah, the Orange
Army. Wow. All in all, they've learned that this
makes their marketing spend cheaper and you're
allowed to own sports companies and you grow
talent. It's a better deal. So what have they
done with this learning, right? Other than developing
talents in auto sports, they copy and pasted
this exact model, but with like five other teams
in football. Soccer, you mean? Okay, some call
it football, some call it soccer. Some call it
soccer, but Red Bull would like to call it football.
Okay, let's do football. Football, soccer. But
they also invested in the US, so Major League
Soccer. And this is where it gets super interesting.
To make this short, they replicated the model,
but rather than two teams, I'm counting. I'm
counting like five different countries, but I
think they divested in Ghana. So they have Germany,
which is currently their top team. So this is
the equivalent of Red Bull Racing. So Germany,
the team is called Leipzig. In Austria, they
have, I guess, Salzburg, which is where you went
to. also where the headquarter is at where the
headquarters at and this is their first investment
obviously and this is actually kind of a mini
feeder team but sometimes they compete with each
other and this is the austria -based team in
austria they also own a second tier team Later
on, they purchased a second tier team. Like the
RB to Red Bull. Right. So Austria, I think you
can also, a lot of fans don't like to see it
that way, but you can also position as the feeder
to the German team. Makes sense. Because the
Bundesliga, which is the German league, is a
lot bigger. It's one of the top European championships.
Gotcha. Whereas Austria is much... smaller i
guess um and so salzburg let's say that is your
toro rosso v carb and then you have your second
second team uh also in austria and then they
also invested in a new york team called metro
star which they rebranded to red bull as well
so all of these they would acquire rebrand to
rebel and make it everything make everything
red um and so in the us they acquired the New
York team in 2006. And then in Brazil, they initially
actually wanted to start their own team, didn't
work out, ended up acquiring as well. And then
they tried in Ghana, but it closed down. But
they do still have a base to get talent. So you
can see how they expanded this into more teams
and globally. And as a result, within the course
of seven years and i forgot to mention that when
they purchased the german team in leipzig it
was in the fifth tier which is the bottom tier
so this is like your carding right you managed
to within seven years make it up the ladder four
times this means you have to be the winner or
runner up in a group of at least like 16 teams
i think almost every second year wow they made
it to the top tier they even won the championship
i think once or twice since then it's that sounds
like amazing sounds like their f1 journey too
right yeah i mean they acquired the team in f1
in 2004 and then their first championship is
2013 10 2010 and since then it's been yeah a
few times yeah so it really works out for them
this model of developing talent and acquiring
multiple teams. And in football, because there's
actually a tradition, not a tradition, but it's
quite common to trade or sell players, they profited
massively. massively from this by human trafficking
selling arbitraging on the players yeah because
they can develop someone so when you i guess
sign the contract when the players are quite
young and sponsor them you pay the sponsorship
fee but as you know with all sports stars their
value grows exponentially so you can you can
grow them have them play in your teams grow them
to their maximum like i guess purchasable value
like lewis hamilton i'm sorry to like you know
you use value objectifying objectifying soccer
players or football players um but they do really
end up selling a lot of these players a lot of
them to liverpool um at very very high values
like like in the tens of million dollars so that
business has really yielded Very good. Benefits.
And marketing. Free marketing. Free marketing.
Yeah, free marketing. So they went from sponsorship
to creating sports to running media house to
just now owning teams. And talent agency. And
being a talent agency. And all of this is to...
sell cans of drinks but but but the thing is
with with the previous investments right it's
pure like it's marketing expense whereas when
you own a sports team is no longer an expense
or less so of an expense so as someone who looks
at this from a more fmcg point of view i sometimes
challenge myself to the same question if you
want to be selling any fmcg products does that
mean That you need to be doing so many other
things, aka building up your own content, creating
your own stars, instead of selling your own products.
