WEBVTT

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Hi listeners, today we dive into the fascinating

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story of a global powerhouse that on the surface

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appears distinctly Western, yet boasts surprising

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Asian roots. This isn't just a company that sells

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a drink, it sells a feeling, the promise that

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gives you wings. It's a brand that established

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dominance not through traditional advertising,

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but by deeply embedding itself in the worlds

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of niche sports, adrenaline junkies, athletes,

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artists, and innovators, cultivating an exceptionally

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strong and loyal following with these high -influence

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communities. Instead of just ad placements, it

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operates like a full -fledged media company,

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producing high -quality documentaries, films,

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music, magazines, and other digital content,

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often with the product subtly or even entirely

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in the background. Yes, you have guessed it right.

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We're talking about Red Bull. In this episode,

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you'll discover its humble beginnings in Asia,

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its journey to Europe, its groundbreaking marketing

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and content creation strategy, its evolution

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from sports sponsor to team owner, why you can

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find at least four different Red Bull cans in

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China, and the ongoing legal battles it faces.

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Let's dive in. Welcome back. First of all, how

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do we pick this company? Should we just recap

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that? We asked Deep Seek, I think. So after we

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recorded the Deep Seek episode, we immediately

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decided that we should record this episode. Pretty

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much. Yeah. Yeah, it was decided. This company,

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even though on the surface level, it may look

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like a non -Asian company, but it is actually

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of very heavy Asian heritage, right? Yes. Interestingly

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enough there is even a subsidiary that is registered

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in China. Yep. It's a, spoilers, joint venture.

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Joint venture. Joint venture. But it's like,

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I think even though we're talking about one company,

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we're actually talking about three companies

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today. And two -third of the three are Asian.

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Yeah. Yeah. And two -third of the companies are

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still very much operating within Asia. Very active.

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Yep. And they're fighting with each other. Yeah.

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Oh, here's another wonderful hint. We both watch

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F1. And this company is heavily related to F1.

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I think by now, you just gave it away, I think.

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What other semi -Asian companies are heavily

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associated with F1 other than Red Bull? My favorite

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driver. I don't recall when exactly I became

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a fan of Red Bull. Pan's favorite driver. Yeah.

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Well, another fun fact for the company. In 2024,

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the company, even though it only sells... energy

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drink, but it sold 12 .6 billion cans of energy

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drinks. It's almost the world population. That's

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a lot. Should we dive into the history of how

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Red Bull started? Where do we start? We start

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with the very, very first part of Red Bull. How

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was the drink created? So the company, Red Bull,

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didn't start off as a drink company at all. And

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before we dive into the company, one thing I

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want to point out, is the drink of energetic

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tea or flavored tea in Southeast Asia and even

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in the tropical part of China has been a long

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history. And if you ever visited the southern

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part of China, offering refreshing tea drinks

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is a very normal thing, especially during summertime.

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When you go back, you can still buy a lot of

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those. Our first guy, his name is... Okay, I

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will... I can try the Thai version. Go for it.

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So it's Chaleo Yuvidia. Yes, Chaleo Yuvidia.

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He was born in 1922, and he is Thai -Chinese.

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Originally in 1922, he was born in Hainan, Wenchang.

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Also known today as a province, as a village

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that produces a lot of free range chicken, like

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the Wenchang chicken. Yeah, surprisingly, he

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is the founder of the drinks recipe. Yeah, so

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if you look at the map of China, there's this

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little island on the very southern end. That's

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Hainan. That's where he's from. Yeah, that's

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where he's from. And he was also once upon a

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time, because of Red Bull, one of the richest

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men in Thailand. Also, well, I guess it doesn't

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hurt to mention he passed away already. He passed

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away in 2012. I think this number will help a

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lot in understanding some of the later half of

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the story, which Linda will show a lot, at the

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age of 89. Chaleo, just for the easiness of pronunciation,

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I'm going to address him with his first name,

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not because I'm really familiar with him. Also,

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we don't want to confuse him with his heirs later

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on in the story. Yes, yes. He worked in a pharmacy,

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and later on in 1962, Some other accounts claim

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it to be 1950s. Yeah, 56. So maybe there's a

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little discrepancy there. Somewhere around that

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10 -year period. Somewhere around that. He started

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his own pharmaceuticals. And that pharmaceutical

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company is called the TC Pharmaceuticals. We'll

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just call it TCP for short later. Which is what

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they still call it up to today. Yes, that's right.

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In 1970s, he came up with this, drink that has

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water, caffeine, sugar, and some other functional

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materials like vitamin B or taurine in this drink

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and call it a crating thing. There you go. I

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think, I don't know. I'm trying. That's fantastic.

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But did you know how he got the idea from? Here's

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what I found. And I'm just trying to put all

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the ideas together. Okay. Going back a little

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further. Kratting Dang isn't the first. It just

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sounds like swearing so much. Why don't we call

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it Red Bull Thailand? Because for our audiences,

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Kratting is India bison, which is bull. And Dang

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is red. So it's the reverse of Red Bull. So where

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did he get that idea? Before the 70s, there is

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another energy drink that is originated in Japan.

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And even in Japan today, you can still find it

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in 7 -Eleven. Yeah. And that energy drink is

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called Lipovitin D. Yep, Lipovitin. It's a small

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brown bottle that is 150 mils that is mostly

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vitamin B and taurine and maybe some vitamin

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C. This is the very first model of the energy

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drink in Asia. And the primary user and audience

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for this drink has been labor duty workers, truck

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drivers. Yeah, your typical blue collar folks

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who actually work pretty long hours. And I think

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it got popular in Japan actually after the post

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-war period because a lot of folks need to work

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long hours during that period. was brought by

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a company in Japan all the way to Thailand. He

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had that and he tried... Well, I think he saw

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his workers, his pharmaceutical employees having

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a drink. And then he realized, yeah, there's

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a business opportunity. Since then, he decided

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to put aside the pharmacy business and went all

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in for this energy drink. And this energy drink,

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he named it KD. Red Bull. Red Bull, yes. Red

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Bull Thailand. That's sort of officially the

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first chapter of Chaleo. He found the recipe

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and polished it and made it happen in Thailand.

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But the only difference between the version that

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he created versus the one in Japan is the Japan

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energy drink is... more of a premium drink. If

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he wants to localize that product in the Thai

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market, then he would have to make it a lot cheaper,

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which is exactly what he did for the Thai market.

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Okay. So one other thing I found during research

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is that his pharmaceutical business actually...

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Wasn't exactly what we think of as pharmaceuticals

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today, where you research and develop a drug

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over the course of, you know, 10 to 20 years,

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and then you sell them with some kind of 20 year

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protection patent. His pharmaceutical company

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back in the days was purely kind of a shop front

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where he's a middleman. So he got some, you know,

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no name brands manufactured somewhere, and then

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he does some marketing and then sells it. And

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that model quickly has margins eroding. So when

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he discovered, he was actually on his way to

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find something new for the company to make more

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profit on while his margins in the pharmaceutical

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business are suffering. And so he came across

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this. And so it wasn't just like... A random,

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yeah, he was looking for a business opportunity.

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Yeah, he was looking for a high margin mass market

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opportunity. And nothing is better than an energy

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drink that doesn't hurt you anything, but just

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bring you to a good spirit. In 1982, here comes

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the Austrian guy. The Austrian guy, his name

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is called Dietrich Markwirt Eberhardt. That was

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really good. That is really difficult. Shall

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we just call him Mattishes? Mattishes. Or can

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we just call him Matt? Let's call him Mattishes.

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Yeah, Mattishes. Mattishes, okay. At the time,

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in the 80s, he was working as a brand manager

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for... BlendX, right? Yes, for BlendX. And BlendX

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later got acquired by Procter & Gamble. And before

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BlendX, he was working for Unilever. So he basically

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worked for like the two top FMCG. Exactly. The

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top brands in FMCG. So he was visiting Asia and

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he was very jet lagged. While he was in Thailand,

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he bought the Thai Red Bull. And surprisingly,

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it was able to make him feel very energized and

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it doesn't feel the jet lag anymore. So he remembered

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that drink. And since then on, he had planted

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the idea that maybe I should do something with

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it. Our match is he was born in 1944. So by 1982,

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he is 38. So just write about the time that you

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have your midlife crisis. Ideas of taking something

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on your own with your expertise. Exactly. So

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he was on a business trip with his current company

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and he had a drink and he thought it was amazing.

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At that point, he was like, I must bring it back

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to Europe. Working as someone with extensive

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experience in marketing, you would have an eye

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to find good consumer products. There's potential

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in cutting thing. That's right. Okay. There's

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not so much the name, but definitely the dream.

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So how did he convince Charleo to... Partner

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with him or give him the brand. Yeah, you see,

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that's interesting. So Matic was very interested

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in franchising the brand, Red Bull. So he decided

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to find Chaleo and have a discussion in 1982

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in the same year. Since 82 to 84, the two of

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them had rounds and rounds of discussions. And

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finally, two years afterwards. they jointly created

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a sort of a joint venture company. Yeah. That

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is registered in Austria, in Salzburg, with Chaleo

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holding 49 % of the company and Mattis is holding

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the other 49 % of the company. And then the 2

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% is held by Chaleo's first son. Yeah. Whose

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name is Chalarm. anyways his firstborn son um

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and this is just because you should never form

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a jv with uh form a jv with a 50 50 ownership

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because you'll never when you don't agree on

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things uh it's a hassle so the 51 49 ownership

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was done on purpose right basically yeah um so

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it took them two years to figure this business

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model out i think at some point i remember uh

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reading that so chaleo was like if you want this

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brand to be sold in europe why don't you just

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buy a bunch from thailand ship it to europe and

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you can sell it there right and i think matushas

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wants a little bit more than that he wants a

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bit more ownership and he wants also chaleo to

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be partnering with him and so that's what eventually

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took two years he just came to the company and

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he came to chaleo and said hey, I want to be

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distributing this drink and remaking this in

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Europe. Do you allow me to do that? And when

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I do that, I don't want to just resell it. I

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want to be incorporating this with you. Let's

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do this together. Yeah. I think it's very hard

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to say no to that kind of deal. Like it's still

00:14:11.879 --> 00:14:14.940
having you as a part of the business. Right.

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You'll be overseeing and doing this with me.

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So I think it's a... quite fair way of operating

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but but also getting chileo to put up 50 500k

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yeah of his own money in a country that he's

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not familiar with means that Throughout the two

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years, Matusias has done some good convincing

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as to his capabilities in marketing, which he

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has later proven more than right. Yeah, I know.

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Such a good investment. Such a good investment.

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500K compared to today. That's, I don't know

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how many times it has... 10 billion. 10 billions

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of dollars. Yeah, very good investment. Yeah.

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So what did he do after he brought the drink

00:14:53.399 --> 00:14:58.899
to Austria? Right. So... The primary purpose

00:14:58.899 --> 00:15:02.360
of starting this business in Austria is to be

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able to distribute or to recreate this drink

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for the European audience. Yeah. And to be able

00:15:08.580 --> 00:15:11.200
to distribute this to the audience. As a drink

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company, your goal is to sell as many drinks

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as possible. But you just have to make that product

00:15:16.980 --> 00:15:19.940
be very fitting to the local audience. Yeah.

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So definitely don't name it Something that most

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people can't pronounce. Selling this in Austria,

00:15:25.860 --> 00:15:28.120
that's not gonna, yeah. Yeah, so the first thing

00:15:28.120 --> 00:15:32.000
he did is renaming the brand. Right. What he

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did, what Mattis just did when he went back to

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the EU is he decided that Red Bull should be

00:15:41.100 --> 00:15:44.320
a carbonated drink. It should not be a still

00:15:44.320 --> 00:15:49.100
condensed shot. I agree with him. We just had

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the still condensed shot just now. Yeah, out

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of the research, we actually bought a few bottles

00:15:55.960 --> 00:15:58.620
of Red Bull because it has been a very long day

00:15:58.620 --> 00:16:01.299
for both of us. And we are sitting down in a

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very hot summer day in Beijing. Drinking non

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-carbonated Red Bull. Yeah, it's a bit weird.

00:16:07.039 --> 00:16:12.720
And second is changing the size. The original

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Lipovitin D, the energy drink, is 150 ml and

00:16:16.460 --> 00:16:20.809
in a brown glass bottle. And this drink, typically,

00:16:20.870 --> 00:16:23.029
if you buy it, back in the days, it means high

00:16:23.029 --> 00:16:26.210
quality, high -end premium drink. And Mattishes

00:16:26.210 --> 00:16:31.490
changes that into a 250 -milliliter aluminum

00:16:31.490 --> 00:16:35.649
can. And it was sold, and I was quite shocked

00:16:35.649 --> 00:16:39.809
by the price, at $2. Right. When it was first

00:16:39.809 --> 00:16:42.350
introduced to the ski resort. This is in the

00:16:42.350 --> 00:16:45.879
80s, right? This is in the 80s, $2. Is a lot.

00:16:46.000 --> 00:16:48.460
In comparison to a Coca -Cola, which is about

00:16:48.460 --> 00:16:52.139
50 cents. Yes. A Coca -Cola was also larger than

00:16:52.139 --> 00:16:55.279
that. A Coca -Cola is 12 ounce, which is 350

00:16:55.279 --> 00:16:59.679
mil. And it was only sold at 50 cent to 75 cent

00:16:59.679 --> 00:17:02.620
at the time. So in hindsight, it's actually pretty

00:17:02.620 --> 00:17:05.859
marketing genius, right? You raise, if you're

00:17:05.859 --> 00:17:09.880
going to raise something, raise it. more than

00:17:09.880 --> 00:17:12.039
two times the original price like don't raise

00:17:12.039 --> 00:17:15.039
it by 20 you'll not make a difference in terms

00:17:15.039 --> 00:17:17.640
of impressions that's correct but the difficult

00:17:17.640 --> 00:17:20.099
thing i think is how do you convince your audience

00:17:20.099 --> 00:17:23.240
that it is worth two dollars right right and

00:17:23.240 --> 00:17:27.000
that is the power of marketing when you create

00:17:27.000 --> 00:17:32.599
a, not just a 15, 20 % higher price drink, but

00:17:32.599 --> 00:17:35.720
a completely different drink, you almost need

00:17:35.720 --> 00:17:39.640
to reinvent the drink itself. You need to create

00:17:39.640 --> 00:17:43.200
a new category such that this category with your

00:17:43.200 --> 00:17:45.519
drink, with your price, everyone will accept

00:17:45.519 --> 00:17:50.640
that. So that was what Mattisches was aiming

00:17:50.640 --> 00:17:55.019
for when he created the new Red Bull, a premium

00:17:55.710 --> 00:17:58.990
energy drink in europe come to think of it you

00:17:58.990 --> 00:18:05.029
know and now creating a new type of drink yeah

00:18:05.029 --> 00:18:08.970
is quite a risky thing to do it is quite a it's

00:18:08.970 --> 00:18:11.529
very risky also i did a okay so for those of

00:18:11.529 --> 00:18:15.329
you just a little blurb on fmcgs in general what

00:18:15.329 --> 00:18:18.369
is an energy drink if you look at the ingredient

00:18:18.369 --> 00:18:22.650
list uh most energy drinks would have a couple

00:18:22.650 --> 00:18:26.420
components besides water right There is vitamin

00:18:26.420 --> 00:18:31.059
B, there is taurine, which is this amino acid

00:18:31.059 --> 00:18:35.190
that humans can... can make ourselves, but we

00:18:35.190 --> 00:18:38.529
may or may not need them every day. It's semi

00:18:38.529 --> 00:18:41.269
-essential. We will not die if we don't have

00:18:41.269 --> 00:18:43.630
enough taurine. And there are still a lot of

00:18:43.630 --> 00:18:46.029
inconclusive studies about this particular ingredient.

00:18:46.269 --> 00:18:49.910
The other ingredient is caffeine. Most of the

00:18:49.910 --> 00:18:53.309
energy drink bands are from pairing taurine with

00:18:53.309 --> 00:18:56.430
caffeine because most of the FDAs would think

00:18:56.430 --> 00:18:59.369
that this is a very over -pairing pair and could

00:18:59.369 --> 00:19:02.349
have long -term health effects on people. Really?

00:19:02.509 --> 00:19:05.539
Yeah. Yeah, you're pairing both of those. And

00:19:05.539 --> 00:19:09.440
especially for kids, for younger people, this

00:19:09.440 --> 00:19:13.359
could be potentially dangerous. That's interesting

00:19:13.359 --> 00:19:17.799
because we drink coffee every day. And then taurine

00:19:17.799 --> 00:19:21.200
in traditional Chinese medicine is also a very

00:19:21.200 --> 00:19:25.000
common ingredient that barely has any medicinal

00:19:25.000 --> 00:19:28.700
effects. But mixing the two is not cool with

00:19:28.700 --> 00:19:31.319
most government health organizations out there.

00:19:31.660 --> 00:19:33.839
Typically in FMCG, you would have the alcoholic

00:19:33.839 --> 00:19:36.539
drinks and non -alcoholic drinks. If you look

00:19:36.539 --> 00:19:40.000
at the recent reports, you can find out in non

00:19:40.000 --> 00:19:42.279
-alcoholic drinks, there are two specific types

00:19:42.279 --> 00:19:46.940
that are still growing quite rapidly. One, obviously,

00:19:46.940 --> 00:19:49.660
is the red energy drink. Okay. Obviously. What's

00:19:49.660 --> 00:19:52.599
the other one? The other one is fortified water.

00:19:52.920 --> 00:19:57.319
Fortified with like vitamins? Minerals. If it's

00:19:57.319 --> 00:20:01.299
from a purified region, if it's from a good spring,

00:20:01.779 --> 00:20:07.599
Mattis' son, Mark, actually has a purified water

00:20:07.599 --> 00:20:11.079
line. And the company that you will mention later,

00:20:11.160 --> 00:20:13.420
the Chinese company, also has a purified water

00:20:13.420 --> 00:20:16.859
line. And all of these are... trying to tailor

00:20:16.859 --> 00:20:20.880
to the consumer's demand. It's just fancy bottled

00:20:20.880 --> 00:20:24.440
water, no? Well, all of the trends are coming

00:20:24.440 --> 00:20:27.420
from younger folks' needs these days are no longer

00:20:27.420 --> 00:20:29.779
like very sugary, very diversified, but they

00:20:29.779 --> 00:20:33.319
want clean and functional drinks. Hence the 45

00:20:33.319 --> 00:20:35.670
water and energy drinks. Anyways. Interesting.

00:20:35.809 --> 00:20:39.529
Okay. Going back to 1980s. Yeah. He, Matt Hitches

00:20:39.529 --> 00:20:41.789
brought this back to Austria. He made a bunch

00:20:41.789 --> 00:20:44.289
of change to the ingredients and he raised the

00:20:44.289 --> 00:20:47.109
price. He raised the price. If you raise the

00:20:47.109 --> 00:20:49.069
price, then you will have to find ways to justify,

00:20:49.089 --> 00:20:52.849
to tell the stories of why this is worth his

00:20:52.849 --> 00:20:56.109
price. And then obviously as a marketing professional,

00:20:56.430 --> 00:20:58.609
this wouldn't be so hard. So he tried a few things

00:20:58.609 --> 00:21:02.309
and some ended quite well. And some, when you

00:21:02.309 --> 00:21:05.420
look back, You're like, I don't understand why

00:21:05.420 --> 00:21:08.460
you did that before. But it's a portfolio effect

00:21:08.460 --> 00:21:10.819
as long as one of them or two of them works out.

00:21:11.099 --> 00:21:13.119
That's exactly right. So what did you try? If

00:21:13.119 --> 00:21:15.700
you look at the photos that I put in my note.

00:21:16.019 --> 00:21:17.660
I'm not supposed to, I think I'm not supposed

00:21:17.660 --> 00:21:20.460
to sneak into your notes. We decided not to sneak

00:21:20.460 --> 00:21:23.400
into each other's notes. We decided to start

00:21:23.400 --> 00:21:26.819
it with two locations specifically. One is college

00:21:26.819 --> 00:21:29.369
campus and then the other one is bars. Did you

00:21:29.369 --> 00:21:33.430
get that? But besides the ski resorts and so

00:21:33.430 --> 00:21:36.170
on, we'll start with the both of those. One specific

00:21:36.170 --> 00:21:40.349
carrier of advertising is called the MET, the

00:21:40.349 --> 00:21:44.990
Red Bull Mobile Energy Team. It's basically the

00:21:44.990 --> 00:21:49.670
MET. It's a different MET. A program where college

00:21:49.670 --> 00:21:53.289
students can promote Red Bull at various events

00:21:53.289 --> 00:21:58.500
and locations. You can even find some of the

00:21:58.500 --> 00:22:02.960
Red Bull Mini Cooper cars with the Red Bull cans

00:22:02.960 --> 00:22:05.859
on top of it. Yeah, I saw a photo of that. Normally,

00:22:06.380 --> 00:22:08.059
if you were to have a Red Bull college campus

00:22:08.059 --> 00:22:11.619
kind of event, it's very easy to find the automobile

00:22:11.619 --> 00:22:14.400
just around it. Actually, in our F1 race in Japan,

00:22:14.640 --> 00:22:19.759
we saw one. Okay. I took a photo with it. Oh,

00:22:19.859 --> 00:22:22.359
right. Yeah, yeah, yeah. They still exist today.