Selling products should be the last thing that
you do, but everything else goes beyond that,
right? With Red Bull, exactly, right? have you
seen them mentioning their cans in any of the
f1 communications no like you don't interview
max and he's like can't no right max would just
be angry the effect is there right so and it's
with every single sport they put a logo and they
make sure the logo is on the content they produce
and it just gets into people's hearts and minds
and thoughts and without actually saying they
never talked about how sugary it is or how carbonated
it is But you just buy that drink. Right. Yeah,
you buy that drink anyways. Yeah. Like the moment
that we had in Japan at the Suzuka Grand Prix,
when you walk into that 7 -Eleven, and even though
you don't want to buy that Red Bull drink, but
the moment that you saw like two pink bottles
of Red Bull, one is Tsunoda, the other one is
Max Verstappen, you're like, I'm buying this.
Yeah. Yeah. Let's get it. Yeah, let's get it.
Exactly. It's a spirit that is in those drinks
that makes you want it. I mean, there's so many
great marketing lessons from this one company
alone. Do you think that Mattis' ultimate dream
is to not do FMCG, but to create his own sports,
I don't know, like arena and universe such that
whatever he sells will sell to the audience that
they want? I don't know if it's right off the
bat, but when Red Bull... started to generate
revenue and there's enough profits to play around
with this is something he turned the company
into yeah so you do have to you do have to have
initial marketing success i don't know if you
can go into formula one or go into german football
right away in the 90s right but because of all
the success earlier on because of all the margin
and profit that was made through more traditional,
I guess, now if we think about it, advertising,
it is possible that you can own a sports team
or own multiple sports teams and generate a profit.
I really wonder, and I have this question for
you too, who do you think is the first ever athlete
that Red Bull owns that made Matisse realize
that, oh, maybe I can start owning? So my talents,
is it better? I don't think any athlete had anything
to do with it based on my research. His initial
thoughts about purchasing, whether it's Formula
One or the South Park team, they're all based
on his business connections who are in these
sports. So the team owners or happens to know
him. Right. And he's an avid like he's. crossed
paths with them before right either as a sponsor
or just as friends and he he likes sports um
and they're the one that convinced him to think
about investing because they know he has the
money too right and some of them try to convince
him that this is a good business and some of
it worked out and some of it doesn't so nascar
for example they actually had ownership stakes
didn't work out right but having two sports that
are globally super hot. And we talked about how
they cannot sponsor these sports. And that's
why they went into extreme sports. You know,
like 10 years later, 20 years later, he comes
back and say, not only can I sponsor, I can own
teams. Such a feel good story. Yeah. But also
I want, I do want to know his way of running
the football teams actually generated a lot of
hate. I think Formula One less so. People do
like Red Bull. Actually, as a company, there's
less, I guess, stigma against corporate ownership
because Formula One cars are just plastered with
commercials, right? But with football, I think
the story is a little bit different because football
clubs, a lot of them, especially in Germany,
it's owned by members or it's very much... Community
-based. Right. And so Red Bull plastering, it's...
big logo changing the name changing kind of the
history of a team in a city created so much protest
i think it's i've read that they're one of the
most hated teams out there um because of what
they've done and they played around they skirted
around a lot of football rules in different leagues
to get what they want in the end yeah so controversial
controversial but business -wise successful.
That's the story of Austria Red Bull. The story
of Austria Red Bull. Yeah. And shall we move
on? China. To the most interesting bit that most
of you probably have never heard of. But before
Linda starts, and I'll let her have a quick breath
before we dive into the next section, is a fun
fact. You can buy at least four different kinds
of Red Bulls in China. I count it like seven
or eight. On our table, we currently have three
of them and we're drinking one of it. We had
a taste test before. In China, there is another
interesting company that had a very long -standing
overlap with the TC Pharmaceuticals. This company
is fascinating. It started with a... Chinese
who worked in Thailand? So how about this? So
Chaleo is also a Chinese Thai as we've covered
before. Right. So they had crossed paths. They,
yes. Oh, I have a good one. I have a, so when
a Thai Chinese meets a Chinese Thai, what do
they say to each other? I've been waiting. Oh,
how do you know? Oh, really? Yes. Anyways, that's
not funny. Okay, we can go on. You can tell the
story now. Well, I thought for two hours just
about this joke and then it's not. Okay, it's
all right. Say it again. No, no, no. What did
they say? In my imaginary world, they very friendly
said Sawadika to each other. That's all that
I had imagined. But you guessed it, so I'm very
happy about that. Sorry. I lived in Thailand
for too long. Going back to actually the origin
of the founder, Cha Leo, he is Chinese heritage.