00:22:22.680 --> 00:22:27.019
Yeah. So that is a Red Bull vehicle pairing up

00:22:27.019 --> 00:22:30.539
with the MET mobile energy team. And they just

00:22:30.539 --> 00:22:32.579
go around the campus. They go to all of the places

00:22:32.579 --> 00:22:34.920
where the Red Bull event is at. It's very photogenic.

00:22:35.039 --> 00:22:37.500
You take a photo of it. Like social media passes

00:22:37.500 --> 00:22:40.740
also very fast. But this was used when it started.

00:22:40.960 --> 00:22:43.559
And I think they were giving away for free right

00:22:43.559 --> 00:22:46.200
in the beginning. Just to have interest on campus.

00:22:46.319 --> 00:22:48.700
For sure. Because no one knows what it is. Yeah.

00:22:49.150 --> 00:22:51.450
It's supposed to be helping you with focusing

00:22:51.450 --> 00:22:54.410
on your homework and drinks. Here's another thing.

00:22:54.930 --> 00:22:57.869
Focusing on your homework, really? Just get energetic.

00:22:58.170 --> 00:23:00.670
But that's a nerdy way of drinking Red Bull,

00:23:00.730 --> 00:23:02.769
but I'm sure all the Americans... I'm sure it's

00:23:02.769 --> 00:23:04.849
used for parties. I'm sure it's used for parties.

00:23:05.049 --> 00:23:10.150
Hey, I'm Asian. I drink Red Bull to cram my studies.

00:23:10.430 --> 00:23:12.930
Right. I'm sure that's used. I'm sure that's

00:23:12.930 --> 00:23:14.509
used. Oh, yeah. Plenty of Red Bulls was involved

00:23:14.509 --> 00:23:17.759
in my undergrad. Yeah. The other attempts, are

00:23:17.759 --> 00:23:19.599
you familiar? You're probably not the target

00:23:19.599 --> 00:23:22.319
audience for that, but there is a Red Bull Girls

00:23:22.319 --> 00:23:24.839
in college. I'm definitely not. You're definitely

00:23:24.839 --> 00:23:27.180
not the target audience for that. So they're

00:23:27.180 --> 00:23:30.259
basically wearing a Red Bull can -shaped bag

00:23:30.259 --> 00:23:33.019
and handing out free drinks. So that's the free

00:23:33.019 --> 00:23:35.799
drink unit that you mentioned. Got it. I've definitely

00:23:35.799 --> 00:23:39.059
seen these kind of bags when I was in college.

00:23:39.220 --> 00:23:42.200
They have a summer version of that, and it looks

00:23:42.200 --> 00:23:47.220
like this. What is that? Scandalous, right? What

00:23:47.220 --> 00:23:49.299
does that remind you of? When I first look at

00:23:49.299 --> 00:23:52.299
that, I'm like, exactly. That looks like Hooters.

00:23:52.480 --> 00:23:55.579
All right. So sex sells, I mean. Right. Yeah.

00:23:55.660 --> 00:23:57.779
Think about this. We're not the audiences, but

00:23:57.779 --> 00:24:00.559
if guys were on the other end of being offered

00:24:00.559 --> 00:24:02.579
a Red Bull with that, who can say no to that?

00:24:02.700 --> 00:24:05.259
Free Red Bull drinks. Being handed to you by

00:24:05.259 --> 00:24:08.299
hot girls. Yes. I say yes. Too good to be true.

00:24:08.440 --> 00:24:11.480
So that's a second way. And I think still a lot

00:24:11.480 --> 00:24:14.119
of the energy drinks, since they target... like

00:24:14.119 --> 00:24:16.539
the younger folks, not the underage ones, but

00:24:16.539 --> 00:24:19.059
like the college students, these kind of marketing

00:24:19.059 --> 00:24:21.740
methodologies are still being used everywhere

00:24:21.740 --> 00:24:25.619
you go to. And last bit, I think we both got

00:24:25.619 --> 00:24:29.160
the bars. Is it called Jaeger and Red Bulls?

00:24:29.519 --> 00:24:31.720
What's the mixed drink called? You can mix up

00:24:31.720 --> 00:24:34.099
quite a lot. So Red Bull wasn't traditionally,

00:24:34.140 --> 00:24:36.579
obviously, a bar drink until Mattis has made

00:24:36.579 --> 00:24:40.980
it. So he helped Red Bull. He actually worked

00:24:40.980 --> 00:24:45.500
with bars. to serve red bull and make it uh red

00:24:45.500 --> 00:24:49.299
bull plus alcohol right i don't do i did he think

00:24:49.299 --> 00:24:51.420
of this first or did coca -cola think of this

00:24:51.420 --> 00:24:54.059
maybe coca -cola okay coca -cola and whiskey

00:24:54.059 --> 00:24:56.480
and jack daniels yeah red bull and everything

00:24:56.480 --> 00:24:58.720
else red bull vodka i'm sure like people have

00:24:58.720 --> 00:25:00.759
had that before that cheap and easy keeps you

00:25:00.759 --> 00:25:03.259
very excited but in the meantime like dizzy at

00:25:03.259 --> 00:25:07.579
the same time never liked it never yeah it's

00:25:07.579 --> 00:25:10.240
weird how caffeine and alcohol doesn't mix together

00:25:10.829 --> 00:25:16.130
It just tastes very weird. Whether it's the carbonated

00:25:16.130 --> 00:25:18.269
version or the non -carbonated version, I don't

00:25:18.269 --> 00:25:22.589
like the scent of the drink. It's never a drink

00:25:22.589 --> 00:25:26.190
for scent. It's always just a drink to endure

00:25:26.190 --> 00:25:31.890
the night. It gets you drunk quick. All of these

00:25:31.890 --> 00:25:34.910
strategies are not new. These strategies are

00:25:34.910 --> 00:25:38.109
pioneered by Coca -Cola. Coca -Cola has used

00:25:38.109 --> 00:25:41.220
all of them before. So was it all smooth sailing?

00:25:41.339 --> 00:25:44.359
So he got the college kids interested and he

00:25:44.359 --> 00:25:46.759
got the bars to sell his drinks and then boom,

00:25:46.859 --> 00:25:50.259
it's everywhere. You're starting a new category

00:25:50.259 --> 00:25:54.680
of drinks that no country has ever dealt with

00:25:54.680 --> 00:25:57.880
it before. And your ingredients are also quite

00:25:57.880 --> 00:26:00.319
aggressive. Does that sound safe to you? Like

00:26:00.319 --> 00:26:05.109
for kids especially, right? Moving into the 90s,

00:26:05.150 --> 00:26:08.029
Mattis has definitely benefited from the new

00:26:08.029 --> 00:26:12.170
European Union laws that allows one company to

00:26:12.170 --> 00:26:15.910
launch across EU without any additional permissions

00:26:15.910 --> 00:26:19.349
or licenses. Okay, so he gets approved once and

00:26:19.349 --> 00:26:23.089
then it's available everywhere. It makes it easier,

00:26:23.289 --> 00:26:25.490
I guess, operational -wise. But he definitely

00:26:25.490 --> 00:26:29.930
encountered quite a lot of hurdles in that process.

00:26:30.410 --> 00:26:34.079
Red Bull was deemed to be... quite dangerous

00:26:34.079 --> 00:26:36.799
and doesn't have sufficient long -term safety

00:26:36.799 --> 00:26:40.420
data for a list of very conservative European

00:26:40.420 --> 00:26:44.019
countries. In France, Red Bull was banned for

00:26:44.019 --> 00:26:47.180
12 years. It was just completely unavailable

00:26:47.180 --> 00:26:49.059
in France. So if you want to drink Red Bull,

00:26:49.119 --> 00:26:50.779
you have to be going to another country. The

00:26:50.779 --> 00:26:54.079
reason the health authorities in France think

00:26:54.079 --> 00:26:57.980
that it was unsafe was because of the not yet

00:26:57.980 --> 00:26:59.940
understood effects of taurine and especially

00:26:59.940 --> 00:27:02.720
combined with high caffeine. So that could be

00:27:02.720 --> 00:27:06.720
very risky. In Denmark, Red Bull for a very long

00:27:06.720 --> 00:27:10.859
time was only available in pharmacies. And so

00:27:10.859 --> 00:27:13.349
is Norway. Because people couldn't understand

00:27:13.349 --> 00:27:16.450
why is this drink carrying so much taurine and

00:27:16.450 --> 00:27:18.990
caffeine, they decided to not put it in retail

00:27:18.990 --> 00:27:20.970
spaces and just put it in pharmacies. I feel

00:27:20.970 --> 00:27:24.029
like it's just the mix because the coffee has

00:27:24.029 --> 00:27:28.009
been available, right? And is it just taurine

00:27:28.009 --> 00:27:33.549
is not an ingredient that's used in non -recreational,

00:27:33.549 --> 00:27:39.900
not recreational, like only pharmacy? The FDAs

00:27:39.900 --> 00:27:42.460
in all of these countries are being quite conservative,

00:27:42.579 --> 00:27:45.599
so they don't want something that is so understudied

00:27:45.599 --> 00:27:47.720
and so high -dosed in one drink to be paired

00:27:47.720 --> 00:27:49.900
up with caffeine to be sold in a mass marketplace.

00:27:50.220 --> 00:27:53.579
Really hard to be a first mover. Yeah, it's very

00:27:53.579 --> 00:27:55.640
hard. It's not easy. And when you're starting

00:27:55.640 --> 00:27:57.059
with somewhere that's relatively conservative,

00:27:57.339 --> 00:28:00.440
it can really slow you down. In Germany, it's

00:28:00.440 --> 00:28:04.859
the same story. There isn't like a clear ban,

00:28:05.079 --> 00:28:07.880
but there is definitely a lot of regulatory challenges.

00:28:08.059 --> 00:28:12.200
The German food regulations did not like the

00:28:12.200 --> 00:28:15.460
original Red Bull and asked for reformulation

00:28:15.460 --> 00:28:19.259
for the market. Also, your hometown, Canada.

00:28:19.400 --> 00:28:24.599
Canada, yeah. So in Canada, for a very long time...

00:28:25.039 --> 00:28:26.859
Red Bull can only be sold in pharmacies too.

00:28:27.059 --> 00:28:30.759
And later on, it became a more widely populated

00:28:30.759 --> 00:28:35.519
retail store items. Yeah, that must be way long

00:28:35.519 --> 00:28:39.500
time ago. Yeah, it's in the early 90s and it

00:28:39.500 --> 00:28:44.059
lasted mostly until 2004 or 2009. That's actually

00:28:44.059 --> 00:28:47.059
a lot longer than I expected. Were you ever handed

00:28:47.059 --> 00:28:50.160
a Red Bull when you were a kid? Oh no, actually.

00:28:50.440 --> 00:28:52.259
You see, here's an interesting thing. Actually,

00:28:52.279 --> 00:28:53.940
I had a Red Bull when I was in China as a kid.

00:28:54.039 --> 00:28:56.480
That was not an issue. That was... Okay, I'll

00:28:56.480 --> 00:28:58.279
give you... I'll share my stories after this

00:28:58.279 --> 00:29:01.400
quick fact. So in Lithuania, Latvia, and Turkey,

00:29:01.720 --> 00:29:05.779
Red Bulls are not banned but restricted to be

00:29:05.779 --> 00:29:09.740
sold to minors, like the younger kids. And in

00:29:09.740 --> 00:29:12.579
China, I think... When Red Bull was first introduced,

00:29:12.759 --> 00:29:14.779
which you will share like ample amount later

00:29:14.779 --> 00:29:19.819
on, in the 90s, 1995, I vividly remember the

00:29:19.819 --> 00:29:22.579
moment that I was being handed my first Red Bull

00:29:22.579 --> 00:29:26.779
ever. I think it was when I was in elementary

00:29:26.779 --> 00:29:31.200
school. Red Bulls are very popular as a gift

00:29:31.200 --> 00:29:33.819
for Chinese New Year. And you don't send it just

00:29:33.819 --> 00:29:36.759
by a pack. You send it in a box. Do you remember

00:29:36.759 --> 00:29:42.500
that box? It was a card box of, I think, 12 cans

00:29:42.500 --> 00:29:45.059
of Red Bull in it. Right. And for some reason,

00:29:45.099 --> 00:29:50.230
my parents, they are always very... shy to give

00:29:50.230 --> 00:29:51.910
me a bottle. And then they would tell me, even

00:29:51.910 --> 00:29:53.309
though I want to drink it, I thought, oh, like

00:29:53.309 --> 00:29:55.089
this is like Coca -Cola. I want one. It's not

00:29:55.089 --> 00:29:57.190
advice for kids, right? No, it's not. No. So

00:29:57.190 --> 00:29:59.730
my parents are being very cautious of kids. It

00:29:59.730 --> 00:30:01.809
is caffeinated. And caffeinated. But I wasn't

00:30:01.809 --> 00:30:04.289
told that. I think someone else told me that,

00:30:04.329 --> 00:30:06.009
oh, like this is good for men. So I thought,

00:30:06.069 --> 00:30:08.769
oh, is it Viagra? But later on, I realized, does

00:30:08.769 --> 00:30:11.490
it have that effect? So in my mind, Red Bull

00:30:11.490 --> 00:30:14.049
has always been associated with that in my very

00:30:14.049 --> 00:30:17.109
early childhood, in my elementary school. And

00:30:17.109 --> 00:30:19.200
later did I realize, oh, oh, it's just an energy

00:30:19.200 --> 00:30:21.440
drink with some vitamins in it. I was like brand

00:30:21.440 --> 00:30:26.160
image being refreshed. So that was my very short

00:30:26.160 --> 00:30:30.180
Red Bull story. I heard that in some country

00:30:30.180 --> 00:30:33.200
because it got banned, it was associated with,

00:30:33.299 --> 00:30:35.460
you know, because the mattress was marketing

00:30:35.460 --> 00:30:39.259
it to the party scene and having it banned in

00:30:39.259 --> 00:30:42.000
some countries actually played into their favor.

00:30:42.240 --> 00:30:45.400
Not in terms of obviously sales, but people would

00:30:45.400 --> 00:30:48.470
travel across the border to get this like. outlawed

00:30:48.470 --> 00:30:52.109
drink in their country and it'd be a very rebellious

00:30:52.109 --> 00:30:55.430
and college thing to do right the the fact that

00:30:55.430 --> 00:30:58.049
it's not available only make people want it more

00:30:58.049 --> 00:31:01.890
exactly so you might have the health authorities

00:31:01.890 --> 00:31:10.190
to thank marketing methodologies did he realize

00:31:10.190 --> 00:31:12.730
this business is a good business at the beginning

00:31:12.730 --> 00:31:17.099
not really but i guess from the numbers that

00:31:17.099 --> 00:31:20.380
we can collect today, you can clearly see energy

00:31:20.380 --> 00:31:24.039
drink among all FMCG non -alcoholic drinks is

00:31:24.039 --> 00:31:28.380
such a good high profit margin business. Let's

00:31:28.380 --> 00:31:32.839
look at the margins for bottled water. Your net

00:31:32.839 --> 00:31:35.640
profit margin can go anywhere between 3 % to

00:31:35.640 --> 00:31:39.140
8%. That's for bottled water. For coffee shops,

00:31:39.460 --> 00:31:44.819
that's 5 % to 15%. For juice and ready to drink

00:31:44.819 --> 00:31:48.099
tea and ready to drink coffee and bottles, it's

00:31:48.099 --> 00:31:53.299
5 % to 12%. Premium juices, 10 % to 15%. Energy

00:31:53.299 --> 00:31:57.180
drink itself is above all of them. It goes 18

00:31:57.180 --> 00:32:01.839
% to 25%. Wow. I think that's why it's still

00:32:01.839 --> 00:32:05.579
growing rapidly. So guys, if you want to start

00:32:05.579 --> 00:32:08.019
a business, I guess in consumer FMCG, go for

00:32:08.019 --> 00:32:10.000
energy drink. In fact, we are seeing a lot of

00:32:10.000 --> 00:32:12.359
new brands these days. Do you think energy drink

00:32:12.359 --> 00:32:15.579
as a category has the highest margin across all

00:32:15.579 --> 00:32:18.079
type of drinks right now in the market because

00:32:18.079 --> 00:32:21.680
of Red Bull? Because if it wasn't for Matic's

00:32:21.680 --> 00:32:24.359
strategy, and he started this whole category

00:32:24.359 --> 00:32:28.069
to begin with in the world, right? If he decided

00:32:28.069 --> 00:32:32.170
to price the first Red Bull at, say, at a 10

00:32:32.170 --> 00:32:34.569
% premium compared to Coca -Cola. Then maybe

00:32:34.569 --> 00:32:36.990
this category wouldn't exist. Right? I know.

00:32:37.150 --> 00:32:41.730
Yeah. This was actually my conclusion. Oh, sorry.

00:32:41.970 --> 00:32:44.390
Oh, my God. Take your conclusion. We'll come

00:32:44.390 --> 00:32:47.650
back to that maybe in an hour. But he is such

00:32:47.650 --> 00:32:51.029
a fantastic marketing genius that he created

00:32:51.029 --> 00:32:57.019
a new drink category from scratch. product market

00:32:57.019 --> 00:32:59.900
fit was great and he was able to educate throughout

00:32:59.900 --> 00:33:02.779
the process like what energy drink is what functional

00:33:02.779 --> 00:33:06.220
drink is yeah so if he's if anyone were to question

00:33:06.220 --> 00:33:09.759
oh why you know mattish's what is his biggest

00:33:09.759 --> 00:33:13.099
contribution to the consumer like fmcg world

00:33:13.099 --> 00:33:16.380
i think that he created this category yeah and

00:33:16.380 --> 00:33:20.160
he made you pay more happily for it Yeah, exactly.

00:33:20.640 --> 00:33:24.559
Before Red Bull, a functional drink isn't a mass

00:33:24.559 --> 00:33:27.799
market product. Functional drink is very niche

00:33:27.799 --> 00:33:31.619
and it's very low end and it only serves blue

00:33:31.619 --> 00:33:34.440
collar. But because of Red Bull and later on

00:33:34.440 --> 00:33:37.460
with the competition with Monster, it became

00:33:37.460 --> 00:33:39.880
a more serious category and can be offered at

00:33:39.880 --> 00:33:42.579
a much higher price. Right. And all because of

00:33:42.579 --> 00:33:46.180
that. From my perspective. I think so. I totally

00:33:46.180 --> 00:33:48.940
agree with you. He created this and he made the

00:33:48.940 --> 00:33:53.099
margin height at the get -go. Even today, he

00:33:53.099 --> 00:33:56.039
outsourced the production and manufacturing bit

00:33:56.039 --> 00:33:59.359
for the drink. Oh, okay. So if I'm not good at

00:33:59.359 --> 00:34:01.519
it, I'm not going to do it. Precisely. And he

00:34:01.519 --> 00:34:03.559
would only want to focus on the marketing bit.

00:34:03.720 --> 00:34:05.640
And we'll come to how he did the marketing later

00:34:05.640 --> 00:34:09.239
and how he made all of us Red Bull fans. Right.

00:34:09.760 --> 00:34:11.800
Without even knowing. Without even knowing. Like,

00:34:11.820 --> 00:34:14.190
do I like the drink? I'm okay. Like I don't mind

00:34:14.190 --> 00:34:16.429
drinking. But we'll buy it. And are we Red Bull

00:34:16.429 --> 00:34:18.690
team fans? A hundred percent. You are. Okay.

00:34:20.429 --> 00:34:23.869
Well, I'll not reveal it because it's irrelevant,

00:34:24.190 --> 00:34:27.429
but yeah, but because of Red Bull. we have more

00:34:27.429 --> 00:34:30.289
cultural associations to Ripple than just a drink.

00:34:30.389 --> 00:34:33.550
Right. And all because of Matash's work. And

00:34:33.550 --> 00:34:35.789
also in that process, because he's so focused

00:34:35.789 --> 00:34:38.530
on branding and marketing, Matash has refused

00:34:38.530 --> 00:34:41.750
to give personal interviews and allow anything

00:34:41.750 --> 00:34:45.730
to be about him. It's more about the brand itself.

00:34:45.809 --> 00:34:48.449
Wow. So that's something that most of the brands,

00:34:48.690 --> 00:34:52.630
most of the... companies find difficult to do

00:34:52.630 --> 00:34:55.889
because the owner the ceo would maybe at some

00:34:55.889 --> 00:34:58.190
day always want that story to be about themselves

00:34:58.190 --> 00:35:01.210
instead of the brand i think it's an introvert

00:35:01.210 --> 00:35:04.210
versus extrovert ceo kind of thing like he uh

00:35:04.210 --> 00:35:07.429
they've also made their headquarter you mentioned

00:35:07.429 --> 00:35:13.050
at a very small town um and i think that's different

00:35:13.050 --> 00:35:15.769
from say if you moved your headquarter to like

00:35:16.539 --> 00:35:20.579
I don't know, London or New York, right? So you're

00:35:20.579 --> 00:35:24.719
that kind of people person. You want your face

00:35:24.719 --> 00:35:26.440
to be the brand versus you want the brand to

00:35:26.440 --> 00:35:29.039
be the brand. Right. You want the brand to be

00:35:29.039 --> 00:35:31.719
the brand. How did I find out Red Bull is from

00:35:31.719 --> 00:35:35.820
Austria? Here's a story. In 2016, oh, well, from

00:35:35.820 --> 00:35:39.840
2015 to 2016, I was very briefly working in Austria.

00:35:39.900 --> 00:35:42.980
I was working in Vienna. And my parents came

00:35:42.980 --> 00:35:46.139
to visit me. It is so far away for them to travel.

00:35:46.219 --> 00:35:48.099
I decided to bring them all the way from Vienna

00:35:48.099 --> 00:35:50.800
to Salzburg. The reason we're going to Salzburg

00:35:50.800 --> 00:35:53.559
is because, okay, this is about to be very touristy,

00:35:53.559 --> 00:35:58.699
but the Sound of Music tour starts in Salzburg.

00:35:58.800 --> 00:36:03.300
And we sign up to the bus ride to the location.

00:36:03.300 --> 00:36:08.119
And on that bus ride, we made a stop. And at

00:36:08.119 --> 00:36:11.449
that viewing point, you can see... a little leak

00:36:11.449 --> 00:36:14.730
or a little water area, and right next to it

00:36:14.730 --> 00:36:19.010
is attached with, let me show you, it looks like

00:36:19.010 --> 00:36:24.269
this. Like a round thing. Yeah, with some bull

00:36:24.269 --> 00:36:26.769
statues in front of it. Is that the Red Bull

00:36:26.769 --> 00:36:30.650
ring? That is the Red Bull headquarters. Oh,

00:36:30.650 --> 00:36:33.449
okay. And you just stare at it, and it is in

00:36:33.449 --> 00:36:35.530
the middle of nowhere in Austria. Yeah. It's

00:36:35.530 --> 00:36:38.349
like a farm, and it's just so beautiful. And

00:36:38.349 --> 00:36:40.409
you would not have associated with an energy

00:36:40.409 --> 00:36:44.010
drink or tour guide. An introvert owner. Yeah,

00:36:44.070 --> 00:36:46.389
introvert owner. The tour guide told me, oh,

00:36:46.449 --> 00:36:48.130
this is the headquarter of Red Bull. And at that

00:36:48.130 --> 00:36:50.929
point, I'm like, oh, isn't Red Bull a Chinese

00:36:50.929 --> 00:36:52.949
company? Why does it have a headquarter in Austria?

00:36:53.230 --> 00:36:56.590
I have so many question marks. And that was 10

00:36:56.590 --> 00:36:59.570
years ago. And 10 years afterwards, now I have

00:36:59.570 --> 00:37:03.909
the answer. So you've been to Red Bull headquarters

00:37:03.909 --> 00:37:08.269
without even knowing the brand is... Like one

00:37:08.269 --> 00:37:10.449
-third Austrian. Yeah, one -third Austrian. I

00:37:10.449 --> 00:37:13.590
had no idea. And I then told my mom and dad that,

00:37:13.630 --> 00:37:16.289
hey, this is the company of the energy drink

00:37:16.289 --> 00:37:18.929
that we know of. And then they just very casually

00:37:18.929 --> 00:37:20.849
said, oh, cool. And then we went on tour trips.

00:37:20.889 --> 00:37:24.309
They didn't care. Nope. And we went on to the

00:37:24.309 --> 00:37:26.929
Sound of Music tour, which turned out to be a

00:37:26.929 --> 00:37:29.989
fantastic tour. Nice. Really worth it, but it's

00:37:29.989 --> 00:37:31.929
definitely not Austrian. It is 100 % Hollywood.

00:37:34.050 --> 00:37:39.010
Okay, coming back to... Red Bull marketing schemes.

00:37:39.349 --> 00:37:44.650
And why is it so great? Going on, Mattages did

00:37:44.650 --> 00:37:48.530
not take the money that he made out of selling

00:37:48.530 --> 00:37:52.909
drinks, but reinvested all of the money. 15 years

00:37:52.909 --> 00:37:57.829
of all profits were reinvested to marketing and

00:37:57.829 --> 00:38:01.869
spreading to the growth, to strategy. All of

00:38:01.869 --> 00:38:04.309
these events, all of the profits that's made

00:38:04.309 --> 00:38:08.739
went back. to the strategic projects, the investments,

00:38:08.980 --> 00:38:13.480
and the different competitions that they sponsored

00:38:13.480 --> 00:38:16.820
and later on became the creator of the events

00:38:16.820 --> 00:38:20.360
itself. Another fun question for you, Linda.

00:38:20.500 --> 00:38:23.460
So for a company like Coca -Cola or a company

00:38:23.460 --> 00:38:26.519
like Pepsi, do you know how much in their annual

00:38:26.519 --> 00:38:30.139
revenue would they invest back in marketing or

00:38:30.139 --> 00:38:32.380
branding? What's the percentage of revenue that

00:38:32.380 --> 00:38:34.519
is being invested in branding? Cheating a little

00:38:34.519 --> 00:38:37.139
bit. I kind of roughly had a... I don't know

00:38:37.139 --> 00:38:38.960
the exact numbers, but I think they're below

00:38:38.960 --> 00:38:46.360
like 5%. That is about right. So in 2021, for

00:38:46.360 --> 00:38:49.679
Coca -Cola company, the marketing percentage

00:38:49.679 --> 00:38:55.739
of revenue is about 10 -11%. Well, that's more

00:38:55.739 --> 00:38:57.960
than I thought. Yeah, but for Pepsi is about

00:38:57.960 --> 00:39:01.590
5%. Guess how much Red Bull invested? Way, way

00:39:01.590 --> 00:39:04.710
more. Way more, yes. So like 20, 30, right? Yeah,

00:39:04.750 --> 00:39:08.809
28%, close to 30%. But also, mind you, because

00:39:08.809 --> 00:39:11.469
it is not a public company, so all of the numbers

00:39:11.469 --> 00:39:13.809
are from the open source materials that we could

00:39:13.809 --> 00:39:16.969
get. All we can know is that it is much higher

00:39:16.969 --> 00:39:19.389
than a traditional FMCG company, whether it's

00:39:19.389 --> 00:39:27.090
accurate, like 28%. Or 28 .5. 28 .5. And I would

00:39:27.090 --> 00:39:30.110
say it's... It has a much better return on every

00:39:30.110 --> 00:39:35.889
dollar spent. Yeah, they have put in a lot of

00:39:35.889 --> 00:39:40.550
money into sponsoring, started with sponsoring

00:39:40.550 --> 00:39:46.309
events. Red Bull's revenue was about 11 billion

00:39:46.309 --> 00:39:52.829
euro in 2023 and they put in about 2 .6 billion

00:39:52.829 --> 00:39:57.280
to 3 .1 billion. into marketing marketing alone

00:39:57.280 --> 00:40:01.059
so i'd say it's very fair to say red bull is

00:40:01.059 --> 00:40:05.019
just a full -on media agency or like a media

00:40:05.019 --> 00:40:07.679
powerhouse do you know roughly how they divide

00:40:07.679 --> 00:40:11.480
this three ish billion dollars is because i i

00:40:11.480 --> 00:40:14.539
think i i saw somewhere that only a hundred million

00:40:14.539 --> 00:40:18.260
which is three percent three percent of of this

00:40:18.260 --> 00:40:20.820
three billion dollars is going into your traditional

00:40:20.820 --> 00:40:24.039
like tv and digital advertising right so where

00:40:24.039 --> 00:40:27.059
does everything else go i don't have the exact

00:40:27.059 --> 00:40:31.199
breakdown But we can take a look at the series

00:40:31.199 --> 00:40:35.440
of events that they have done. We can have a

00:40:35.440 --> 00:40:38.960
mental ballpark of how much each of those would

00:40:38.960 --> 00:40:42.760
cost from high to low because there are so many

00:40:42.760 --> 00:40:45.780
of them. Yeah, Formula One. Starting with Formula

00:40:45.780 --> 00:40:48.199
One, probably the most costly one. I think so.

00:40:48.420 --> 00:40:51.760
So I think we can roughly break down their marketing

00:40:51.760 --> 00:40:55.219
budget into a few things, right? So there's obviously

00:40:55.219 --> 00:40:58.789
extreme sports sponsorship. So the pure sponsorship,

00:40:58.909 --> 00:41:01.789
not the team ownership stuff, where they sponsor

00:41:01.789 --> 00:41:06.150
at least a thousand athletes that are into extreme

00:41:06.150 --> 00:41:09.070
sports. So pretty much everyone I love watching

00:41:09.070 --> 00:41:11.610
and snowboarding. And you mentioned someone in...

00:41:11.610 --> 00:41:14.570
Ailingu. Yeah, Ailingu. And breakdance competition

00:41:14.570 --> 00:41:17.530
is still going on. Breakdance championship every

00:41:17.530 --> 00:41:21.690
year. So those sponsorship dollars, they also

00:41:21.690 --> 00:41:26.530
have sports ownership. So they invested... probably

00:41:26.530 --> 00:41:29.110
in the billion dollars into their rebel teams

00:41:29.110 --> 00:41:33.329
to rebel team invested teams and they are also

00:41:33.329 --> 00:41:36.730
in at least four countries in terms of football

00:41:36.730 --> 00:41:41.090
involvement as well as hockey and then they set

00:41:41.090 --> 00:41:44.320
up their own Media House, which creates content,

00:41:44.699 --> 00:41:47.440
right? Anything else I've missed? And then there's

00:41:47.440 --> 00:41:49.719
the 3 % traditional advertising. Right, right.

00:41:49.820 --> 00:41:51.760
Yeah, so those are the, I guess, four parts.

00:41:51.960 --> 00:41:54.099
Four main parts. Four main parts. And in the

00:41:54.099 --> 00:41:57.239
Media House, if you were to go to Red Bull Media

00:41:57.239 --> 00:42:00.119
House and click on Red Bull TV, it's a beauty.

00:42:00.239 --> 00:42:04.059
It's 24 -hour. Something is always on. 24 -hour

00:42:04.059 --> 00:42:06.380
extreme sports? 24 -hour extreme sports. You

00:42:06.380 --> 00:42:08.480
will never be bored. Something is always happening.

00:42:08.760 --> 00:42:12.260
Yeah. So maybe let's go into... other than the

00:42:12.260 --> 00:42:14.340
traditional advertising maybe let's go into them

00:42:14.340 --> 00:42:16.760
one by one how the money is made well okay first

00:42:16.760 --> 00:42:18.719
of all first of all we can talk for hours about

00:42:18.719 --> 00:42:22.099
f1 but we can model life okay what do you want

00:42:22.099 --> 00:42:25.139
to talk about first okay i have a breakdown of

00:42:25.139 --> 00:42:30.719
all the sports events that they have sponsored

00:42:30.719 --> 00:42:34.320
in or co -created in uh we're just gonna take

00:42:34.320 --> 00:42:38.030
two hours no no okay But we'll just give a quick

00:42:38.030 --> 00:42:40.110
shout to some of the most noticeable ones. So

00:42:40.110 --> 00:42:42.190
you will know the scale of these events and how

00:42:42.190 --> 00:42:44.090
many people are looking at it. And maybe you

00:42:44.090 --> 00:42:46.630
would have numbers that is like complementary

00:42:46.630 --> 00:42:51.210
to the views, you know. So I think at this point,

00:42:51.389 --> 00:42:56.710
motorsports is likely the largest. Formula One.

00:42:57.489 --> 00:43:02.090
Red Bull Racing F1. Woo! First stop in! Okay,

00:43:02.090 --> 00:43:06.349
so this is... Yes. So Red Bull owns... and operates

00:43:06.349 --> 00:43:10.869
Red Bull Racing. And these are cash app RBF1

00:43:10.869 --> 00:43:13.429
teams, so two teams. V -Carb, for short. V -Carb,

00:43:13.429 --> 00:43:18.010
sorry. V -Carb, for short. So that is the largest

00:43:18.010 --> 00:43:22.110
expenditure in motorsports. They do also have

00:43:22.110 --> 00:43:26.110
sponsorship in MotoGP and other motorsports.

00:43:26.289 --> 00:43:30.329
And they have a failed NASCAR investment. That's

00:43:30.329 --> 00:43:35.440
right. Later, NASCAR went to Monster. For sponsorship.

00:43:35.719 --> 00:43:38.480
Oh. Yeah. But pure sponsorship or team ownership?

00:43:38.719 --> 00:43:40.940
Sponsorship. Okay. Yeah. Not yet team ownership.

00:43:41.179 --> 00:43:47.280
Got it. So also in the motorsport segment, MotoGP,

00:43:47.500 --> 00:43:51.480
Red Bull KTM Factory Racing, World Rally Championship.

00:43:52.480 --> 00:43:54.760
Wow. I didn't know they were, other than the

00:43:54.760 --> 00:43:57.179
two Red Bull teams, they were into so much motorsport.

00:43:57.239 --> 00:44:02.280
Yeah. Motorsports. And second bit, the action

00:44:02.280 --> 00:44:06.010
and extreme sport. And we had a very brief discussion

00:44:06.010 --> 00:44:08.190
about that. Why did they not go for the mainstream?

00:44:08.469 --> 00:44:11.530
Why did they go for like the niche, the extreme

00:44:11.530 --> 00:44:14.010
sport? Did you know? I think I found out why.

00:44:14.550 --> 00:44:18.110
My hypothesis is that it was cheaper because

00:44:18.110 --> 00:44:21.190
football is expensive. Basketball is expensive

00:44:21.190 --> 00:44:23.449
to sponsor. Whereas back in the days, if you

00:44:23.449 --> 00:44:28.469
think like late 80s, 90s, even the early 2000s,

00:44:28.610 --> 00:44:31.590
extreme sport wasn't as popular as it is today.

00:44:31.889 --> 00:44:35.849
And so finding, A niche market is what they need

00:44:35.849 --> 00:44:40.530
to do to get the most out of your dollar of marketing.

00:44:40.869 --> 00:44:43.809
I think that's the primary reason why they went

00:44:43.809 --> 00:44:47.010
for extreme. They also want their image to be

00:44:47.010 --> 00:44:49.650
associated with that. So that's Mattish's thinking

00:44:49.650 --> 00:44:53.239
very ahead of its time. And the most mainstream

00:44:53.239 --> 00:44:55.900
sports event at the time has already been taken

00:44:55.900 --> 00:44:59.300
by Coca -Cola. Oh, of course. The Olympics. The

00:44:59.300 --> 00:45:02.139
Olympic game. Ah, okay, okay. And when did Coca

00:45:02.139 --> 00:45:05.420
-Cola sign the deal with Olympic? They started

00:45:05.420 --> 00:45:11.320
collaboration as early as, I think, 1928. Wow.

00:45:11.420 --> 00:45:13.360
Yeah, Coca -Cola holds the distinction of being

00:45:13.360 --> 00:45:15.199
the longest -standing partner for Olympic movement,

00:45:15.320 --> 00:45:18.239
supporting every edition since 1928. All right,

00:45:18.239 --> 00:45:22.340
so before Matisse was born. Yeah. Cannot compete.

00:45:22.579 --> 00:45:24.880
Yeah, it was already a thing. And Coca -Cola,

00:45:24.980 --> 00:45:28.760
Coca -Cola's logo will for a long time just show

00:45:28.760 --> 00:45:30.719
up right next to the Olympic logo. Wow. Yeah.

00:45:31.280 --> 00:45:35.360
So it's nothing groundbreaking, but managers

00:45:35.360 --> 00:45:38.619
just have to find his niche. Yeah. That was his

00:45:38.619 --> 00:45:41.860
goal. And it totally worked for the brand image.

00:45:42.159 --> 00:45:46.289
But I think it's also... it's a kind of a circle

00:45:46.289 --> 00:45:48.429
right it worked for the brand image and therefore

00:45:48.429 --> 00:45:52.369
it it benefited him and it benefited extreme

00:45:52.369 --> 00:45:54.969
sports as well i think without so many investments

00:45:54.969 --> 00:45:57.869
coming from red bull a lot of the athletes would

00:45:57.869 --> 00:46:01.690
have uh not have continued into their careers

00:46:01.690 --> 00:46:06.510
as much so so one extreme sport that we both

00:46:06.510 --> 00:46:09.289
watched online because it's on youtube it's the

00:46:09.289 --> 00:46:12.530
red bull stratos You haven't watched it yet.

00:46:12.550 --> 00:46:14.869
We're going to watch this again. You're going

00:46:14.869 --> 00:46:16.489
to watch this. I don't want to watch it anymore.

00:46:16.570 --> 00:46:18.329
I've read about this in an article way too many

00:46:18.329 --> 00:46:20.710
times and saw a lot of photos. It's too scary

00:46:20.710 --> 00:46:24.869
to watch. I'll watch it by myself. So the guy

00:46:24.869 --> 00:46:29.730
who did the Stratos jump is called Felix Baumgartner.

00:46:29.949 --> 00:46:35.070
Okay. And it is a groundbreaking free fall from

00:46:35.070 --> 00:46:39.989
the space. Yeah. One -off event. Massive sponsorship

00:46:39.989 --> 00:46:43.969
and production. Do you know what is the exit

00:46:43.969 --> 00:46:47.530
altitude of that jump? No. How far away is it

00:46:47.530 --> 00:46:50.269
from the ground level? I just saw one image and

00:46:50.269 --> 00:46:54.489
I saw the earth curvature. You know how you're

00:46:54.489 --> 00:46:57.090
in the space and you see an astronaut taking

00:46:57.090 --> 00:46:59.449
a photo, but I don't know the exact altitude.

00:46:59.630 --> 00:47:04.329
It is 39 kilometers away from the earth. Wow.

00:47:04.590 --> 00:47:09.690
What is that? 39 kilometers. 39 kilometers away

00:47:09.690 --> 00:47:13.250
from the earth. And the maximum vertical speed

00:47:13.250 --> 00:47:22.210
was 1 ,357 .6 kilometers per hour. Is that even

00:47:22.210 --> 00:47:26.449
feasible? Okay, guys, what is the maximum speed

00:47:26.449 --> 00:47:30.909
for an F1 car? 380 kilometers per hour. There

00:47:30.909 --> 00:47:34.070
you go. So you're effectively dropping onto Earth

00:47:34.070 --> 00:47:38.679
at a speed that is three times F1. crazy that's

00:47:38.679 --> 00:47:40.860
crazy that's why i don't want to watch it yeah

00:47:40.860 --> 00:47:43.219
he has protection and then on that protection

00:47:43.219 --> 00:47:46.780
it has red bull all over of course of course

00:47:46.780 --> 00:47:49.760
because you put in so much money and that reminds

00:47:49.760 --> 00:47:53.199
me of the tesla stunt of uh the car around the

00:47:53.199 --> 00:47:55.739
space right but only it has a human in it and

00:47:55.739 --> 00:47:58.920
he's a human jumping off he's willing to do it

00:47:58.920 --> 00:48:03.280
for well not for red bull for i mean his own

00:48:03.280 --> 00:48:07.179
achievements but but it's It sounds very risky,

00:48:07.280 --> 00:48:11.340
no? Yeah. And how much money did that jump materialize

00:48:11.340 --> 00:48:15.079
or did that jump yield? So a figure I had was

00:48:15.079 --> 00:48:20.280
a yielded... So overall, the project costed $50

00:48:20.280 --> 00:48:24.820
million USD for Red Bull to set up. And it's

00:48:24.820 --> 00:48:26.679
all the research, all the equipment, getting

00:48:26.679 --> 00:48:29.480
him up into space and just making sure everything

00:48:29.480 --> 00:48:34.400
is safe for this guy, right? But then immediately,

00:48:35.159 --> 00:48:37.480
not immediately after actually, they calculated

00:48:37.480 --> 00:48:40.400
the total. So it generated 50 million YouTube

00:48:40.400 --> 00:48:44.260
views for $1 for each view immediately. Then

00:48:44.260 --> 00:48:49.539
you have other effects of marketing that comes

00:48:49.539 --> 00:48:51.380
with all the reporting that goes around this

00:48:51.380 --> 00:48:54.619
project. So overall, the number is $1 .6 billion.