He moved to Thailand when he was two, but he
also had a Chinese upbringing. His dad was Chinese.
And I think there's kind of this familial aspect
of all Chinese folks. If you're brought up in
this, you know, in this heritage is that you
need to contribute to your homeland. Oh, my God.
When you are successful. Come back to the homeland.
Exactly. Like when you made it as TCP pharmaceutical
in Thailand, you should come back to your homeland
and. you know, help your village men at that
point in Hainan. Co -develop? Yeah. Well, yeah,
I think a lot of the very... And you brag about
yourself, right, too. In a large part of Southeast
Asia, there are so many Chinese business or Chinese
-Thai, Chinese -Filipino, Chinese -Indonesian,
and they tend to use that... business partnership
with China to do their initial business and succeed
and then later come back. So I think Chaleo falls
into that. Exactly. So, and I think at that point,
which is 1993, we're talking about, he already
formed this partnership with Matisse and he has
some probably dividends coming in. You bet. Yeah.
So he's going back to homeland. He's like, I
made it guys. I'm now going to help you make
it. But he didn't. He failed the first time around.
So he went back to Hainan thinking that I could
just replicate my Red Bull business model in
China. He built a factory. He didn't. Oh, he
didn't. I think he didn't. He didn't even start
with factories. The first stumbling block, the
same as Europe, is how do you even sell this
drink? How do you get the go -to market right
to begin with? China, even though... Taurine
is a Chinese traditional drinking recipe. Caffeine
is less so. And so mixing these with sugar together,
the health board was like, I'm not sure. I'm
not sure if you can sell this. So he faced a
lot of issues. He couldn't market it. The same
as how he met Mattishez, this guy who... How
about we start with his Chinese name? Yan Bing.
Yeah, that's quite easy. I know I got that one
right. I'll give you a little background of Yan
Bin. So he was born in 1954. He's about 30 years
younger than Cha Liao. And he was originally
born in a very, very poor family in Shandong
province. When he is 16, he was sent to Henan
for farm work. And still, he was very, very poor.
In 1971, a year after he was being sent to Henan,
he decided that, you know what, this is it. I'm
too poor. I have nothing to lose. I have about
$10 in total, which is 92 kuai in his pocket.
And he decided to go to Thailand. And that's
a big leap for him. Just go from Henan to Thailand.
And he went there on his own, not like Chaleo
where he's... Parents brought him. And also at
a very bad time. So he really could have just
lost his life or cannot make it back at all.
So he started working in a restaurant that is
opened by Chinese and he never complained about
work. And after he worked there for a very long
time, right around 1984, well, again, when he
hit his 30s, he decided to stay his own company,
which is... The Reinwood Group, a .k .a. Hua
Bin. A real estate development company. That's
right. Yeah, that's right. Yeah. Real estate
development and building services and a little
bit of travel and trade. That's back in the days.
So what I've researched. told me that because
they're both quite successful Chinese -type businessmen,
it's just natural that their paths come across.
And so when Yan Bing heard about Cha Leo's issue
of how he tried and failed to enter in China,
he said, let's chat about how I can help you
do this. And so there's two things that... costs
an issue for chileo to enter china so the first
thing is the repo logo was registered by a completely
irrelevant company that just happened it's out
of pure bad luck it was registered by a non -energy
energy drink obviously not uh did not exist in
china back then but just a company in zhoujiang
And so he couldn't acquire the rights. They had
no idea, right? It was for, I don't even know
what the company's, it's irrelevant to energy
drinks. It's just they use the two bowl logo.
And so HLIO cannot register. Second thing, which
is actually harder to get is the authorization
to go to market because you do need the approval
from the Ministry of Health for you to market
your drink because it has contents that are not,
very much like pre -approved in china it's not
like coca -cola where you know you're already
selling yinbing somehow being the hustler that
he is uh he i don't know if he knew these folks
or he somehow found these folks so they formed
they decided to form a jv the two of them plus
two other companies so the initial jv that was
formed in 1995 actually has four stakeholders
uh reinwood Yan Bing's company being one of them,
TCP, which is Chai Leo's company, but also two
state -owned enterprises. And that's, I mean,
that's a big fee to get state -owned enterprises
to partnership with you in a JV, right? So the
first one is called Shenzhen Zhonghao Group.
I couldn't find the English name, but Shenzhen
Zhonghao Group. And they're the logo, they went
to the original logo owners, acquired the rights.
So they solved the logo issue. The second one
is called China National Foodstuff Process Group.
And in Chinese, it's called 中国食品加工总公司. And they
solved the license issue. Exactly. So they solved
the license issue because they're state -owned
and they're tied to the state. And of course,
it's easier for them to get you the relationship,
to get you the license. Yeah. And China, obviously,
back in the days, is a very big relational, it
has a really big relational business environment,
right? So Yan Bin solved the problem for Chaleo.
And Chaleo, at that time, I guess he was benefiting
from Macha Chef's partnership. Franchise in EU.
And so he kind of replicated this model in China.
And he said, you know what? I'll provide the
expertise. I'll provide the ingredients. You
do everything that Macha Chef do for me in Thailand,
but do it in China. I give you, you know, we
signed this agreement where you can, you have
the rights to do everything on the JV's behalf.
I would, I would just do that. I would shake
their hands. Yeah. And walk away. And they were,
they did shake their hands and they have a really,
really good relationship with actually contributed
to the growth of Red Bull, right? But in Yan
Bing's perspective, he actually had to grow the
brand in China from scratch. Cha Liu did not.
put too much money or effort into this operation.
Yan Bing was the person who did the operations
in China. Run the show. Run the show. And the
first thing he did, which is, I think, for any
Chinese person, I think it's genius, is he went
on Chun Wan, which is the Chinese New Year. Super
Bowl. It's more than Super Bowl. Yes, it's a
Super Bowl equivalent. It is the CCTV four hour,
four and a half hour show that everyone watches
on New Year's Eve because every single broadcaster
in China is forced to broadcast it. No brainer.
Yeah. The viewership, and no other show can claim
this, right? The viewership, I think at some
point, is like 98 % of the population. For what
I call, it is the premium advertising slot because
you cannot not see it. This is like, this is
probably five times Super Bowl. Yeah, I think
in number wise, it is five times the Super Bowl.
So when you said people give each other Red Bull
cans for Chinese New Year, I feel like this is
where it started. Yes, that's why it is. During
Chinese New Year time. I think it was 1995 or
1996, they were on CCTV. that kicked everything
off obviously energy energy drink wasn't a thing
no it's not for years so they're still struggling
despite having a lot of money put on this so
yinbing actually at some point in time asked
chileo for more investment chileo said no so
yinbing actually had to put his uh real estate
part of his real estate in developing developments
in china as a collateral to get funding So he
puts a lot of efforts in growing Red Bull in
China. And he positioned it very differently
from Matt Tisha. So he used, for the most part,
the original formulas. And it was created for
the boot collars, for the most part. And so this
wasn't the party scene, the extreme sports. This
is just like... Even with the commercial tagline,
if you're tired, if you're sleepy, drink Red
Bull. It's very practical. It's targeted for
your average blue collar. But it's still priced
at a premium. Not as much premium, but at a premium.
Definitely more expensive than the other drinks
that's being offered in the convenience store.
I think it's twice as much than Coca -Cola. And
so things kind of... hung around for 10 years
until 2005 i think they sold 300 million bottles
which is not much 2011 12 is when things kicked
off and some people attribute it to the beijing
olympics uh when yeah so olympics was 2008 right
so i think the till effects of olympics yeah
in 2012 they hit 10 billion cans So that's a
huge milestone for them. And that made Yan Bing
the fourth richest man in China. A Red Bull drink
made this guy the fourth richest man in China.