00:48:55.679 --> 00:49:01.300
So they generated 30 plus times what it costed

00:49:01.300 --> 00:49:04.510
them. So it's... It's written down as one of

00:49:04.510 --> 00:49:07.510
the feats in marketing history. That's probably

00:49:07.510 --> 00:49:09.510
the highest level that you can achieve. With

00:49:09.510 --> 00:49:13.690
one event, you can earn so much attention and

00:49:13.690 --> 00:49:15.690
you're getting the money back almost right away

00:49:15.690 --> 00:49:18.389
as a branding event. Right. And the attention,

00:49:18.650 --> 00:49:21.170
and I think they did this in 2012, right? So

00:49:21.170 --> 00:49:24.449
that's kind of when streaming and when YouTube

00:49:24.449 --> 00:49:29.800
really started to kick off. they really benefited

00:49:29.800 --> 00:49:33.219
from having that video on YouTube or on all kinds

00:49:33.219 --> 00:49:36.639
of media platforms over the course of the next,

00:49:36.679 --> 00:49:39.900
so far, 13 years, but probably way longer because

00:49:39.900 --> 00:49:43.159
we watched it this year, right? And we might

00:49:43.159 --> 00:49:44.900
re -watch it and other people might pick it up

00:49:44.900 --> 00:49:48.179
who were born before this time and still have

00:49:48.179 --> 00:49:50.719
marketing effects for Red Bull. So people will

00:49:50.719 --> 00:49:54.039
continue to watch. They will continue to roll

00:49:54.039 --> 00:49:57.320
money inside just because of this video is still

00:49:57.320 --> 00:50:02.019
online. And since then, they have had a very

00:50:02.019 --> 00:50:06.780
heavy digital strategy, putting everything online,

00:50:07.059 --> 00:50:10.920
on YouTube, on social media, have their own TV,

00:50:11.119 --> 00:50:14.519
have their own media house. And this is probably

00:50:14.519 --> 00:50:17.280
also the definitive moment that Mattis has realized

00:50:17.280 --> 00:50:20.719
that, oh, creating my own content is the way

00:50:20.719 --> 00:50:24.460
to go. I cannot just be putting my name on a

00:50:24.460 --> 00:50:27.820
sponsorship. I need to be the owner of this content.

00:50:27.960 --> 00:50:31.519
Or giving money to agencies to advertise for

00:50:31.519 --> 00:50:37.679
you. Yeah. So that is the, I guess, the most

00:50:37.679 --> 00:50:41.769
famous extreme sport that... Red Bull did. And

00:50:41.769 --> 00:50:45.369
most of the friends, even if you're not a Red

00:50:45.369 --> 00:50:49.090
Bull fan, if I were to ask you what event you

00:50:49.090 --> 00:50:51.449
remember from Red Bull, I think most people will

00:50:51.449 --> 00:50:54.809
answer this. Answer this, John. Yeah, definitely.

00:50:55.650 --> 00:50:58.050
Here's the thing. There is another extreme sport

00:50:58.050 --> 00:51:01.280
that's kind of... interesting cute but it discontinued

00:51:01.280 --> 00:51:03.679
but i somehow weirdly had the opportunity to

00:51:03.679 --> 00:51:07.500
see it in 2016 interesting cute i like this description

00:51:07.500 --> 00:51:11.320
it is it is like flying very small cessna planes

00:51:11.320 --> 00:51:18.340
through uh two poles in a water and the race

00:51:18.340 --> 00:51:22.019
is called the red bull air race world championship

00:51:22.019 --> 00:51:26.650
so it's like f1 but only it's with small planes

00:51:26.650 --> 00:51:31.090
and you define a straight line to fly and you

00:51:31.090 --> 00:51:33.070
do a little stunt are they racing each other

00:51:33.070 --> 00:51:35.590
or just like it's scored on the stunt you you

00:51:35.590 --> 00:51:37.590
complete you get a score on the stunt you're

00:51:37.590 --> 00:51:39.750
not racing each other otherwise it'll be a little

00:51:39.750 --> 00:51:41.630
too crazy that's like gymnastic but with plane

00:51:41.630 --> 00:51:46.090
crashes that's scary i don't want that so i went

00:51:46.090 --> 00:51:49.010
to create this like the competition yeah they

00:51:49.010 --> 00:51:52.239
they create they created a lot of those um like

00:51:52.239 --> 00:51:55.199
the Red Bull Flugtag. So that's another thing.

00:51:55.400 --> 00:51:59.320
So Flugtag is where you make your own airplanes,

00:51:59.820 --> 00:52:05.340
airplaneable objects. And then you fly yourself

00:52:05.340 --> 00:52:08.239
off a cliff and then see how far everyone goes.

00:52:08.320 --> 00:52:10.199
But for fun. But more for fun. More for fun.

00:52:10.300 --> 00:52:12.079
It's like your paper mache project with your

00:52:12.079 --> 00:52:14.880
dad. That's right. interestingly because you

00:52:14.880 --> 00:52:17.940
mentioned why do they sponsor uh extreme sports

00:52:17.940 --> 00:52:21.880
why do they create all these events for the same

00:52:21.880 --> 00:52:24.019
reason right if you can't sponsor an existing

00:52:24.019 --> 00:52:29.489
event create one and Like we get ROI, yeah. It's

00:52:29.489 --> 00:52:32.590
the amateur -built, human -powered flying machine

00:52:32.590 --> 00:52:35.349
competition that is held worldwide. Just so much

00:52:35.349 --> 00:52:36.949
joy. That's a way better way to put it. Well,

00:52:37.050 --> 00:52:39.389
thanks to the AI agent who researched for me

00:52:39.389 --> 00:52:42.489
who summed it up perfectly. Amateur -built, human

00:52:42.489 --> 00:52:44.829
-powered flying machine competition held worldwide.

00:52:45.090 --> 00:52:48.610
Yeah, I'm sure I've seen clips of it in YouTube

00:52:48.610 --> 00:52:51.949
and various social media. So I'm sure most people

00:52:51.949 --> 00:52:55.289
have swiped onto one of these videos and just...

00:52:55.719 --> 00:52:58.719
Decided not to leave for a while. But if you

00:52:58.719 --> 00:53:01.840
were to watch other extreme sports that it sponsored,

00:53:02.139 --> 00:53:05.059
most of the names are quite scary and really

00:53:05.059 --> 00:53:08.280
quite extreme. For example, the Red Bull Rampage,

00:53:08.420 --> 00:53:11.239
which is the free ride mountain biking event.

00:53:11.599 --> 00:53:16.480
Red Bull X Fighters free motocross series. And

00:53:16.480 --> 00:53:21.260
cliff diving, joyride, global breakdancing competition.

00:53:21.679 --> 00:53:25.139
Ooh, huge fan of the BC one. I started watching.

00:53:25.230 --> 00:53:29.210
watching bc1 breakdance championship when i was

00:53:29.210 --> 00:53:31.309
in high school my life has really quite been

00:53:31.309 --> 00:53:36.190
dominated by red bull since high school my my

00:53:36.190 --> 00:53:39.530
one of my favorite hip -hop dancer today is a

00:53:39.530 --> 00:53:43.289
red bull sponsored dancer kyoka from osaka japan

00:53:43.289 --> 00:53:47.730
she's so great the global rally cross king of

00:53:47.730 --> 00:53:49.849
the year which is the kite surfing competition

00:53:49.849 --> 00:53:54.289
a bunch of other things and okay moving on but

00:53:54.289 --> 00:53:57.289
they do really like all of these i'm imagining

00:53:57.289 --> 00:53:59.369
i haven't seen the video that came out of some

00:53:59.369 --> 00:54:01.750
of these sports but i'm just imagining like the

00:54:01.750 --> 00:54:03.789
blood pressure that you want yeah you just the

00:54:03.789 --> 00:54:05.929
adrenaline and stuff and you just can't turn

00:54:05.929 --> 00:54:08.690
away from these videos once you click onto one

00:54:08.690 --> 00:54:11.670
of them you're at the edge of i want to watch

00:54:11.670 --> 00:54:14.250
it and i don't want to watch it at the same time

00:54:14.250 --> 00:54:17.909
yeah i want to i want to watch it I'm always

00:54:17.909 --> 00:54:21.309
at the edge of I want to cover my eyes right

00:54:21.309 --> 00:54:23.789
now. Some of the mountain biking competitions,

00:54:24.190 --> 00:54:27.909
I don't think that's biking downward sloping.

00:54:28.230 --> 00:54:31.409
That's just falling downward sloping. But it's

00:54:31.409 --> 00:54:33.849
also because they have a media house, they make

00:54:33.849 --> 00:54:35.730
the angles. I realized after watching so many

00:54:35.730 --> 00:54:40.489
shows. With Insta360? Callback. They do make

00:54:40.489 --> 00:54:45.360
the angles quite steep. they do interesting stuff

00:54:45.360 --> 00:54:49.900
with the setup to make it look very first point

00:54:49.900 --> 00:54:51.900
of first person point of view. Right. Right.

00:54:52.079 --> 00:54:54.219
Right. So I think this attributes to them having

00:54:54.219 --> 00:54:57.460
their own media production company and they know

00:54:57.460 --> 00:55:00.800
how to produce these content, especially after

00:55:00.800 --> 00:55:04.380
different like years of trials and errors with

00:55:04.380 --> 00:55:08.659
extreme sports. Right. Yeah. So they have probably

00:55:08.659 --> 00:55:12.320
perfected the extreme sport media production.

00:55:12.679 --> 00:55:16.440
Yeah, that's right. With Insta. No, they did

00:55:16.440 --> 00:55:19.940
not give us any money for advertising. So, yeah,

00:55:20.000 --> 00:55:23.239
the next bit will be music and culture. They

00:55:23.239 --> 00:55:27.360
have. music festivals that's a less known one

00:55:27.360 --> 00:55:30.059
music and culture music academy remember the

00:55:30.059 --> 00:55:32.840
last time we watched red bull on youtube there

00:55:32.840 --> 00:55:36.739
is a spanish rapping channel yes on it yes so

00:55:36.739 --> 00:55:40.460
that is okay i'm gonna slaughter this name it's

00:55:40.460 --> 00:55:44.099
called red bull batalla de los gallos as i probably

00:55:44.099 --> 00:55:46.840
slaughter it but it's the international freestyle

00:55:46.840 --> 00:55:51.510
rap battle competition in spanish And I think

00:55:51.510 --> 00:55:53.789
supposedly when it says international, I'm thinking

00:55:53.789 --> 00:55:55.809
maybe more languages, but we just happen to be

00:55:55.809 --> 00:55:58.690
looking at it. We clicked on the one with more

00:55:58.690 --> 00:56:01.530
audience, with more subscribers. And that one

00:56:01.530 --> 00:56:06.489
is in Spanish. That's a less known territory.

00:56:06.809 --> 00:56:08.630
Yeah, less known territory. And speaking of less

00:56:08.630 --> 00:56:11.949
known territory, the last territory is what they're

00:56:11.949 --> 00:56:17.030
moving into rapidly. They have the Red Bull.

00:56:17.739 --> 00:56:20.460
Koo Might, which is the fighting game tournament,

00:56:20.760 --> 00:56:24.579
Street Fighters. And they also have esports athlete

00:56:24.579 --> 00:56:27.300
teams, Red Bull esports team. Oh, that's a natural

00:56:27.300 --> 00:56:29.780
direction to go to these days. Yeah, absolutely.

00:56:30.159 --> 00:56:35.159
So one thing that I did not include that is not

00:56:35.159 --> 00:56:38.940
within the extreme sport bid is the soccer team.

00:56:39.059 --> 00:56:42.260
Okay. Which you have. Which I've researched extensively.

00:56:42.280 --> 00:56:45.960
Which you've researched extensively. And I will

00:56:45.960 --> 00:56:50.599
just do a very quick comparison. Of Monster Energy

00:56:50.599 --> 00:56:53.559
and what kind of sports that they sponsored him

00:56:53.559 --> 00:56:57.599
before we go into your bit. The sports ownership

00:56:57.599 --> 00:56:59.699
bit. The sports ownership bit. Yeah. That's right.

00:56:59.840 --> 00:57:03.900
Monster Energy is a very close second in energy

00:57:03.900 --> 00:57:07.960
drinks with Red Bull. They also have a very strong

00:57:07.960 --> 00:57:11.360
presence in pretty much all of the segments that

00:57:11.360 --> 00:57:16.420
Red Bull is in. In sponsorship. Yes, in sponsorship.

00:57:17.309 --> 00:57:21.969
And in terms of the revenue, Red Bull is at $11

00:57:21.969 --> 00:57:28.329
billion and Monster is at $7 billion. Okay, that's

00:57:28.329 --> 00:57:31.329
really big. It's getting very close. In terms

00:57:31.329 --> 00:57:34.349
of motorsports, your favorite again, Monster

00:57:34.349 --> 00:57:38.050
has a very active relationship with NASCAR. Because

00:57:38.050 --> 00:57:40.510
of its American roots. I think that's right.

00:57:40.670 --> 00:57:46.070
And Monster also has sponsorship in Supercross,

00:57:46.349 --> 00:57:52.969
MotoGP, Motocross of Nations, Formula Drift,

00:57:53.110 --> 00:57:57.309
off -road racing. And in terms of action and

00:57:57.309 --> 00:58:02.369
extreme sports, Monster has X Games. And here's

00:58:02.369 --> 00:58:06.559
a fun one. Professional bull riders. Bow Riders.

00:58:06.940 --> 00:58:08.539
Shouldn't Red Bull be sponsoring Bow Riders?

00:58:08.539 --> 00:58:11.599
I know, right? Would be more fitting. Would be

00:58:11.599 --> 00:58:15.079
more fitting. But I think this is very American

00:58:15.079 --> 00:58:17.320
-oriented. Ah, I see. Bow Riders, yeah. I see,

00:58:17.480 --> 00:58:22.119
yeah. There is skateboarding, surfing, and snowboarding.

00:58:22.260 --> 00:58:25.860
A bit of each. Right. And... The most famous

00:58:25.860 --> 00:58:28.579
one that you would know, and I also know Monster

00:58:28.579 --> 00:58:31.360
because of this particular event, is the UFC,

00:58:31.639 --> 00:58:34.619
the Ultimate Fighting Championship. So there

00:58:34.619 --> 00:58:36.920
is a pretty big regional difference in terms

00:58:36.920 --> 00:58:39.320
of their sponsorships. This is very US -focused.

00:58:39.539 --> 00:58:43.440
And on UFC, the floor of UFC, where they're fighting

00:58:43.440 --> 00:58:45.760
on it, it prints Monster. It's a Monster logo?

00:58:45.940 --> 00:58:48.929
It's a Monster claw on it, yeah. And Monster

00:58:48.929 --> 00:58:51.170
also has a lot of cultural and musical events,

00:58:51.409 --> 00:58:53.889
but mostly very US -oriented. There's Welcome

00:58:53.889 --> 00:58:55.949
to Rockville, Louder Than Life, none of which

00:58:55.949 --> 00:58:59.949
I've really been to. The sponsorship style -wise,

00:59:00.210 --> 00:59:05.090
Monster focused more on the mass market events.

00:59:05.909 --> 00:59:10.550
Red Bull would focus more on... beyond sponsorship

00:59:10.550 --> 00:59:14.510
and creating my own content, uh, have more distinguishing

00:59:14.510 --> 00:59:18.170
features and want the concept to be a hundred

00:59:18.170 --> 00:59:22.150
percent aligned with what Red Bull is. Back in

00:59:22.150 --> 00:59:24.289
the days, it used to be Red Bull gives you wings.

00:59:24.989 --> 00:59:27.250
Yeah. They, they actually, do they still have

00:59:27.250 --> 00:59:29.849
that tagline? You know, it's been heard less

00:59:29.849 --> 00:59:33.059
and less right on TV. And there is a reason why

00:59:33.059 --> 00:59:36.320
it's been heard less and less. I found out about

00:59:36.320 --> 00:59:39.760
this as an anecdote to Red Bull. Red Bull gives

00:59:39.760 --> 00:59:43.139
you wings is a tagline that they used starting

00:59:43.139 --> 00:59:48.840
in 1997. There is a change in advertising after

00:59:48.840 --> 00:59:55.000
2014 because someone sued Red Bull in the US

00:59:55.000 --> 00:59:59.380
that They violated the advertising rules. This

00:59:59.380 --> 01:00:02.159
is false advertising because Red Bull doesn't

01:00:02.159 --> 01:00:06.719
actually give you wings. What? Yeah. Did this

01:00:06.719 --> 01:00:10.099
person win the lawsuit? Yes, this person actually

01:00:10.099 --> 01:00:13.340
won the lawsuit. That guy added because of the

01:00:13.340 --> 01:00:15.619
amount of caffeine that was in the drink was

01:00:15.619 --> 01:00:18.300
very concerning. So added to false advertising.

01:00:18.820 --> 01:00:23.719
So what the company did is Red Bull. agreed to

01:00:23.719 --> 01:00:26.599
compensate the customers who bought Red Bull

01:00:26.599 --> 01:00:30.940
in America between 2002 to 2014 because of the

01:00:30.940 --> 01:00:34.599
claims above. And legal papers specify that no

01:00:34.599 --> 01:00:37.780
proof of purchase is necessary. And you can just

01:00:37.780 --> 01:00:41.619
claim that compensation. So anyone in the U .S.

01:00:41.639 --> 01:00:45.920
who bought at least one can in the last 12 years

01:00:45.920 --> 01:00:50.170
could be entitled to $10 cash. or $15 worth of

01:00:50.170 --> 01:00:52.489
Red Bull goods. I wonder how much they lost.

01:00:53.010 --> 01:00:55.670
I mean, if you don't need any proof, you can

01:00:55.670 --> 01:00:58.150
just go up to Red Bull, or I'm assuming there's

01:00:58.150 --> 01:01:01.230
a place where you can say, hey, give me $10?

01:01:01.809 --> 01:01:04.969
Yes. Wow. Yeah, so Red Bull decided to do that,

01:01:05.030 --> 01:01:08.349
and Red Bull gives out millions of dollars just

01:01:08.349 --> 01:01:10.389
because of that lawsuit. That's super risky.

01:01:10.710 --> 01:01:12.929
Yeah, here it says multi -million dollar lawsuit.

01:01:12.989 --> 01:01:14.989
In terms of how many millions, I don't know,

01:01:15.110 --> 01:01:18.070
but... Does that person has a point? Perhaps.

01:01:19.269 --> 01:01:22.349
I don't know. There's so many advertisers out

01:01:22.349 --> 01:01:25.150
there that are, it's a tagline right at the end

01:01:25.150 --> 01:01:27.849
of the day. Yeah, it's a tagline. Yes, I agree.

01:01:27.929 --> 01:01:30.570
But, you know, picking out loopholes in the advertising

01:01:30.570 --> 01:01:33.309
laws. Yes, that also works. Wow. But I mean,

01:01:33.349 --> 01:01:35.750
luckily, I think Red Bull now is less dependent

01:01:35.750 --> 01:01:38.929
on that tagline anyways because of all their

01:01:38.929 --> 01:01:42.860
other sponsorships. how they're associated with

01:01:42.860 --> 01:01:47.139
sports nowadays. Yeah, nowadays. So I had a question

01:01:47.139 --> 01:01:50.619
actually around this topic. Red Bull's whole

01:01:50.619 --> 01:01:55.900
advertising, I guess, strategy was beyond sponsorship,

01:01:56.099 --> 01:01:59.599
right? They started with sponsorship and then

01:01:59.599 --> 01:02:02.739
they started owning their own competitions and

01:02:02.739 --> 01:02:06.539
then eventually they own teams and they own the...

01:02:08.010 --> 01:02:11.090
whole like management end to end. And the athletes.

01:02:11.210 --> 01:02:14.769
And the athletes and the academies that kind

01:02:14.769 --> 01:02:17.550
of own, train the athletes and grow the athletes

01:02:17.550 --> 01:02:22.469
and the media house. Whereas, and they cost 28

01:02:22.469 --> 01:02:25.530
% of Red Bull's annual revenue, right? That this

01:02:25.530 --> 01:02:30.789
whole marketing spend versus Monster, which is

01:02:30.789 --> 01:02:33.869
for the most part still sticks around with traditional

01:02:33.869 --> 01:02:35.969
advertising plus sponsorships. That's right.

01:02:37.070 --> 01:02:42.309
What is their portion of marketing spend? And

01:02:42.309 --> 01:02:46.170
I sometimes during this research, I will question,

01:02:46.210 --> 01:02:49.510
is Red Bull investing in all these extra stuff?