Not real estate, but Red Bull. Yeah. In two years
after, the sales hit 20 billion Chinese yuan.
So 10 billion was Chinese yuan. So doubled in
two years and they peaked pretty much at 2015
-16 at 23 billion Chinese dollars. At that time,
guess how much market share they had in China
in terms of energy drinks? I'm going to take
a wild guess, maybe 80%. Your wild guess is exactly
on. 80 -20 always works. Yeah, it's 80 % exactly.
And it's because he also created the... Ryan
Wood also created the concept of energy drinks.
They got the first energy drink approved, right?
And so naturally there wasn't, and there wasn't
that many entrants. It wasn't that much of a
market economy for the first 10 years that they're
operating. And so 80%, but. Competition. Yes,
competition and also internal issues. So listeners,
if you've been listening carefully, you would
have maybe remember that Che Leo actually passed
away in 2012. And Red Bull China sales with Ryanwood
JV peaked at 2015, 2016. Yeah. And so at that
point, it's 20 years in the JV. And in the Chinese
JV laws, you can only have a foreign associated
JV for 20 years to own the logo rights. But here's
a... Here's the thing that I couldn't understand.
Because in their original agreement, I remember
it was a 50 -year that was written somewhere,
right? Why was it 50 years? But factually, in
Chinese law, it's only good for 20 years. Yeah.
And isn't that where the contentious point would...
What about the rest of the 30 years? What are
you going to do about it? Exactly. So you hit
the right point. And that's why we're seeing
seven cans of Red Bulls in China. Because this
dispute is very hard to justify. Obviously, Yanbin,
in business legal perspective, he made the wrong
call. When he signed the 50 -year contract, the
JV 20 -year expiration was in place, right? And
so there was enough trust, I think there was
enough trust in his relationship with Chaleo
that he figured... that this it would just go
on because with matushas like there was no challenge
you know for for years you're generating money
for me you're giving me dividends why would i
why would i care right but that's not the case
with chaleo because when he passed away how did
he split his shares of red bull it's either passed
down to her family or being passed down to the
existing company structure and in this case he
passed down to the family and he's his son if
you remember he's a eldest son originally had
2 % of the company. And Chaleo passed on the
remaining 49%, which makes the first son a 51
% shareholder of the company. Of the Austrian
Red Bull company, right? Yes, that's right. So
there's three companies, just to reiterate. There's
the Thai company called TCP. There's the Austrian
company, which is just Red Bull. Red Bull, Austria.
And then there's the Chinese JV, which is called
Red Bull Vitamin, I think, which is four companies
in a JV. The first son got 51 % of Austria. Austria,
yes. And then the second son got, I think he
got TCP in Thailand. Right, right, right. Which
at that time, Red Bull was not even... the top
of the market. It was number three. And Thailand
is a much, much smaller market in terms of energy
drinks. And he also got the whatever share that
they agreed on in the Chinese JV. I mean, it's
still generating a lot of money because it made
Yen being the fourth richest guy. So I'm assuming
the Thai shareholder, which is now his second
son, also gets his dividend. But I guess you
want more control or you want more ownership.
So that didn't fly. So 2016, he started thinking,
well, the second son started thinking. His name
is Saravut Ividya. He kind of initiated a bunch
of legal cases, lawsuits that lasted until today
that are still, I think it's a bit complicated.
But if I were to summarize in short, He tried
to sue, but obviously there's a couple of times
that Yanbing Rain Group Court wanted to appeal.
Even after going into Supreme Court, there's
kind of new evidence coming into place. So when
they first went into court, there wasn't even
the 50, he couldn't find the 50 -year agreement.
How conveniently. Yeah, he couldn't find the
50 -year agreement. And so later on, it's only,
I think, 2020 or 2019 that they supplied more
evidence around the initial agreement. And at
first, they submitted a photocopy of the 50 -year
contract, the Reinwerker bei Yanbing. But it
wasn't the original copy. It wasn't the original.
And the court went back deciding that they're...
They're going to second the original ruling,
which ruled in favor of TCP, so the Thai company.
A few months later, Yan Bing came back with the
original. And continued to appeal. Right. But
the thing is, the original was signed by not
Cha Leo, but the mom. Also very tricky. It's
just everything's tricky. And now they're going
through forensic analysis of the handwriting.
And at the same time in China, actually there's
provincial courts that also can rule kind of
within their jurisdiction. So TCP sued Yan Bing's...
ryanwood in or the jv in every single province
that they can they can think of in some province
and for the most part the provincial courts obviously
would align with the chinese supreme supreme
court but for a few provinces they were like
oh you know makes sense uh yeah we agree with
the chinese company with the chinese jv 50 years
valid and so to this day There hasn't been a
settlement. There hasn't been a final decision.
I think for the most part, we can agree that
TCP has won the case. So it's inconclusive? It's
inconclusive in terms of who really has the ownership.
But monetary -wise, Yanbing Rainwood is still
selling majority. Or selling way more of cans.
Right. And that's because TCP only started going
into the market in 2019. Do we want to talk about
the different cans? We can at least find three
different packagings. Yes. Yeah, right? Yeah.
So the one that is most common is... The yellow
gold cans? The gold cans. Yes. So the cans that
we grew up with is this can. It's the Rhinewood
can. It's the gold one. And on the bottom, it
would just say Red Bull vitamin drink. And when
TCP entered the market in 2019, they had the
exact same look, but with two different other
labels. One is, I guess you can call it like
your Coke light version. Coke Zero version. So
your Zero Caffeine version, which is just vitamin
flavored. And then the other one is not, before
it was called the Energy Drink and Rebel Energy
Drink. And now it's called the Rebel Tolerant
Drink just to tell people that it has more kick.
Ingredients. Yeah. Unless you read every single
font six. The two characters that's different
on the bottom of the can. Everything else looks
the same. Yeah. And on top of that, there is
also the blue can. Right. And this is new, actually.
This is quite new. There are at least two different
types of blue can. One is the Austrian blue can.
Right. That is being imported. Yes. And the exporter
for the Austrian can is AB InBev. This blue can...
Which looks... Not exactly like the Austrian.
So the Austrian can is like you have a diagonal
and like a line in the middle and then a diagonal
and then it's blue, silver, silver, blue, right?
We're such good fans. And then this one, it's
not like you don't have to look carefully. Yeah,
it's like an obvious copycat with just kind of
a blue square in the middle with a Red Bull logo.
Follows the color scheme, but the arrangement
is very different. So it's easier to tell the
difference with the blue can compared to the
gold cans. So I guess, listeners, if you ever
made your way to China, I would highly recommend
that you come try and taste all the Red Bulls
that you can find. In your part of the world,
it typically is a fizzy drink. Yep, carbonated.
Carbonated. And here in China, most of the Red
Bulls are... not carbonated including this blue
can that we just opened so up until today uh
for that lawsuit uh it's still ongoing so i think
the supreme court made their decision but then
the provincial stuff is ongoing sure and um and
i was really surprised when we got these cans
we got what three different types of cans from
the two different companies right and usually
the same distribution channel would only carry
one or the other. And because the Supreme Court
ruled in favor of TCP, most of the online channels
like Taobao and Jingdong, they only carry the
TCP version. And so I would imagine that there's
actually more sales in TCP, but it turns out
that they have probably not even as half as much.
So the overall sales volume, if you remember,
they peaked at 23 billion. for Yan Bing's group,
I guess the original Chinese red bull. It's still
roughly around $20 billion. The market has grown.