01:02:49.710 --> 01:02:54.849
Because Matisse is a sports fan. Or it actually

01:02:54.849 --> 01:02:57.349
made a lot of business sense, right? In terms

01:02:57.349 --> 01:02:59.969
of the return on these extra billion dollars

01:02:59.969 --> 01:03:02.949
of revenue every year. The answer for how much

01:03:02.949 --> 01:03:06.110
Monster Beverage is investing in marketing. I

01:03:06.110 --> 01:03:07.510
don't know whether this will meet your expectation,

01:03:07.610 --> 01:03:09.929
but it's spending about the same level as Coca

01:03:09.929 --> 01:03:12.389
-Cola. It's spending in marketing in terms of

01:03:12.389 --> 01:03:15.050
revenue is about 10 to 11%. I see. It's not very

01:03:15.050 --> 01:03:18.500
high. But here's the... The interesting question

01:03:18.500 --> 01:03:21.340
goes on. A follow up to your question is we have

01:03:21.340 --> 01:03:23.679
both looked at how much profit they're making,

01:03:23.880 --> 01:03:26.599
the net profit. And it comes down to for Energy

01:03:26.599 --> 01:03:29.099
Drink, both of them actually and somewhere between

01:03:29.099 --> 01:03:32.699
80 % to 25 % was the amount of data that we can

01:03:32.699 --> 01:03:36.300
find. So here comes the comparison of Red Bull

01:03:36.300 --> 01:03:40.340
did so many things. It did so much production

01:03:40.340 --> 01:03:45.699
and it sponsored and owned so many teams. so

01:03:45.699 --> 01:03:48.980
many extra work it made at about the same profit

01:03:48.980 --> 01:03:51.079
as monster well monster just put its label on

01:03:51.079 --> 01:03:52.719
everything they sponsored everything in terms

01:03:52.719 --> 01:03:54.739
of percentage they have the same right right

01:03:54.739 --> 01:03:57.579
in terms of percentage so is this a good business

01:03:57.579 --> 01:04:00.099
like well i mean if they make the same margin

01:04:00.099 --> 01:04:02.780
then we can question but i but but also rebel

01:04:02.780 --> 01:04:05.619
is double on like about double the size yeah

01:04:06.400 --> 01:04:11.159
But yeah, I mean, if we said $3 billion a year

01:04:11.159 --> 01:04:15.380
is spent on the 20 % or 30 % marketing, if you

01:04:15.380 --> 01:04:17.980
cut it to monster levels or Coca -Cola levels,

01:04:18.119 --> 01:04:21.380
which let's say 10 % for easiness of calculation,

01:04:21.880 --> 01:04:25.139
that's $1 billion only. So the $2 billion that

01:04:25.139 --> 01:04:28.920
you save every year, or you spend more than other

01:04:28.920 --> 01:04:32.500
companies every year. How does that translate?

01:04:32.579 --> 01:04:35.699
At least before... Mattis just passed away in

01:04:35.699 --> 01:04:40.880
2022. He made enough money to make the company

01:04:40.880 --> 01:04:43.940
go public, right? Oh, for sure. For sure. Way

01:04:43.940 --> 01:04:48.840
more. Way before. But he chose not to. And I

01:04:48.840 --> 01:04:53.219
think maybe this is his personal decision on...

01:04:54.199 --> 01:04:57.699
Which company that IPO'd with a bunch of board

01:04:57.699 --> 01:05:00.619
members would allow you to spend lavishly on

01:05:00.619 --> 01:05:01.840
sports investments? No one will allow you to

01:05:01.840 --> 01:05:06.579
do that. Right. So it sounds like... Mattis did

01:05:06.579 --> 01:05:10.320
a fun project for himself and he wanted to stay

01:05:10.320 --> 01:05:13.380
true to his heart. I didn't get to read his biography.

01:05:13.500 --> 01:05:15.380
And maintain the margins at the same time. Yeah,

01:05:15.380 --> 01:05:17.099
maintain the margins. And benefited everyone

01:05:17.099 --> 01:05:19.760
who watches Extreme Sports. And how many shareholders

01:05:19.760 --> 01:05:23.659
does he have? Like three. That's it, right? Yeah.

01:05:23.780 --> 01:05:27.059
Now two. Well, now two. So even fewer people

01:05:27.059 --> 01:05:29.920
to deliver to. So he had much more flexibility.

01:05:31.630 --> 01:05:33.570
What kind of company do I want to build? What

01:05:33.570 --> 01:05:36.389
kind of branding do I want to go into? I don't

01:05:36.389 --> 01:05:38.610
have that many shareholders that is pressing

01:05:38.610 --> 01:05:42.389
me to give any answers. And as long as I'm building

01:05:42.389 --> 01:05:44.829
a brand that I like myself and I'm getting all

01:05:44.829 --> 01:05:48.190
the attention, I'm very good at marketing, then

01:05:48.190 --> 01:05:50.489
I can just do the proof of concept and I can

01:05:50.489 --> 01:05:52.210
do it. So I think there is a lot of flexibility.

01:05:52.510 --> 01:05:55.750
It's also at least another interesting question.

01:05:56.860 --> 01:06:00.139
he definitely did have the cash to sustain his

01:06:00.139 --> 01:06:03.000
own interests and his company as to growing it

01:06:03.000 --> 01:06:08.019
to $11 billion of revenue. But had he decided

01:06:08.019 --> 01:06:11.699
to IPO, or him and Chaleo decided to go with

01:06:11.699 --> 01:06:15.659
the IPO route, will Red Bull be twice or three

01:06:15.659 --> 01:06:18.320
times as much as it is today because of the fund

01:06:18.320 --> 01:06:20.519
injections and maybe they'll go into other drink

01:06:20.519 --> 01:06:25.719
types and whatnot. Maybe not. You know, like,

01:06:26.030 --> 01:06:28.630
In every single one of our episodes, we always

01:06:28.630 --> 01:06:33.070
ask the same question. Had he IPO'd before? Would

01:06:33.070 --> 01:06:36.869
he have the same happy and fulfilling life? Or

01:06:36.869 --> 01:06:41.429
would it be the same company? Had he IPO'd, would

01:06:41.429 --> 01:06:46.409
he have the Fluke Talk competition that's purely

01:06:46.409 --> 01:06:48.769
for fun but doesn't really serve a lot of purposes?

01:06:48.949 --> 01:06:50.630
I don't know. I think it's a really fun event

01:06:50.630 --> 01:06:53.550
to watch. It does generate a lot of traffic.

01:06:53.980 --> 01:06:57.940
online but yeah interesting yeah okay we can

01:06:57.940 --> 01:06:59.579
we can leave that question for later so maybe

01:06:59.579 --> 01:07:01.820
10 episodes afterwards we'll come back to that

01:07:01.820 --> 01:07:03.539
question and we'll have a better answer it's

01:07:03.539 --> 01:07:05.019
for something for the audience to think about

01:07:05.019 --> 01:07:07.059
also if you're a red bull insider please also

01:07:07.059 --> 01:07:11.760
like tell us email us we'd love to know on to

01:07:11.760 --> 01:07:15.420
the sports ownership yes in the beginning actually

01:07:15.420 --> 01:07:19.000
red bull in starting the late 80s uh they actually

01:07:19.000 --> 01:07:23.219
sponsored uh they put money into f1 as sponsors

01:07:23.929 --> 01:07:26.750
Yeah. Where the dream starts. Woo. Yeah. And,

01:07:26.750 --> 01:07:30.250
and obviously Matt Trish is a sports guy. After

01:07:30.250 --> 01:07:33.050
a few years of investments, I think more than

01:07:33.050 --> 01:07:36.889
10 years, actually, at some point he thought

01:07:36.889 --> 01:07:40.489
about owning his own team. Right. And, and that

01:07:40.489 --> 01:07:43.949
has to do with when you're a sponsor. And even

01:07:43.949 --> 01:07:46.269
though you're putting in a lot of marketing money

01:07:46.269 --> 01:07:48.590
into this team, at the end of the day, the team

01:07:48.590 --> 01:07:51.909
makes their own decisions. And so he doesn't

01:07:51.909 --> 01:07:54.360
have that much of a say. in the decision making

01:07:54.360 --> 01:07:57.039
of the team. At some point, I think he wanted

01:07:57.039 --> 01:08:00.400
more say because he's so involved. Right. And

01:08:00.400 --> 01:08:03.719
also he became really good friends. And I don't

01:08:03.719 --> 01:08:07.099
know the channel with Dr. Marco Helmut, who is.

01:08:08.039 --> 01:08:12.119
if you guys do watch formula one he is kind of

01:08:12.119 --> 01:08:15.519
the i don't know what his exact role is but he

01:08:15.519 --> 01:08:20.159
is the the figurehead of the red bull sport the

01:08:20.159 --> 01:08:23.300
two teams and also the academy that kind of person

01:08:23.300 --> 01:08:25.100
we call him the spiritual leader of the yeah

01:08:25.100 --> 01:08:28.840
i think he's like i don't know his like actual

01:08:28.840 --> 01:08:31.720
position but like he's a decision maker basically

01:08:31.720 --> 01:08:35.979
right their friendship developed and they decided

01:08:35.979 --> 01:08:39.000
rather than not making decisions and just being

01:08:39.000 --> 01:08:42.560
a sponsor, they wanted to really commit and also

01:08:42.560 --> 01:08:45.260
try to make money at the same time. At first

01:08:45.260 --> 01:08:48.380
there was, and they were pretty lucky. So 2004,

01:08:48.840 --> 01:08:52.739
one of the team actually went on sale for $1.

01:08:53.239 --> 01:08:56.319
It's called Jaguar. Oh, Jaguar. Back in the days.

01:08:56.399 --> 01:08:58.640
And that was the one that got renamed Red Bull

01:08:58.640 --> 01:09:04.060
Racing. Red Bull Racing. Points. Yeah. So they

01:09:04.060 --> 01:09:07.180
acquired that. And Jaguar is obviously struggling

01:09:07.180 --> 01:09:12.300
financially. And it wasn't just a $1 deal, obviously.

01:09:12.300 --> 01:09:15.739
They committed a $400 million investment for

01:09:15.739 --> 01:09:17.840
the three years afterwards. And since they probably

01:09:17.840 --> 01:09:20.760
put in billions of dollars into this team after

01:09:20.760 --> 01:09:24.479
owning it for... you know more than 20 years

01:09:24.479 --> 01:09:29.920
what's shocking at that time was immediately

01:09:29.920 --> 01:09:33.859
the year after another team went on sale i guess

01:09:33.859 --> 01:09:35.720
it was just the time that everyone wasn't doing

01:09:35.720 --> 01:09:38.340
well which is scuderia offertory it's called

01:09:38.340 --> 01:09:40.420
well back then the team that went on sale is

01:09:40.420 --> 01:09:43.460
called minority that's right and then they initially

01:09:43.460 --> 01:09:49.579
named the team tororoso which is red bull in

01:09:49.579 --> 01:09:53.199
italian And the team is, yeah, it's based in

01:09:53.199 --> 01:09:55.800
Italy, obviously, but it went through several

01:09:55.800 --> 01:09:59.060
names until it got to today's name, which is

01:09:59.060 --> 01:10:03.399
VCARB. Visa, Cash App, Red Bull, VCARB. Yes,

01:10:03.399 --> 01:10:06.500
VCARB. Which is very far away from Toro Rosso.

01:10:06.579 --> 01:10:09.979
Yes, it's obviously named after its title sponsor,

01:10:10.220 --> 01:10:14.619
Visa. But what is very interesting is through

01:10:14.619 --> 01:10:18.970
this learning, they realized that With two teams,

01:10:19.050 --> 01:10:22.609
you actually have a lot of synergies. Because

01:10:22.609 --> 01:10:25.569
at first, this is pure investment. They're not

01:10:25.569 --> 01:10:28.470
generating profit out of this. They are spending

01:10:28.470 --> 01:10:32.270
all the $400 million, for example, over the three

01:10:32.270 --> 01:10:36.270
years. They see this as marketing spend, just

01:10:36.270 --> 01:10:38.789
as your sponsorship, right? But then you kind

01:10:38.789 --> 01:10:40.729
of get to sit in as the owner and you make more

01:10:40.729 --> 01:10:44.739
decisions. But with the two teams and with Dr.

01:10:45.199 --> 01:10:48.819
Helmut Marko, who runs the Talent Academy, they

01:10:48.819 --> 01:10:51.680
realized that there is synergy where you can

01:10:51.680 --> 01:10:55.439
develop a talent from their carding days when

01:10:55.439 --> 01:10:59.800
the kids are 13, 14 years old. You find a pool

01:10:59.800 --> 01:11:04.539
and then eventually help them grow into. different

01:11:04.539 --> 01:11:07.279
stages of racing, let's say. Like a junior and

01:11:07.279 --> 01:11:09.479
a senior and you graduate and you move on to

01:11:09.479 --> 01:11:13.520
a better team. Exactly. And so sponsoring someone

01:11:13.520 --> 01:11:18.420
into F1, if they ever make it, it costs anywhere

01:11:18.420 --> 01:11:21.779
between $1 .5 million to $45 million, right?

01:11:22.239 --> 01:11:26.079
But the amount of revenue that they've managed

01:11:26.079 --> 01:11:29.659
to get from... let's say winning a title, which

01:11:29.659 --> 01:11:33.739
they did back in 2010 to 2013. Sebastian Vettel?

01:11:33.939 --> 01:11:38.279
Yes. So for four years, they won the F1 championship,

01:11:38.380 --> 01:11:42.840
which then brought in a lot of viewership and

01:11:42.840 --> 01:11:46.319
return on their revenue and a lot of sponsorships.

01:11:46.319 --> 01:11:48.659
And more talent wants to join the team. Exactly.

01:11:48.659 --> 01:11:54.890
And so overall, it almost turned into a VC. company

01:11:54.890 --> 01:11:57.949
like a pipeline pipeline these like but for for

01:11:57.949 --> 01:12:03.430
kids who are in you know into uh we don't have

01:12:03.430 --> 01:12:06.010
exact information on when they started to make

01:12:06.010 --> 01:12:10.789
profit so the data that i've got every year rebel

01:12:10.789 --> 01:12:15.850
still puts in about and this is very rough about

01:12:15.850 --> 01:12:20.090
160 million dollars a year into rebel racing

01:12:21.199 --> 01:12:23.560
And that's only 35 % of what they put in. The

01:12:23.560 --> 01:12:27.779
rest comes from sponsorships and selling merchandise,

01:12:28.000 --> 01:12:32.539
etc. Most of them likely from sponsorship. The

01:12:32.539 --> 01:12:35.619
team itself actually only makes $10 million profit,

01:12:35.920 --> 01:12:38.140
which is actually pretty good. A lot of teams

01:12:38.140 --> 01:12:40.720
out there don't make any money, loses money,

01:12:40.880 --> 01:12:44.520
especially before Netflix made Drive to Survive

01:12:44.520 --> 01:12:47.819
that made F1 more popular. Most of the teams

01:12:47.819 --> 01:12:51.560
are actually either owned by wealthy individuals

01:12:51.560 --> 01:12:56.640
or are more kind of investment, not looking for

01:12:56.640 --> 01:12:59.380
return, but looking for marketing exposure. Passion

01:12:59.380 --> 01:13:02.260
projects for rich people. Yeah. And some marketing

01:13:02.260 --> 01:13:04.960
exposure, of course. Or there are automotive

01:13:04.960 --> 01:13:10.500
companies that want to have, you know, this motivate

01:13:10.500 --> 01:13:13.260
their sales like Ferrari or Mercedes. For sure.

01:13:13.640 --> 01:13:16.979
And so $10 million is good, right? But that's

01:13:16.979 --> 01:13:20.600
after Red Bull puts in the $160 million of investments

01:13:20.600 --> 01:13:25.479
every year. However, the amount of exposure the

01:13:25.479 --> 01:13:30.279
logos get, right? And it correlates to the amount

01:13:30.279 --> 01:13:32.720
of wins that Max Verstappen gets. Oh, of course.

01:13:33.079 --> 01:13:37.460
Everywhere. Obviously leads to more can sales.

01:13:37.739 --> 01:13:40.039
Oh, yes. So there's this thing where like win

01:13:40.039 --> 01:13:42.460
on Sunday and then drink on Monday or something

01:13:42.460 --> 01:13:46.630
like that. Broadly, folks have... estimated that

01:13:46.630 --> 01:13:52.710
this $160 million of investments generates almost

01:13:52.710 --> 01:13:58.689
double the marketing effect. So if you put $320,

01:13:59.090 --> 01:14:02.050
double that, into your traditional marketing

01:14:02.050 --> 01:14:04.229
spend, you get the same amount of exposure for

01:14:04.229 --> 01:14:07.550
your canned sales. All of that said, it might

01:14:07.550 --> 01:14:09.529
be just really rough estimates because you can't

01:14:09.529 --> 01:14:12.569
really attribute a can sale to a Max Verstappen.

01:14:13.829 --> 01:14:16.390
I was going to say you maybe can because if you

01:14:16.390 --> 01:14:18.890
go to the Netherlands and if you were to be wearing

01:14:18.890 --> 01:14:20.609
a Red Bull hat, maybe you get a discount just

01:14:20.609 --> 01:14:23.529
walking into one of the convenience stores. I'm

01:14:23.529 --> 01:14:25.449
sure there's wealthy sponsors who are like, yes,

01:14:25.449 --> 01:14:31.649
I'll pay for Max. I'm sure. Yeah, the Orange

01:14:31.649 --> 01:14:36.439
Army. Wow. All in all, they've learned that this

01:14:36.439 --> 01:14:41.640
makes their marketing spend cheaper and you're

01:14:41.640 --> 01:14:44.640
allowed to own sports companies and you grow

01:14:44.640 --> 01:14:47.600
talent. It's a better deal. So what have they

01:14:47.600 --> 01:14:50.100
done with this learning, right? Other than developing

01:14:50.100 --> 01:14:54.520
talents in auto sports, they copy and pasted

01:14:54.520 --> 01:14:58.020
this exact model, but with like five other teams

01:14:58.020 --> 01:15:03.039
in football. Soccer, you mean? Okay, some call

01:15:03.039 --> 01:15:04.380
it football, some call it soccer. Some call it

01:15:04.380 --> 01:15:06.119
soccer, but Red Bull would like to call it football.

01:15:06.199 --> 01:15:09.539
Okay, let's do football. Football, soccer. But

01:15:09.539 --> 01:15:12.720
they also invested in the US, so Major League

01:15:12.720 --> 01:15:19.100
Soccer. And this is where it gets super interesting.

01:15:19.699 --> 01:15:21.880
To make this short, they replicated the model,

01:15:22.020 --> 01:15:28.050
but rather than two teams, I'm counting. I'm

01:15:28.050 --> 01:15:30.649
counting like five different countries, but I

01:15:30.649 --> 01:15:33.529
think they divested in Ghana. So they have Germany,

01:15:33.729 --> 01:15:37.350
which is currently their top team. So this is

01:15:37.350 --> 01:15:41.210
the equivalent of Red Bull Racing. So Germany,

01:15:41.329 --> 01:15:47.289
the team is called Leipzig. In Austria, they

01:15:47.289 --> 01:15:51.550
have, I guess, Salzburg, which is where you went

01:15:51.550 --> 01:15:54.979
to. also where the headquarter is at where the

01:15:54.979 --> 01:15:58.279
headquarters at and this is their first investment

01:15:58.279 --> 01:16:01.340
obviously and this is actually kind of a mini

01:16:01.340 --> 01:16:03.579
feeder team but sometimes they compete with each

01:16:03.579 --> 01:16:06.680
other and this is the austria -based team in

01:16:06.680 --> 01:16:09.409
austria they also own a second tier team Later

01:16:09.409 --> 01:16:11.329
on, they purchased a second tier team. Like the

01:16:11.329 --> 01:16:14.510
RB to Red Bull. Right. So Austria, I think you

01:16:14.510 --> 01:16:17.090
can also, a lot of fans don't like to see it

01:16:17.090 --> 01:16:19.529
that way, but you can also position as the feeder

01:16:19.529 --> 01:16:22.829
to the German team. Makes sense. Because the

01:16:22.829 --> 01:16:26.069
Bundesliga, which is the German league, is a

01:16:26.069 --> 01:16:28.750
lot bigger. It's one of the top European championships.