So for 15 years, they haven't really grown their
can or their revenue. But they haven't lost,
I guess, as much as I expected. But their share
did go down from 80 % in 2015 to about 30 -something
percent in today. And there's another about,
I think, 10 % or so that are captured by the
other Red Bull, which is TCP. 10 to 15%, I would
say. So where did the other part go, right? You
know the answer. Well, since Red Bull targets...
a high -end market, there will always be someone
who will try to monopolize the lower -end energy
drink market, which is the player that we've
discovered. So Red Bull in China is actually
mid -market. But then there's always like the
bottom. Of course, the scale, scale market. The
scale, scale market, which is called, I don't
know if they have an English name. But in China,
it's called Dong Peng Te Yin. Yeah. And they
started actually in 2003. But they really kicked
off after Red Bull started their internal battles
with each other. So they benefited from the whole
TCP versus Ren Group. Right. Yeah, a Ryan Wood
group. The whole Red Bull story has been, Chaleo
had a really good relationship with Yanbian.
Say, hey, why don't you take Red Bull to China?
We're happy to do it. And it keeps going, keeps
going until Chaleo passed away. And the second
son is like, oh, hey, I want to be in this market.
And so he came, brought TCP. And then later on,
the Austrian market is like, hello, guys, here
I come. I want to be selling here as well. Came
with AB and Bev. And all the Chinese and TCP
is like, oh, well, there are way too many versions.
we need to legitimize ourselves and continue
to try to establish. I think all of these is
trying to prove that. the energy drink market
in China is not penetrated at all. It's not penetrated
and it's kind of a free -for -all. Yeah. And
you know what Yan Bing did after his whole lawsuit
and he lost the lawsuit? He used Ryan Wood to
create another energy brand called War Horse.
Zhang Ma. Zhang Ma, which is like... Similar.
Similar in terms of like bull horse. In all this
time, we'll wear Red Bull in China's losing market
share. Dongpeng has went from 10 % to almost,
I think right now it's at 35 % of market share.
And they, rather than use a tin can, they use
plastic. And so that cuts down cost by significantly.
Like Monster to Red Bull in the States, they
double the can size, obviously. there's a group
of people that are going to go for the bigger
can. And there's no difference in terms of ingredients
fundamentally, right? Another product market
fit story, trying to find what's the best for
the everyday mass market for the Chinese audience.
Do you know what other drinks that they try to
bring into China? I think like the mineral water.
You're onto the right track. Do you remember
the name? It's a Norwegian fortified water. It's
Voss, right? Yes, it's Voss. I was so surprised.
But he licensed it? Did he license it for 50
years? You know what? I think it's worthy to
ask that question to the legal department of
Runwood. Maybe they have learned the lessons.
And besides that, Coco Vita is also another brand
that they've licensed and paired up. Where are
they originally from? Do you know? I think it
was recently incorporated in Hong Kong, but maybe
an American brand. Coco Vita. And Boss. These
are the two most noticeable brands that they've
decided to, I guess, reuse all the distribution
channels that they have, which makes sense. Last
bit. Let's just wrap up and share a bit of what
we think. could be the future for Red Bull. Wow.
No, no, no. Well, I'm not trying to like, yeah,
they're not a publicly traded company. So this
doesn't mean that, you know, like it's going
to rise and fall. But just casually, also like
this is very anthropological, just who are the
people who are still involved in this game. Right.
Let's look at the younger folks who are still
in the family and those who inherited the company
as CEOs and CFOs. So Chaleo passed. a lot of
kids 11 11 i don't know so the first son claims
51 of the company now one of the richest thai
if not the richest if not the he's he's there
he's doing well yeah second son tcp and also
collaboration with china yeah and some of the
other uh children are also doing either family
hospital, real estate, property developer, or
Red Bull social relations director. So they're
all sort of involved in the business. Matishes
also has a son and only has one son. And his
name is Mark Matishes. He was born in 1992. Yeah.
Currently holds 49 % of the Austrian Red Bull.
Right. Also doing a bunch of other things. He
has his own company. He has his own drink company.
And that company is called Thalheimer Helvasse,
which is a drink company that produces beer and
lemonade and water from Austria's oldest springs.
Interesting. So he decided not to operate Red
Bull. I think when Matisse, or the senior, passed
away, he gave... Or he allocated a three people
management team. That's right. Right. So his
son's actually not doing active management. As
a shareholder and also on the board, but the
management is being put on the CEO, CFO, and
here is... The sporting director. Yeah, and then
the last person is titled as the CEO of Corporate
Projects and Investment. Okay. So... So everything's
sports, I think. Everything's sports. And media.
Precisely. Yeah. The CEO of the beverage business
is Franz Waslawik. Okay. Sorry. Sorry if I mispronounced
that name. And so still very much involved in
the... beverage business. Alexander Kirchmeyer
is the CFO of the business, head of the beverage
business in terms of finance since 2008. And
he's also very much involved in the F1 teams
and F1 spendings. And this last person I think
is the most interesting one. His name is Oliver
Mintzlaff. He used to be served as the global
head of sales since 2018 for Red Bull. And also
previously as the boss of Red Bull Germany. Yep.
The football team. Yes. Okay. He was the CEO
of RB Leipzig. Maybe he will be doing more things
along the football and soccer. Yeah. It's so
profitable right now that I don't see why not.
So that's the three. people team that he still
have on the remaining of the Red Bull. Let's
look at the competitor, Monster. Even though
it is a publicly traded company, but they're
also facing a succession issue. Monster's current
co -founders are about 70 years old. Oh, okay.
Yeah. So I have to find out what to do with it,
but we don't know. But I mean, so Red Bull changed
management in two years, three years ago, right?
And so far, it's been holding us forward, I think,
still, with Monster. I mean, Max Verstappen is
still winning. Now is a different time. But last
year, he was doing okay. Yeah, but still, they're
definitely in the top teams. And obviously, with
the popularity of F1 growing right now with the
Hollywood movie, I can see that investment still
continue to, I guess, benefit Red Bull. The football
is benefiting Red Bull. I feel like even with
Matusha's passing away, the company is so far
in good hands. We're not seeing significant issues,
right? On the other hand, with the Chinese company,
there is definitely a significant issue in terms
of market share, in terms of having... Dongpeng
is just one of the competitors, the biggest one
eating away their revenue. So that's a very...
a much tougher situation much tougher situation
yeah and you don't have all the sports ownership
and everything they went with the monster traditional
sponsorship reseller kind of model right so I
think so my opinion is the Austrian Red Bull
will continue its trajectory for the for the
time being yeah for the time being I think it
will hold its forts with monster tech, trying
to get more out of it. But so far, what I'm seeing
in the rev share and everything, they seem to
be holding their fort. And their primary goal
is to maintain rather than, I think, grow significantly
in their market share. And that's already good
enough for profitability, right? Versus in China,
I feel like there's a bit more urgency. The competition
is very fierce and it's very chaotic. And Ryan
Wood is facing... Almost an internal fight between
like among all the license holders and also very
fierce competition from the attack from the bottom.
Yeah. And so we'll see how they will pan out.
This story has been one of my favorite stories
spanning across like eight parts of Asia. to
Europe and then coming back to Asia. And FMCG
moves very fast. And all three man CEO that we've
talked about, they're all quite inspiring in
their own ways. And maybe especially managers
that he is a marketing genius. I think all of
them. they shared same visions on how they want
to position that very brand new energy drink
in their specific market. I think the game will
continue and I really look forward to more, I
guess, innovation that is coming from Red Bull.
All three companies are doing... different types
of innovations in terms of the sponsorship, the
talents, and even the business model. And for
listeners, for you, if you ever had the chance
to come to Asia, maybe try a different type of
Red Bull. There is a building called the Ryan
Wood Center in Beijing. And if you ever get to
pass by, this place and you're just so curious
about the life of red bull maybe go to the first
floor there is a wall of photos of how Yanbin
started Red Bull in China in 1995. Fascinating.
A wall of history. I had a conference there a
long time ago and just walked into this wall
and I find it to be weird and later on it made
total sense. Yeah. Wow. Yeah. We should, I've
never been, we should go for a field trip. We
should go and we should continue to watch F1.
I will definitely. Listeners, I guess if there's
any more FM stuff cg brands or tech brands or
any company that you're interested about asia
send us a note and thank you for listening thank
you for listening