01:16:28.890 --> 01:16:31.909
Gotcha. Whereas Austria is much... smaller i

01:16:31.909 --> 01:16:35.470
guess um and so salzburg let's say that is your

01:16:35.470 --> 01:16:38.390
toro rosso v carb and then you have your second

01:16:38.390 --> 01:16:42.850
second team uh also in austria and then they

01:16:42.850 --> 01:16:45.729
also invested in a new york team called metro

01:16:45.729 --> 01:16:48.189
star which they rebranded to red bull as well

01:16:48.189 --> 01:16:50.649
so all of these they would acquire rebrand to

01:16:50.649 --> 01:16:52.510
rebel and make it everything make everything

01:16:52.510 --> 01:17:00.039
red um and so in the us they acquired the New

01:17:00.039 --> 01:17:05.560
York team in 2006. And then in Brazil, they initially

01:17:05.560 --> 01:17:08.659
actually wanted to start their own team, didn't

01:17:08.659 --> 01:17:11.600
work out, ended up acquiring as well. And then

01:17:11.600 --> 01:17:13.920
they tried in Ghana, but it closed down. But

01:17:13.920 --> 01:17:18.699
they do still have a base to get talent. So you

01:17:18.699 --> 01:17:21.479
can see how they expanded this into more teams

01:17:21.479 --> 01:17:27.239
and globally. And as a result, within the course

01:17:27.239 --> 01:17:31.680
of seven years and i forgot to mention that when

01:17:31.680 --> 01:17:34.640
they purchased the german team in leipzig it

01:17:34.640 --> 01:17:36.939
was in the fifth tier which is the bottom tier

01:17:36.939 --> 01:17:41.220
so this is like your carding right you managed

01:17:41.220 --> 01:17:46.699
to within seven years make it up the ladder four

01:17:46.699 --> 01:17:50.159
times this means you have to be the winner or

01:17:50.159 --> 01:17:53.479
runner up in a group of at least like 16 teams

01:17:53.479 --> 01:17:58.079
i think almost every second year wow they made

01:17:58.079 --> 01:18:01.000
it to the top tier they even won the championship

01:18:01.000 --> 01:18:05.699
i think once or twice since then it's that sounds

01:18:05.699 --> 01:18:07.979
like amazing sounds like their f1 journey too

01:18:07.979 --> 01:18:11.220
right yeah i mean they acquired the team in f1

01:18:11.220 --> 01:18:14.119
in 2004 and then their first championship is

01:18:14.119 --> 01:18:19.340
2013 10 2010 and since then it's been yeah a

01:18:19.340 --> 01:18:23.060
few times yeah so it really works out for them

01:18:23.060 --> 01:18:27.399
this model of developing talent and acquiring

01:18:27.399 --> 01:18:31.119
multiple teams. And in football, because there's

01:18:31.119 --> 01:18:33.720
actually a tradition, not a tradition, but it's

01:18:33.720 --> 01:18:37.359
quite common to trade or sell players, they profited

01:18:37.359 --> 01:18:41.109
massively. massively from this by human trafficking

01:18:41.109 --> 01:18:44.869
selling arbitraging on the players yeah because

01:18:44.869 --> 01:18:47.829
they can develop someone so when you i guess

01:18:47.829 --> 01:18:49.430
sign the contract when the players are quite

01:18:49.430 --> 01:18:51.649
young and sponsor them you pay the sponsorship

01:18:51.649 --> 01:18:54.609
fee but as you know with all sports stars their

01:18:54.609 --> 01:18:58.569
value grows exponentially so you can you can

01:18:58.569 --> 01:19:01.829
grow them have them play in your teams grow them

01:19:01.829 --> 01:19:05.220
to their maximum like i guess purchasable value

01:19:05.220 --> 01:19:09.159
like lewis hamilton i'm sorry to like you know

01:19:09.159 --> 01:19:13.359
you use value objectifying objectifying soccer

01:19:13.359 --> 01:19:16.699
players or football players um but they do really

01:19:16.699 --> 01:19:19.500
end up selling a lot of these players a lot of

01:19:19.500 --> 01:19:24.239
them to liverpool um at very very high values

01:19:24.239 --> 01:19:28.000
like like in the tens of million dollars so that

01:19:28.000 --> 01:19:30.920
business has really yielded Very good. Benefits.

01:19:31.119 --> 01:19:34.060
And marketing. Free marketing. Free marketing.

01:19:34.140 --> 01:19:38.439
Yeah, free marketing. So they went from sponsorship

01:19:38.439 --> 01:19:44.579
to creating sports to running media house to

01:19:44.579 --> 01:19:48.500
just now owning teams. And talent agency. And

01:19:48.500 --> 01:19:52.760
being a talent agency. And all of this is to...

01:19:53.420 --> 01:19:57.399
sell cans of drinks but but but the thing is

01:19:57.399 --> 01:20:00.000
with with the previous investments right it's

01:20:00.000 --> 01:20:02.680
pure like it's marketing expense whereas when

01:20:02.680 --> 01:20:06.300
you own a sports team is no longer an expense

01:20:06.300 --> 01:20:11.800
or less so of an expense so as someone who looks

01:20:11.800 --> 01:20:14.739
at this from a more fmcg point of view i sometimes

01:20:14.739 --> 01:20:17.619
challenge myself to the same question if you

01:20:17.619 --> 01:20:21.899
want to be selling any fmcg products does that

01:20:21.899 --> 01:20:25.739
mean That you need to be doing so many other

01:20:25.739 --> 01:20:28.800
things, aka building up your own content, creating

01:20:28.800 --> 01:20:32.260
your own stars, instead of selling your own products.

01:20:33.100 --> 01:20:34.880
Selling products should be the last thing that

01:20:34.880 --> 01:20:37.140
you do, but everything else goes beyond that,

01:20:37.279 --> 01:20:40.729
right? With Red Bull, exactly, right? have you

01:20:40.729 --> 01:20:43.270
seen them mentioning their cans in any of the

01:20:43.270 --> 01:20:45.750
f1 communications no like you don't interview

01:20:45.750 --> 01:20:49.170
max and he's like can't no right max would just

01:20:49.170 --> 01:20:54.609
be angry the effect is there right so and it's

01:20:54.609 --> 01:20:57.170
with every single sport they put a logo and they

01:20:57.170 --> 01:20:59.930
make sure the logo is on the content they produce

01:20:59.930 --> 01:21:03.770
and it just gets into people's hearts and minds

01:21:03.770 --> 01:21:06.710
and thoughts and without actually saying they

01:21:06.710 --> 01:21:09.369
never talked about how sugary it is or how carbonated

01:21:09.369 --> 01:21:12.170
it is But you just buy that drink. Right. Yeah,

01:21:12.210 --> 01:21:14.210
you buy that drink anyways. Yeah. Like the moment

01:21:14.210 --> 01:21:16.909
that we had in Japan at the Suzuka Grand Prix,

01:21:17.029 --> 01:21:20.550
when you walk into that 7 -Eleven, and even though

01:21:20.550 --> 01:21:23.310
you don't want to buy that Red Bull drink, but

01:21:23.310 --> 01:21:25.590
the moment that you saw like two pink bottles

01:21:25.590 --> 01:21:27.949
of Red Bull, one is Tsunoda, the other one is

01:21:27.949 --> 01:21:29.729
Max Verstappen, you're like, I'm buying this.

01:21:30.229 --> 01:21:33.130
Yeah. Yeah. Let's get it. Yeah, let's get it.

01:21:33.229 --> 01:21:35.829
Exactly. It's a spirit that is in those drinks

01:21:35.829 --> 01:21:39.220
that makes you want it. I mean, there's so many

01:21:39.220 --> 01:21:42.380
great marketing lessons from this one company

01:21:42.380 --> 01:21:47.460
alone. Do you think that Mattis' ultimate dream

01:21:47.460 --> 01:21:53.220
is to not do FMCG, but to create his own sports,

01:21:53.340 --> 01:21:56.220
I don't know, like arena and universe such that

01:21:56.220 --> 01:21:59.039
whatever he sells will sell to the audience that

01:21:59.039 --> 01:22:02.859
they want? I don't know if it's right off the

01:22:02.859 --> 01:22:07.819
bat, but when Red Bull... started to generate

01:22:07.819 --> 01:22:10.340
revenue and there's enough profits to play around

01:22:10.340 --> 01:22:13.960
with this is something he turned the company

01:22:13.960 --> 01:22:19.260
into yeah so you do have to you do have to have

01:22:19.260 --> 01:22:21.859
initial marketing success i don't know if you

01:22:21.859 --> 01:22:26.319
can go into formula one or go into german football

01:22:26.319 --> 01:22:31.079
right away in the 90s right but because of all

01:22:31.079 --> 01:22:34.460
the success earlier on because of all the margin

01:22:34.460 --> 01:22:37.539
and profit that was made through more traditional,

01:22:37.579 --> 01:22:39.539
I guess, now if we think about it, advertising,

01:22:40.140 --> 01:22:46.260
it is possible that you can own a sports team

01:22:46.260 --> 01:22:50.300
or own multiple sports teams and generate a profit.

01:22:51.020 --> 01:22:53.140
I really wonder, and I have this question for

01:22:53.140 --> 01:22:56.279
you too, who do you think is the first ever athlete

01:22:56.279 --> 01:23:02.319
that Red Bull owns that made Matisse realize

01:23:02.319 --> 01:23:07.420
that, oh, maybe I can start owning? So my talents,

01:23:07.640 --> 01:23:13.319
is it better? I don't think any athlete had anything

01:23:13.319 --> 01:23:18.380
to do with it based on my research. His initial

01:23:18.380 --> 01:23:21.460
thoughts about purchasing, whether it's Formula

01:23:21.460 --> 01:23:25.579
One or the South Park team, they're all based

01:23:25.579 --> 01:23:28.220
on his business connections who are in these

01:23:28.220 --> 01:23:32.359
sports. So the team owners or happens to know

01:23:32.359 --> 01:23:36.460
him. Right. And he's an avid like he's. crossed

01:23:36.460 --> 01:23:39.520
paths with them before right either as a sponsor

01:23:39.520 --> 01:23:43.340
or just as friends and he he likes sports um

01:23:43.340 --> 01:23:48.079
and they're the one that convinced him to think

01:23:48.079 --> 01:23:50.039
about investing because they know he has the

01:23:50.039 --> 01:23:54.579
money too right and some of them try to convince

01:23:54.579 --> 01:23:57.439
him that this is a good business and some of

01:23:57.439 --> 01:24:00.119
it worked out and some of it doesn't so nascar

01:24:00.119 --> 01:24:01.979
for example they actually had ownership stakes

01:24:01.979 --> 01:24:07.520
didn't work out right but having two sports that

01:24:07.520 --> 01:24:10.779
are globally super hot. And we talked about how

01:24:10.779 --> 01:24:15.640
they cannot sponsor these sports. And that's

01:24:15.640 --> 01:24:18.479
why they went into extreme sports. You know,

01:24:18.500 --> 01:24:20.579
like 10 years later, 20 years later, he comes

01:24:20.579 --> 01:24:23.359
back and say, not only can I sponsor, I can own

01:24:23.359 --> 01:24:27.119
teams. Such a feel good story. Yeah. But also

01:24:27.119 --> 01:24:30.800
I want, I do want to know his way of running

01:24:30.800 --> 01:24:33.279
the football teams actually generated a lot of

01:24:33.279 --> 01:24:36.500
hate. I think Formula One less so. People do

01:24:36.500 --> 01:24:38.939
like Red Bull. Actually, as a company, there's

01:24:38.939 --> 01:24:41.539
less, I guess, stigma against corporate ownership

01:24:41.539 --> 01:24:46.380
because Formula One cars are just plastered with

01:24:46.380 --> 01:24:50.000
commercials, right? But with football, I think

01:24:50.000 --> 01:24:51.800
the story is a little bit different because football

01:24:51.800 --> 01:24:54.659
clubs, a lot of them, especially in Germany,

01:24:54.819 --> 01:24:58.460
it's owned by members or it's very much... Community

01:24:58.460 --> 01:25:02.640
-based. Right. And so Red Bull plastering, it's...

01:25:03.680 --> 01:25:07.159
big logo changing the name changing kind of the

01:25:07.159 --> 01:25:12.399
history of a team in a city created so much protest

01:25:12.399 --> 01:25:16.460
i think it's i've read that they're one of the

01:25:16.460 --> 01:25:20.359
most hated teams out there um because of what

01:25:20.359 --> 01:25:22.760
they've done and they played around they skirted

01:25:22.760 --> 01:25:26.079
around a lot of football rules in different leagues

01:25:26.079 --> 01:25:29.840
to get what they want in the end yeah so controversial

01:25:29.840 --> 01:25:33.039
controversial but business -wise successful.

01:25:33.380 --> 01:25:37.979
That's the story of Austria Red Bull. The story

01:25:37.979 --> 01:25:41.100
of Austria Red Bull. Yeah. And shall we move

01:25:41.100 --> 01:25:45.479
on? China. To the most interesting bit that most

01:25:45.479 --> 01:25:49.039
of you probably have never heard of. But before

01:25:49.039 --> 01:25:51.960
Linda starts, and I'll let her have a quick breath

01:25:51.960 --> 01:25:55.420
before we dive into the next section, is a fun

01:25:55.420 --> 01:25:58.319
fact. You can buy at least four different kinds

01:25:58.319 --> 01:26:01.699
of Red Bulls in China. I count it like seven

01:26:01.699 --> 01:26:06.020
or eight. On our table, we currently have three

01:26:06.020 --> 01:26:08.020
of them and we're drinking one of it. We had

01:26:08.020 --> 01:26:12.020
a taste test before. In China, there is another

01:26:12.020 --> 01:26:15.619
interesting company that had a very long -standing

01:26:15.619 --> 01:26:20.000
overlap with the TC Pharmaceuticals. This company

01:26:20.000 --> 01:26:25.260
is fascinating. It started with a... Chinese

01:26:25.260 --> 01:26:29.300
who worked in Thailand? So how about this? So

01:26:29.300 --> 01:26:32.260
Chaleo is also a Chinese Thai as we've covered

01:26:32.260 --> 01:26:35.079
before. Right. So they had crossed paths. They,

01:26:35.079 --> 01:26:38.840
yes. Oh, I have a good one. I have a, so when

01:26:38.840 --> 01:26:41.100
a Thai Chinese meets a Chinese Thai, what do

01:26:41.100 --> 01:26:45.060
they say to each other? I've been waiting. Oh,

01:26:45.159 --> 01:26:49.720
how do you know? Oh, really? Yes. Anyways, that's

01:26:49.720 --> 01:26:51.779
not funny. Okay, we can go on. You can tell the

01:26:51.779 --> 01:26:54.659
story now. Well, I thought for two hours just

01:26:54.659 --> 01:26:56.439
about this joke and then it's not. Okay, it's

01:26:56.439 --> 01:27:00.020
all right. Say it again. No, no, no. What did

01:27:00.020 --> 01:27:04.010
they say? In my imaginary world, they very friendly

01:27:04.010 --> 01:27:06.409
said Sawadika to each other. That's all that

01:27:06.409 --> 01:27:09.590
I had imagined. But you guessed it, so I'm very

01:27:09.590 --> 01:27:12.909
happy about that. Sorry. I lived in Thailand

01:27:12.909 --> 01:27:16.770
for too long. Going back to actually the origin

01:27:16.770 --> 01:27:21.270
of the founder, Cha Leo, he is Chinese heritage.

01:27:21.930 --> 01:27:24.329
He moved to Thailand when he was two, but he

01:27:24.329 --> 01:27:27.529
also had a Chinese upbringing. His dad was Chinese.

01:27:29.659 --> 01:27:34.420
And I think there's kind of this familial aspect

01:27:34.420 --> 01:27:38.800
of all Chinese folks. If you're brought up in

01:27:38.800 --> 01:27:42.239
this, you know, in this heritage is that you

01:27:42.239 --> 01:27:44.920
need to contribute to your homeland. Oh, my God.

01:27:45.000 --> 01:27:48.159
When you are successful. Come back to the homeland.

01:27:48.380 --> 01:27:52.079
Exactly. Like when you made it as TCP pharmaceutical

01:27:52.079 --> 01:27:56.939
in Thailand, you should come back to your homeland

01:27:56.939 --> 01:28:02.130
and. you know, help your village men at that

01:28:02.130 --> 01:28:05.850
point in Hainan. Co -develop? Yeah. Well, yeah,

01:28:05.930 --> 01:28:07.130
I think a lot of the very... And you brag about

01:28:07.130 --> 01:28:09.470
yourself, right, too. In a large part of Southeast

01:28:09.470 --> 01:28:14.210
Asia, there are so many Chinese business or Chinese

01:28:14.210 --> 01:28:17.109
-Thai, Chinese -Filipino, Chinese -Indonesian,

01:28:17.109 --> 01:28:22.000
and they tend to use that... business partnership

01:28:22.000 --> 01:28:25.020
with China to do their initial business and succeed

01:28:25.020 --> 01:28:27.319
and then later come back. So I think Chaleo falls

01:28:27.319 --> 01:28:32.260
into that. Exactly. So, and I think at that point,

01:28:32.359 --> 01:28:35.939
which is 1993, we're talking about, he already

01:28:35.939 --> 01:28:38.979
formed this partnership with Matisse and he has

01:28:38.979 --> 01:28:43.500
some probably dividends coming in. You bet. Yeah.

01:28:43.539 --> 01:28:46.479
So he's going back to homeland. He's like, I

01:28:46.479 --> 01:28:49.060
made it guys. I'm now going to help you make

01:28:49.060 --> 01:28:52.880
it. But he didn't. He failed the first time around.

01:28:52.979 --> 01:28:55.100
So he went back to Hainan thinking that I could

01:28:55.100 --> 01:28:57.279
just replicate my Red Bull business model in

01:28:57.279 --> 01:29:00.439
China. He built a factory. He didn't. Oh, he

01:29:00.439 --> 01:29:04.739
didn't. I think he didn't. He didn't even start

01:29:04.739 --> 01:29:07.779
with factories. The first stumbling block, the

01:29:07.779 --> 01:29:10.359
same as Europe, is how do you even sell this

01:29:10.359 --> 01:29:12.920
drink? How do you get the go -to market right

01:29:12.920 --> 01:29:17.390
to begin with? China, even though... Taurine

01:29:17.390 --> 01:29:23.270
is a Chinese traditional drinking recipe. Caffeine

01:29:23.270 --> 01:29:25.609
is less so. And so mixing these with sugar together,

01:29:25.729 --> 01:29:28.569
the health board was like, I'm not sure. I'm

01:29:28.569 --> 01:29:30.949
not sure if you can sell this. So he faced a

01:29:30.949 --> 01:29:34.069
lot of issues. He couldn't market it. The same

01:29:34.069 --> 01:29:38.250
as how he met Mattishez, this guy who... How

01:29:38.250 --> 01:29:40.510
about we start with his Chinese name? Yan Bing.

01:29:40.829 --> 01:29:43.250
Yeah, that's quite easy. I know I got that one

01:29:43.250 --> 01:29:45.949
right. I'll give you a little background of Yan

01:29:45.949 --> 01:29:52.270
Bin. So he was born in 1954. He's about 30 years

01:29:52.270 --> 01:29:54.930
younger than Cha Liao. And he was originally

01:29:54.930 --> 01:29:57.710
born in a very, very poor family in Shandong

01:29:57.710 --> 01:30:03.229
province. When he is 16, he was sent to Henan

01:30:03.229 --> 01:30:06.350
for farm work. And still, he was very, very poor.

01:30:06.699 --> 01:30:10.260
In 1971, a year after he was being sent to Henan,

01:30:10.260 --> 01:30:12.920
he decided that, you know what, this is it. I'm

01:30:12.920 --> 01:30:15.739
too poor. I have nothing to lose. I have about

01:30:15.739 --> 01:30:19.260
$10 in total, which is 92 kuai in his pocket.

01:30:19.319 --> 01:30:22.079
And he decided to go to Thailand. And that's

01:30:22.079 --> 01:30:26.460
a big leap for him. Just go from Henan to Thailand.

01:30:26.979 --> 01:30:29.659
And he went there on his own, not like Chaleo

01:30:29.659 --> 01:30:32.060
where he's... Parents brought him. And also at

01:30:32.060 --> 01:30:34.899
a very bad time. So he really could have just

01:30:34.899 --> 01:30:38.340
lost his life or cannot make it back at all.

01:30:38.539 --> 01:30:42.239
So he started working in a restaurant that is

01:30:42.239 --> 01:30:44.880
opened by Chinese and he never complained about

01:30:44.880 --> 01:30:48.779
work. And after he worked there for a very long

01:30:48.779 --> 01:30:53.180
time, right around 1984, well, again, when he

01:30:53.180 --> 01:30:56.619
hit his 30s, he decided to stay his own company,

01:30:56.760 --> 01:31:01.510
which is... The Reinwood Group, a .k .a. Hua

01:31:01.510 --> 01:31:05.630
Bin. A real estate development company. That's

01:31:05.630 --> 01:31:07.609
right. Yeah, that's right. Yeah. Real estate

01:31:07.609 --> 01:31:10.149
development and building services and a little

01:31:10.149 --> 01:31:13.529
bit of travel and trade. That's back in the days.

01:31:13.609 --> 01:31:16.760
So what I've researched. told me that because

01:31:16.760 --> 01:31:19.939
they're both quite successful Chinese -type businessmen,

01:31:20.039 --> 01:31:22.560
it's just natural that their paths come across.

01:31:23.119 --> 01:31:28.560
And so when Yan Bing heard about Cha Leo's issue

01:31:28.560 --> 01:31:32.119
of how he tried and failed to enter in China,

01:31:32.300 --> 01:31:35.680
he said, let's chat about how I can help you

01:31:35.680 --> 01:31:43.050
do this. And so there's two things that... costs

01:31:43.050 --> 01:31:46.189
an issue for chileo to enter china so the first

01:31:46.189 --> 01:31:50.409
thing is the repo logo was registered by a completely

01:31:50.409 --> 01:31:53.350
irrelevant company that just happened it's out

01:31:53.350 --> 01:31:57.489
of pure bad luck it was registered by a non -energy

01:31:57.489 --> 01:32:00.789
energy drink obviously not uh did not exist in

01:32:00.789 --> 01:32:02.989
china back then but just a company in zhoujiang

01:32:04.579 --> 01:32:07.600
And so he couldn't acquire the rights. They had

01:32:07.600 --> 01:32:10.420
no idea, right? It was for, I don't even know

01:32:10.420 --> 01:32:12.500
what the company's, it's irrelevant to energy

01:32:12.500 --> 01:32:15.779
drinks. It's just they use the two bowl logo.

01:32:16.020 --> 01:32:20.100
And so HLIO cannot register. Second thing, which

01:32:20.100 --> 01:32:24.119
is actually harder to get is the authorization

01:32:24.119 --> 01:32:27.739
to go to market because you do need the approval

01:32:27.739 --> 01:32:30.039
from the Ministry of Health for you to market

01:32:30.039 --> 01:32:33.199
your drink because it has contents that are not,

01:32:33.640 --> 01:32:36.500
very much like pre -approved in china it's not

01:32:36.500 --> 01:32:38.239
like coca -cola where you know you're already

01:32:38.239 --> 01:32:41.560
selling yinbing somehow being the hustler that

01:32:41.560 --> 01:32:45.779
he is uh he i don't know if he knew these folks

01:32:45.779 --> 01:32:49.760
or he somehow found these folks so they formed

01:32:49.760 --> 01:32:52.680
they decided to form a jv the two of them plus

01:32:52.680 --> 01:32:55.380
two other companies so the initial jv that was

01:32:55.380 --> 01:32:58.420
formed in 1995 actually has four stakeholders

01:32:58.420 --> 01:33:01.840
uh reinwood Yan Bing's company being one of them,

01:33:01.859 --> 01:33:05.479
TCP, which is Chai Leo's company, but also two

01:33:05.479 --> 01:33:10.300
state -owned enterprises. And that's, I mean,

01:33:10.319 --> 01:33:12.979
that's a big fee to get state -owned enterprises

01:33:12.979 --> 01:33:15.779
to partnership with you in a JV, right? So the

01:33:15.779 --> 01:33:18.960
first one is called Shenzhen Zhonghao Group.

01:33:19.279 --> 01:33:21.520
I couldn't find the English name, but Shenzhen

01:33:21.520 --> 01:33:25.659
Zhonghao Group. And they're the logo, they went

01:33:25.659 --> 01:33:27.840
to the original logo owners, acquired the rights.

01:33:28.380 --> 01:33:31.500
So they solved the logo issue. The second one

01:33:31.500 --> 01:33:35.680
is called China National Foodstuff Process Group.

01:33:35.739 --> 01:33:40.920
And in Chinese, it's called 中国食品加工总公司. And they

01:33:40.920 --> 01:33:44.539
solved the license issue. Exactly. So they solved

01:33:44.539 --> 01:33:46.460
the license issue because they're state -owned

01:33:46.460 --> 01:33:48.359
and they're tied to the state. And of course,

01:33:48.359 --> 01:33:51.520
it's easier for them to get you the relationship,

01:33:51.579 --> 01:33:57.159
to get you the license. Yeah. And China, obviously,

01:33:57.319 --> 01:34:01.079
back in the days, is a very big relational, it

01:34:01.079 --> 01:34:03.579
has a really big relational business environment,

01:34:03.800 --> 01:34:07.279
right? So Yan Bin solved the problem for Chaleo.

01:34:07.399 --> 01:34:10.020
And Chaleo, at that time, I guess he was benefiting

01:34:10.020 --> 01:34:13.300
from Macha Chef's partnership. Franchise in EU.

01:34:13.539 --> 01:34:16.060
And so he kind of replicated this model in China.

01:34:16.119 --> 01:34:18.979
And he said, you know what? I'll provide the

01:34:18.979 --> 01:34:21.979
expertise. I'll provide the ingredients. You

01:34:21.979 --> 01:34:24.180
do everything that Macha Chef do for me in Thailand,

01:34:24.220 --> 01:34:26.979
but do it in China. I give you, you know, we

01:34:26.979 --> 01:34:29.100
signed this agreement where you can, you have

01:34:29.100 --> 01:34:32.079
the rights to do everything on the JV's behalf.

01:34:32.340 --> 01:34:34.319
I would, I would just do that. I would shake

01:34:34.319 --> 01:34:36.380
their hands. Yeah. And walk away. And they were,

01:34:36.439 --> 01:34:39.279
they did shake their hands and they have a really,

01:34:39.319 --> 01:34:42.100
really good relationship with actually contributed

01:34:42.100 --> 01:34:46.939
to the growth of Red Bull, right? But in Yan

01:34:46.939 --> 01:34:50.680
Bing's perspective, he actually had to grow the

01:34:50.680 --> 01:34:53.539
brand in China from scratch. Cha Liu did not.

01:34:54.670 --> 01:34:58.470
put too much money or effort into this operation.

01:34:58.609 --> 01:35:01.149
Yan Bing was the person who did the operations

01:35:01.149 --> 01:35:03.850
in China. Run the show. Run the show. And the

01:35:03.850 --> 01:35:07.029
first thing he did, which is, I think, for any

01:35:07.029 --> 01:35:10.050
Chinese person, I think it's genius, is he went

01:35:10.050 --> 01:35:14.989
on Chun Wan, which is the Chinese New Year. Super

01:35:14.989 --> 01:35:18.029
Bowl. It's more than Super Bowl. Yes, it's a

01:35:18.029 --> 01:35:22.539
Super Bowl equivalent. It is the CCTV four hour,

01:35:22.579 --> 01:35:25.340
four and a half hour show that everyone watches

01:35:25.340 --> 01:35:30.239
on New Year's Eve because every single broadcaster

01:35:30.239 --> 01:35:35.819
in China is forced to broadcast it. No brainer.

01:35:36.000 --> 01:35:40.270
Yeah. The viewership, and no other show can claim

01:35:40.270 --> 01:35:42.050
this, right? The viewership, I think at some

01:35:42.050 --> 01:35:43.890
point, is like 98 % of the population. For what

01:35:43.890 --> 01:35:46.250
I call, it is the premium advertising slot because

01:35:46.250 --> 01:35:49.789
you cannot not see it. This is like, this is

01:35:49.789 --> 01:35:53.250
probably five times Super Bowl. Yeah, I think

01:35:53.250 --> 01:35:54.949
in number wise, it is five times the Super Bowl.

01:35:55.010 --> 01:35:57.949
So when you said people give each other Red Bull

01:35:57.949 --> 01:36:00.109
cans for Chinese New Year, I feel like this is

01:36:00.109 --> 01:36:02.250
where it started. Yes, that's why it is. During

01:36:02.250 --> 01:36:04.729
Chinese New Year time. I think it was 1995 or

01:36:04.729 --> 01:36:07.369
1996, they were on CCTV. that kicked everything

01:36:07.369 --> 01:36:11.069
off obviously energy energy drink wasn't a thing

01:36:11.069 --> 01:36:14.970
no it's not for years so they're still struggling

01:36:14.970 --> 01:36:18.670
despite having a lot of money put on this so

01:36:18.670 --> 01:36:21.989
yinbing actually at some point in time asked

01:36:21.989 --> 01:36:24.510
chileo for more investment chileo said no so

01:36:24.510 --> 01:36:28.189
yinbing actually had to put his uh real estate

01:36:28.189 --> 01:36:30.909
part of his real estate in developing developments

01:36:30.909 --> 01:36:35.350
in china as a collateral to get funding So he

01:36:35.350 --> 01:36:38.409
puts a lot of efforts in growing Red Bull in

01:36:38.409 --> 01:36:41.970
China. And he positioned it very differently

01:36:41.970 --> 01:36:44.569
from Matt Tisha. So he used, for the most part,

01:36:44.609 --> 01:36:48.869
the original formulas. And it was created for

01:36:48.869 --> 01:36:51.970
the boot collars, for the most part. And so this

01:36:51.970 --> 01:36:55.270
wasn't the party scene, the extreme sports. This

01:36:55.270 --> 01:36:58.289
is just like... Even with the commercial tagline,

01:36:58.350 --> 01:37:00.630
if you're tired, if you're sleepy, drink Red

01:37:00.630 --> 01:37:05.170
Bull. It's very practical. It's targeted for

01:37:05.170 --> 01:37:09.270
your average blue collar. But it's still priced

01:37:09.270 --> 01:37:13.770
at a premium. Not as much premium, but at a premium.

01:37:14.229 --> 01:37:16.109
Definitely more expensive than the other drinks

01:37:16.109 --> 01:37:17.670
that's being offered in the convenience store.

01:37:17.750 --> 01:37:22.189
I think it's twice as much than Coca -Cola. And

01:37:22.189 --> 01:37:27.649
so things kind of... hung around for 10 years

01:37:27.649 --> 01:37:32.770
until 2005 i think they sold 300 million bottles

01:37:32.770 --> 01:37:37.270
which is not much 2011 12 is when things kicked

01:37:37.270 --> 01:37:39.989
off and some people attribute it to the beijing

01:37:39.989 --> 01:37:44.850
olympics uh when yeah so olympics was 2008 right

01:37:44.850 --> 01:37:47.909
so i think the till effects of olympics yeah

01:37:47.909 --> 01:37:53.319
in 2012 they hit 10 billion cans So that's a

01:37:53.319 --> 01:37:56.560
huge milestone for them. And that made Yan Bing

01:37:56.560 --> 01:38:02.159
the fourth richest man in China. A Red Bull drink

01:38:02.159 --> 01:38:05.140
made this guy the fourth richest man in China.

01:38:05.140 --> 01:38:08.079
Not real estate, but Red Bull. Yeah. In two years

01:38:08.079 --> 01:38:13.439
after, the sales hit 20 billion Chinese yuan.

01:38:13.779 --> 01:38:17.310
So 10 billion was Chinese yuan. So doubled in

01:38:17.310 --> 01:38:20.770
two years and they peaked pretty much at 2015

01:38:20.770 --> 01:38:25.170
-16 at 23 billion Chinese dollars. At that time,

01:38:25.210 --> 01:38:27.710
guess how much market share they had in China

01:38:27.710 --> 01:38:30.810
in terms of energy drinks? I'm going to take

01:38:30.810 --> 01:38:34.909
a wild guess, maybe 80%. Your wild guess is exactly

01:38:34.909 --> 01:38:40.329
on. 80 -20 always works. Yeah, it's 80 % exactly.

01:38:41.109 --> 01:38:44.159
And it's because he also created the... Ryan

01:38:44.159 --> 01:38:46.899
Wood also created the concept of energy drinks.

01:38:46.960 --> 01:38:50.039
They got the first energy drink approved, right?

01:38:50.180 --> 01:38:53.579
And so naturally there wasn't, and there wasn't

01:38:53.579 --> 01:38:56.340
that many entrants. It wasn't that much of a

01:38:56.340 --> 01:38:58.760
market economy for the first 10 years that they're

01:38:58.760 --> 01:39:04.909
operating. And so 80%, but. Competition. Yes,

01:39:05.069 --> 01:39:10.189
competition and also internal issues. So listeners,

01:39:10.289 --> 01:39:12.590
if you've been listening carefully, you would

01:39:12.590 --> 01:39:15.569
have maybe remember that Che Leo actually passed

01:39:15.569 --> 01:39:22.149
away in 2012. And Red Bull China sales with Ryanwood

01:39:22.149 --> 01:39:28.310
JV peaked at 2015, 2016. Yeah. And so at that

01:39:28.310 --> 01:39:35.750
point, it's 20 years in the JV. And in the Chinese

01:39:35.750 --> 01:39:42.569
JV laws, you can only have a foreign associated

01:39:42.569 --> 01:39:46.890
JV for 20 years to own the logo rights. But here's

01:39:46.890 --> 01:39:48.560
a... Here's the thing that I couldn't understand.

01:39:48.739 --> 01:39:51.020
Because in their original agreement, I remember

01:39:51.020 --> 01:39:53.859
it was a 50 -year that was written somewhere,

01:39:54.079 --> 01:39:56.939
right? Why was it 50 years? But factually, in

01:39:56.939 --> 01:39:59.819
Chinese law, it's only good for 20 years. Yeah.

01:39:59.979 --> 01:40:03.539
And isn't that where the contentious point would...

01:40:03.539 --> 01:40:05.300
What about the rest of the 30 years? What are

01:40:05.300 --> 01:40:07.939
you going to do about it? Exactly. So you hit

01:40:07.939 --> 01:40:09.380
the right point. And that's why we're seeing

01:40:09.380 --> 01:40:12.859
seven cans of Red Bulls in China. Because this

01:40:12.859 --> 01:40:17.079
dispute is very hard to justify. Obviously, Yanbin,

01:40:17.220 --> 01:40:20.699
in business legal perspective, he made the wrong

01:40:20.699 --> 01:40:24.479
call. When he signed the 50 -year contract, the

01:40:24.479 --> 01:40:29.000
JV 20 -year expiration was in place, right? And

01:40:29.000 --> 01:40:32.439
so there was enough trust, I think there was

01:40:32.439 --> 01:40:34.819
enough trust in his relationship with Chaleo

01:40:34.819 --> 01:40:39.229
that he figured... that this it would just go

01:40:39.229 --> 01:40:42.850
on because with matushas like there was no challenge

01:40:42.850 --> 01:40:45.590
you know for for years you're generating money

01:40:45.590 --> 01:40:47.970
for me you're giving me dividends why would i

01:40:47.970 --> 01:40:51.029
why would i care right but that's not the case

01:40:51.029 --> 01:40:55.489
with chaleo because when he passed away how did

01:40:55.489 --> 01:41:00.909
he split his shares of red bull it's either passed

01:41:00.909 --> 01:41:03.949
down to her family or being passed down to the

01:41:03.949 --> 01:41:06.470
existing company structure and in this case he

01:41:06.470 --> 01:41:10.229
passed down to the family and he's his son if

01:41:10.229 --> 01:41:14.210
you remember he's a eldest son originally had

01:41:14.210 --> 01:41:17.510
2 % of the company. And Chaleo passed on the

01:41:17.510 --> 01:41:22.710
remaining 49%, which makes the first son a 51

01:41:22.710 --> 01:41:26.789
% shareholder of the company. Of the Austrian

01:41:26.789 --> 01:41:29.430
Red Bull company, right? Yes, that's right. So

01:41:29.430 --> 01:41:31.609
there's three companies, just to reiterate. There's

01:41:31.609 --> 01:41:35.069
the Thai company called TCP. There's the Austrian

01:41:35.069 --> 01:41:38.729
company, which is just Red Bull. Red Bull, Austria.

01:41:39.430 --> 01:41:44.189
And then there's the Chinese JV, which is called

01:41:44.189 --> 01:41:48.670
Red Bull Vitamin, I think, which is four companies

01:41:48.670 --> 01:41:53.029
in a JV. The first son got 51 % of Austria. Austria,

01:41:53.289 --> 01:41:57.270
yes. And then the second son got, I think he

01:41:57.270 --> 01:41:59.670
got TCP in Thailand. Right, right, right. Which

01:41:59.670 --> 01:42:03.130
at that time, Red Bull was not even... the top

01:42:03.130 --> 01:42:06.029
of the market. It was number three. And Thailand

01:42:06.029 --> 01:42:09.729
is a much, much smaller market in terms of energy

01:42:09.729 --> 01:42:15.010
drinks. And he also got the whatever share that

01:42:15.010 --> 01:42:20.270
they agreed on in the Chinese JV. I mean, it's

01:42:20.270 --> 01:42:22.229
still generating a lot of money because it made

01:42:22.229 --> 01:42:25.289
Yen being the fourth richest guy. So I'm assuming

01:42:25.289 --> 01:42:28.470
the Thai shareholder, which is now his second

01:42:28.470 --> 01:42:31.970
son, also gets his dividend. But I guess you

01:42:31.970 --> 01:42:33.850
want more control or you want more ownership.

01:42:34.189 --> 01:42:41.109
So that didn't fly. So 2016, he started thinking,

01:42:41.289 --> 01:42:44.130
well, the second son started thinking. His name

01:42:44.130 --> 01:42:48.210
is Saravut Ividya. He kind of initiated a bunch

01:42:48.210 --> 01:42:52.890
of legal cases, lawsuits that lasted until today

01:42:52.890 --> 01:42:56.869
that are still, I think it's a bit complicated.

01:42:56.890 --> 01:43:02.189
But if I were to summarize in short, He tried

01:43:02.189 --> 01:43:06.510
to sue, but obviously there's a couple of times

01:43:06.510 --> 01:43:10.569
that Yanbing Rain Group Court wanted to appeal.

01:43:11.149 --> 01:43:14.010
Even after going into Supreme Court, there's

01:43:14.010 --> 01:43:16.810
kind of new evidence coming into place. So when

01:43:16.810 --> 01:43:19.250
they first went into court, there wasn't even

01:43:19.250 --> 01:43:21.369
the 50, he couldn't find the 50 -year agreement.

01:43:22.199 --> 01:43:24.560
How conveniently. Yeah, he couldn't find the

01:43:24.560 --> 01:43:28.020
50 -year agreement. And so later on, it's only,

01:43:28.039 --> 01:43:33.220
I think, 2020 or 2019 that they supplied more

01:43:33.220 --> 01:43:36.640
evidence around the initial agreement. And at

01:43:36.640 --> 01:43:40.380
first, they submitted a photocopy of the 50 -year

01:43:40.380 --> 01:43:42.739
contract, the Reinwerker bei Yanbing. But it

01:43:42.739 --> 01:43:44.500
wasn't the original copy. It wasn't the original.

01:43:44.539 --> 01:43:48.260
And the court went back deciding that they're...

01:43:48.399 --> 01:43:51.359
They're going to second the original ruling,

01:43:51.439 --> 01:43:55.060
which ruled in favor of TCP, so the Thai company.

01:43:55.300 --> 01:43:57.899
A few months later, Yan Bing came back with the

01:43:57.899 --> 01:44:01.100
original. And continued to appeal. Right. But

01:44:01.100 --> 01:44:03.739
the thing is, the original was signed by not

01:44:03.739 --> 01:44:07.829
Cha Leo, but the mom. Also very tricky. It's

01:44:07.829 --> 01:44:09.590
just everything's tricky. And now they're going

01:44:09.590 --> 01:44:12.449
through forensic analysis of the handwriting.

01:44:12.930 --> 01:44:15.949
And at the same time in China, actually there's

01:44:15.949 --> 01:44:20.250
provincial courts that also can rule kind of

01:44:20.250 --> 01:44:25.609
within their jurisdiction. So TCP sued Yan Bing's...

01:44:25.880 --> 01:44:28.760
ryanwood in or the jv in every single province

01:44:28.760 --> 01:44:31.300
that they can they can think of in some province

01:44:31.300 --> 01:44:33.600
and for the most part the provincial courts obviously

01:44:33.600 --> 01:44:36.479
would align with the chinese supreme supreme

01:44:36.479 --> 01:44:39.840
court but for a few provinces they were like

01:44:39.840 --> 01:44:43.939
oh you know makes sense uh yeah we agree with

01:44:43.939 --> 01:44:46.819
the chinese company with the chinese jv 50 years

01:44:46.819 --> 01:44:52.000
valid and so to this day There hasn't been a

01:44:52.000 --> 01:44:54.220
settlement. There hasn't been a final decision.

01:44:54.300 --> 01:44:56.640
I think for the most part, we can agree that

01:44:56.640 --> 01:45:00.279
TCP has won the case. So it's inconclusive? It's

01:45:00.279 --> 01:45:04.460
inconclusive in terms of who really has the ownership.

01:45:04.880 --> 01:45:10.760
But monetary -wise, Yanbing Rainwood is still

01:45:10.760 --> 01:45:15.060
selling majority. Or selling way more of cans.

01:45:15.319 --> 01:45:18.779
Right. And that's because TCP only started going

01:45:18.779 --> 01:45:22.420
into the market in 2019. Do we want to talk about

01:45:22.420 --> 01:45:27.619
the different cans? We can at least find three

01:45:27.619 --> 01:45:30.539
different packagings. Yes. Yeah, right? Yeah.

01:45:30.640 --> 01:45:36.539
So the one that is most common is... The yellow

01:45:36.539 --> 01:45:40.800
gold cans? The gold cans. Yes. So the cans that

01:45:40.800 --> 01:45:43.079
we grew up with is this can. It's the Rhinewood

01:45:43.079 --> 01:45:45.399
can. It's the gold one. And on the bottom, it

01:45:45.399 --> 01:45:49.960
would just say Red Bull vitamin drink. And when

01:45:49.960 --> 01:45:53.399
TCP entered the market in 2019, they had the

01:45:53.399 --> 01:45:56.100
exact same look, but with two different other

01:45:56.100 --> 01:45:59.100
labels. One is, I guess you can call it like

01:45:59.100 --> 01:46:01.890
your Coke light version. Coke Zero version. So

01:46:01.890 --> 01:46:05.430
your Zero Caffeine version, which is just vitamin

01:46:05.430 --> 01:46:09.270
flavored. And then the other one is not, before

01:46:09.270 --> 01:46:11.909
it was called the Energy Drink and Rebel Energy

01:46:11.909 --> 01:46:14.149
Drink. And now it's called the Rebel Tolerant

01:46:14.149 --> 01:46:17.109
Drink just to tell people that it has more kick.

01:46:17.109 --> 01:46:21.489
Ingredients. Yeah. Unless you read every single

01:46:21.489 --> 01:46:25.829
font six. The two characters that's different

01:46:25.829 --> 01:46:29.189
on the bottom of the can. Everything else looks

01:46:29.189 --> 01:46:33.569
the same. Yeah. And on top of that, there is

01:46:33.569 --> 01:46:36.550
also the blue can. Right. And this is new, actually.

01:46:36.729 --> 01:46:38.529
This is quite new. There are at least two different

01:46:38.529 --> 01:46:42.529
types of blue can. One is the Austrian blue can.

01:46:42.649 --> 01:46:46.630
Right. That is being imported. Yes. And the exporter

01:46:46.630 --> 01:46:52.710
for the Austrian can is AB InBev. This blue can...

01:46:52.710 --> 01:46:56.710
Which looks... Not exactly like the Austrian.

01:46:56.789 --> 01:46:59.010
So the Austrian can is like you have a diagonal

01:46:59.010 --> 01:47:02.550
and like a line in the middle and then a diagonal

01:47:02.550 --> 01:47:04.770
and then it's blue, silver, silver, blue, right?

01:47:04.829 --> 01:47:09.649
We're such good fans. And then this one, it's

01:47:09.649 --> 01:47:12.869
not like you don't have to look carefully. Yeah,

01:47:13.050 --> 01:47:16.590
it's like an obvious copycat with just kind of

01:47:16.590 --> 01:47:19.069
a blue square in the middle with a Red Bull logo.

01:47:19.850 --> 01:47:22.770
Follows the color scheme, but the arrangement

01:47:22.770 --> 01:47:26.439
is very different. So it's easier to tell the

01:47:26.439 --> 01:47:28.939
difference with the blue can compared to the

01:47:28.939 --> 01:47:32.560
gold cans. So I guess, listeners, if you ever

01:47:32.560 --> 01:47:35.800
made your way to China, I would highly recommend

01:47:35.800 --> 01:47:40.460
that you come try and taste all the Red Bulls

01:47:40.460 --> 01:47:42.699
that you can find. In your part of the world,

01:47:42.779 --> 01:47:45.939
it typically is a fizzy drink. Yep, carbonated.

01:47:46.079 --> 01:47:50.880
Carbonated. And here in China, most of the Red

01:47:50.880 --> 01:47:53.430
Bulls are... not carbonated including this blue

01:47:53.430 --> 01:47:56.210
can that we just opened so up until today uh

01:47:56.210 --> 01:48:00.750
for that lawsuit uh it's still ongoing so i think

01:48:00.750 --> 01:48:02.930
the supreme court made their decision but then

01:48:02.930 --> 01:48:06.390
the provincial stuff is ongoing sure and um and

01:48:06.390 --> 01:48:09.350
i was really surprised when we got these cans

01:48:09.350 --> 01:48:13.130
we got what three different types of cans from

01:48:13.130 --> 01:48:15.750
the two different companies right and usually

01:48:16.520 --> 01:48:18.640
the same distribution channel would only carry

01:48:18.640 --> 01:48:22.119
one or the other. And because the Supreme Court

01:48:22.119 --> 01:48:26.119
ruled in favor of TCP, most of the online channels

01:48:26.119 --> 01:48:31.560
like Taobao and Jingdong, they only carry the

01:48:31.560 --> 01:48:35.460
TCP version. And so I would imagine that there's

01:48:35.460 --> 01:48:38.039
actually more sales in TCP, but it turns out

01:48:38.039 --> 01:48:40.680
that they have probably not even as half as much.

01:48:40.979 --> 01:48:43.539
So the overall sales volume, if you remember,

01:48:43.619 --> 01:48:47.159
they peaked at 23 billion. for Yan Bing's group,

01:48:47.319 --> 01:48:52.399
I guess the original Chinese red bull. It's still

01:48:52.399 --> 01:48:55.560
roughly around $20 billion. The market has grown.

01:48:55.739 --> 01:48:58.800
So for 15 years, they haven't really grown their

01:48:58.800 --> 01:49:03.100
can or their revenue. But they haven't lost,

01:49:03.239 --> 01:49:08.149
I guess, as much as I expected. But their share

01:49:08.149 --> 01:49:12.029
did go down from 80 % in 2015 to about 30 -something

01:49:12.029 --> 01:49:15.890
percent in today. And there's another about,

01:49:15.970 --> 01:49:19.930
I think, 10 % or so that are captured by the

01:49:19.930 --> 01:49:24.510
other Red Bull, which is TCP. 10 to 15%, I would

01:49:24.510 --> 01:49:29.930
say. So where did the other part go, right? You

01:49:29.930 --> 01:49:33.510
know the answer. Well, since Red Bull targets...

01:49:34.350 --> 01:49:38.390
a high -end market, there will always be someone

01:49:38.390 --> 01:49:42.949
who will try to monopolize the lower -end energy

01:49:42.949 --> 01:49:45.890
drink market, which is the player that we've

01:49:45.890 --> 01:49:48.710
discovered. So Red Bull in China is actually

01:49:48.710 --> 01:49:51.329
mid -market. But then there's always like the

01:49:51.329 --> 01:49:54.109
bottom. Of course, the scale, scale market. The

01:49:54.109 --> 01:49:57.890
scale, scale market, which is called, I don't

01:49:57.890 --> 01:50:00.550
know if they have an English name. But in China,

01:50:00.550 --> 01:50:03.250
it's called Dong Peng Te Yin. Yeah. And they

01:50:03.250 --> 01:50:08.350
started actually in 2003. But they really kicked

01:50:08.350 --> 01:50:11.510
off after Red Bull started their internal battles

01:50:11.510 --> 01:50:14.310
with each other. So they benefited from the whole

01:50:14.310 --> 01:50:18.800
TCP versus Ren Group. Right. Yeah, a Ryan Wood

01:50:18.800 --> 01:50:21.939
group. The whole Red Bull story has been, Chaleo

01:50:21.939 --> 01:50:23.619
had a really good relationship with Yanbian.

01:50:23.659 --> 01:50:25.619
Say, hey, why don't you take Red Bull to China?

01:50:25.760 --> 01:50:28.020
We're happy to do it. And it keeps going, keeps

01:50:28.020 --> 01:50:31.000
going until Chaleo passed away. And the second

01:50:31.000 --> 01:50:32.819
son is like, oh, hey, I want to be in this market.

01:50:33.000 --> 01:50:36.460
And so he came, brought TCP. And then later on,

01:50:36.460 --> 01:50:38.319
the Austrian market is like, hello, guys, here

01:50:38.319 --> 01:50:41.539
I come. I want to be selling here as well. Came

01:50:41.539 --> 01:50:44.619
with AB and Bev. And all the Chinese and TCP

01:50:44.619 --> 01:50:46.699
is like, oh, well, there are way too many versions.

01:50:47.020 --> 01:50:48.840
we need to legitimize ourselves and continue

01:50:48.840 --> 01:50:51.319
to try to establish. I think all of these is

01:50:51.319 --> 01:50:54.260
trying to prove that. the energy drink market

01:50:54.260 --> 01:50:56.880
in China is not penetrated at all. It's not penetrated

01:50:56.880 --> 01:50:59.600
and it's kind of a free -for -all. Yeah. And

01:50:59.600 --> 01:51:02.460
you know what Yan Bing did after his whole lawsuit

01:51:02.460 --> 01:51:06.659
and he lost the lawsuit? He used Ryan Wood to

01:51:06.659 --> 01:51:10.399
create another energy brand called War Horse.

01:51:10.619 --> 01:51:13.859
Zhang Ma. Zhang Ma, which is like... Similar.

01:51:13.880 --> 01:51:17.319
Similar in terms of like bull horse. In all this

01:51:17.319 --> 01:51:20.960
time, we'll wear Red Bull in China's losing market

01:51:20.960 --> 01:51:25.250
share. Dongpeng has went from 10 % to almost,

01:51:25.409 --> 01:51:28.590
I think right now it's at 35 % of market share.

01:51:29.189 --> 01:51:32.590
And they, rather than use a tin can, they use

01:51:32.590 --> 01:51:36.569
plastic. And so that cuts down cost by significantly.

01:51:37.489 --> 01:51:40.170
Like Monster to Red Bull in the States, they

01:51:40.170 --> 01:51:43.319
double the can size, obviously. there's a group

01:51:43.319 --> 01:51:45.520
of people that are going to go for the bigger

01:51:45.520 --> 01:51:47.840
can. And there's no difference in terms of ingredients

01:51:47.840 --> 01:51:50.840
fundamentally, right? Another product market

01:51:50.840 --> 01:51:53.460
fit story, trying to find what's the best for

01:51:53.460 --> 01:51:57.140
the everyday mass market for the Chinese audience.

01:51:57.560 --> 01:52:00.119
Do you know what other drinks that they try to

01:52:00.119 --> 01:52:04.140
bring into China? I think like the mineral water.

01:52:04.420 --> 01:52:06.279
You're onto the right track. Do you remember

01:52:06.279 --> 01:52:09.100
the name? It's a Norwegian fortified water. It's

01:52:09.100 --> 01:52:12.180
Voss, right? Yes, it's Voss. I was so surprised.

01:52:13.279 --> 01:52:16.079
But he licensed it? Did he license it for 50

01:52:16.079 --> 01:52:20.439
years? You know what? I think it's worthy to

01:52:20.439 --> 01:52:22.279
ask that question to the legal department of

01:52:22.279 --> 01:52:23.840
Runwood. Maybe they have learned the lessons.

01:52:24.159 --> 01:52:29.079
And besides that, Coco Vita is also another brand

01:52:29.079 --> 01:52:31.039
that they've licensed and paired up. Where are

01:52:31.039 --> 01:52:34.539
they originally from? Do you know? I think it

01:52:34.539 --> 01:52:37.119
was recently incorporated in Hong Kong, but maybe

01:52:37.119 --> 01:52:40.569
an American brand. Coco Vita. And Boss. These

01:52:40.569 --> 01:52:43.510
are the two most noticeable brands that they've

01:52:43.510 --> 01:52:46.130
decided to, I guess, reuse all the distribution

01:52:46.130 --> 01:52:49.289
channels that they have, which makes sense. Last

01:52:49.289 --> 01:52:57.529
bit. Let's just wrap up and share a bit of what

01:52:57.529 --> 01:53:01.649
we think. could be the future for Red Bull. Wow.

01:53:01.989 --> 01:53:03.770
No, no, no. Well, I'm not trying to like, yeah,

01:53:03.850 --> 01:53:05.670
they're not a publicly traded company. So this

01:53:05.670 --> 01:53:07.149
doesn't mean that, you know, like it's going

01:53:07.149 --> 01:53:09.329
to rise and fall. But just casually, also like

01:53:09.329 --> 01:53:11.609
this is very anthropological, just who are the

01:53:11.609 --> 01:53:13.609
people who are still involved in this game. Right.

01:53:13.689 --> 01:53:15.949
Let's look at the younger folks who are still

01:53:15.949 --> 01:53:17.949
in the family and those who inherited the company

01:53:17.949 --> 01:53:23.600
as CEOs and CFOs. So Chaleo passed. a lot of

01:53:23.600 --> 01:53:30.600
kids 11 11 i don't know so the first son claims

01:53:30.600 --> 01:53:35.260
51 of the company now one of the richest thai

01:53:35.260 --> 01:53:39.220
if not the richest if not the he's he's there

01:53:39.220 --> 01:53:42.479
he's doing well yeah second son tcp and also

01:53:42.479 --> 01:53:45.220
collaboration with china yeah and some of the

01:53:45.220 --> 01:53:50.039
other uh children are also doing either family

01:53:50.039 --> 01:53:53.579
hospital, real estate, property developer, or

01:53:53.579 --> 01:53:57.060
Red Bull social relations director. So they're

01:53:57.060 --> 01:54:00.119
all sort of involved in the business. Matishes

01:54:00.119 --> 01:54:03.300
also has a son and only has one son. And his

01:54:03.300 --> 01:54:07.039
name is Mark Matishes. He was born in 1992. Yeah.

01:54:07.119 --> 01:54:10.520
Currently holds 49 % of the Austrian Red Bull.

01:54:10.920 --> 01:54:14.229
Right. Also doing a bunch of other things. He

01:54:14.229 --> 01:54:16.390
has his own company. He has his own drink company.

01:54:16.489 --> 01:54:21.350
And that company is called Thalheimer Helvasse,

01:54:21.390 --> 01:54:24.590
which is a drink company that produces beer and

01:54:24.590 --> 01:54:28.250
lemonade and water from Austria's oldest springs.

01:54:28.729 --> 01:54:33.409
Interesting. So he decided not to operate Red

01:54:33.409 --> 01:54:36.609
Bull. I think when Matisse, or the senior, passed

01:54:36.609 --> 01:54:41.760
away, he gave... Or he allocated a three people

01:54:41.760 --> 01:54:44.100
management team. That's right. Right. So his

01:54:44.100 --> 01:54:47.239
son's actually not doing active management. As

01:54:47.239 --> 01:54:49.539
a shareholder and also on the board, but the

01:54:49.539 --> 01:54:53.859
management is being put on the CEO, CFO, and

01:54:53.859 --> 01:54:55.840
here is... The sporting director. Yeah, and then

01:54:55.840 --> 01:54:58.960
the last person is titled as the CEO of Corporate

01:54:58.960 --> 01:55:01.659
Projects and Investment. Okay. So... So everything's

01:55:01.659 --> 01:55:03.680
sports, I think. Everything's sports. And media.

01:55:03.739 --> 01:55:06.460
Precisely. Yeah. The CEO of the beverage business

01:55:06.460 --> 01:55:13.100
is Franz Waslawik. Okay. Sorry. Sorry if I mispronounced

01:55:13.100 --> 01:55:15.359
that name. And so still very much involved in

01:55:15.359 --> 01:55:19.000
the... beverage business. Alexander Kirchmeyer

01:55:19.000 --> 01:55:22.439
is the CFO of the business, head of the beverage

01:55:22.439 --> 01:55:25.819
business in terms of finance since 2008. And

01:55:25.819 --> 01:55:28.619
he's also very much involved in the F1 teams

01:55:28.619 --> 01:55:31.859
and F1 spendings. And this last person I think

01:55:31.859 --> 01:55:33.920
is the most interesting one. His name is Oliver

01:55:33.920 --> 01:55:40.619
Mintzlaff. He used to be served as the global

01:55:40.619 --> 01:55:45.739
head of sales since 2018 for Red Bull. And also

01:55:45.739 --> 01:55:48.859
previously as the boss of Red Bull Germany. Yep.

01:55:49.560 --> 01:55:52.939
The football team. Yes. Okay. He was the CEO

01:55:52.939 --> 01:55:57.600
of RB Leipzig. Maybe he will be doing more things

01:55:57.600 --> 01:56:00.500
along the football and soccer. Yeah. It's so

01:56:00.500 --> 01:56:03.119
profitable right now that I don't see why not.

01:56:03.260 --> 01:56:06.550
So that's the three. people team that he still

01:56:06.550 --> 01:56:10.170
have on the remaining of the Red Bull. Let's

01:56:10.170 --> 01:56:12.470
look at the competitor, Monster. Even though

01:56:12.470 --> 01:56:14.289
it is a publicly traded company, but they're

01:56:14.289 --> 01:56:16.949
also facing a succession issue. Monster's current

01:56:16.949 --> 01:56:19.550
co -founders are about 70 years old. Oh, okay.

01:56:19.670 --> 01:56:21.989
Yeah. So I have to find out what to do with it,

01:56:22.010 --> 01:56:25.689
but we don't know. But I mean, so Red Bull changed

01:56:25.689 --> 01:56:29.649
management in two years, three years ago, right?

01:56:30.800 --> 01:56:33.399
And so far, it's been holding us forward, I think,

01:56:33.460 --> 01:56:36.340
still, with Monster. I mean, Max Verstappen is

01:56:36.340 --> 01:56:41.340
still winning. Now is a different time. But last

01:56:41.340 --> 01:56:43.100
year, he was doing okay. Yeah, but still, they're

01:56:43.100 --> 01:56:47.840
definitely in the top teams. And obviously, with

01:56:47.840 --> 01:56:51.159
the popularity of F1 growing right now with the

01:56:51.159 --> 01:56:54.619
Hollywood movie, I can see that investment still

01:56:54.619 --> 01:56:58.119
continue to, I guess, benefit Red Bull. The football

01:56:58.119 --> 01:57:02.119
is benefiting Red Bull. I feel like even with

01:57:02.119 --> 01:57:07.720
Matusha's passing away, the company is so far

01:57:07.720 --> 01:57:11.800
in good hands. We're not seeing significant issues,

01:57:12.020 --> 01:57:16.260
right? On the other hand, with the Chinese company,

01:57:16.399 --> 01:57:19.699
there is definitely a significant issue in terms

01:57:19.699 --> 01:57:24.039
of market share, in terms of having... Dongpeng

01:57:24.039 --> 01:57:26.819
is just one of the competitors, the biggest one

01:57:26.819 --> 01:57:29.680
eating away their revenue. So that's a very...

01:57:30.319 --> 01:57:33.340
a much tougher situation much tougher situation

01:57:33.340 --> 01:57:35.439
yeah and you don't have all the sports ownership

01:57:35.439 --> 01:57:38.199
and everything they went with the monster traditional

01:57:38.199 --> 01:57:42.020
sponsorship reseller kind of model right so I

01:57:42.020 --> 01:57:46.479
think so my opinion is the Austrian Red Bull

01:57:46.479 --> 01:57:49.399
will continue its trajectory for the for the

01:57:49.399 --> 01:57:52.159
time being yeah for the time being I think it

01:57:52.159 --> 01:57:55.529
will hold its forts with monster tech, trying

01:57:55.529 --> 01:57:58.689
to get more out of it. But so far, what I'm seeing

01:57:58.689 --> 01:58:01.029
in the rev share and everything, they seem to

01:58:01.029 --> 01:58:03.310
be holding their fort. And their primary goal

01:58:03.310 --> 01:58:07.829
is to maintain rather than, I think, grow significantly

01:58:07.829 --> 01:58:10.109
in their market share. And that's already good

01:58:10.109 --> 01:58:13.390
enough for profitability, right? Versus in China,

01:58:13.430 --> 01:58:17.970
I feel like there's a bit more urgency. The competition

01:58:17.970 --> 01:58:21.569
is very fierce and it's very chaotic. And Ryan

01:58:21.569 --> 01:58:25.340
Wood is facing... Almost an internal fight between

01:58:25.340 --> 01:58:30.159
like among all the license holders and also very

01:58:30.159 --> 01:58:33.220
fierce competition from the attack from the bottom.

01:58:33.399 --> 01:58:37.399
Yeah. And so we'll see how they will pan out.

01:58:37.520 --> 01:58:41.319
This story has been one of my favorite stories

01:58:41.319 --> 01:58:45.000
spanning across like eight parts of Asia. to

01:58:45.000 --> 01:58:49.119
Europe and then coming back to Asia. And FMCG

01:58:49.119 --> 01:58:54.100
moves very fast. And all three man CEO that we've

01:58:54.100 --> 01:58:57.000
talked about, they're all quite inspiring in

01:58:57.000 --> 01:58:59.779
their own ways. And maybe especially managers

01:58:59.779 --> 01:59:03.140
that he is a marketing genius. I think all of

01:59:03.140 --> 01:59:07.640
them. they shared same visions on how they want

01:59:07.640 --> 01:59:11.800
to position that very brand new energy drink

01:59:11.800 --> 01:59:15.420
in their specific market. I think the game will

01:59:15.420 --> 01:59:21.939
continue and I really look forward to more, I

01:59:21.939 --> 01:59:24.640
guess, innovation that is coming from Red Bull.

01:59:24.800 --> 01:59:27.649
All three companies are doing... different types

01:59:27.649 --> 01:59:31.449
of innovations in terms of the sponsorship, the

01:59:31.449 --> 01:59:35.850
talents, and even the business model. And for

01:59:35.850 --> 01:59:38.890
listeners, for you, if you ever had the chance

01:59:38.890 --> 01:59:45.050
to come to Asia, maybe try a different type of

01:59:45.050 --> 01:59:48.729
Red Bull. There is a building called the Ryan

01:59:48.729 --> 01:59:52.550
Wood Center in Beijing. And if you ever get to

01:59:52.550 --> 01:59:55.779
pass by, this place and you're just so curious

01:59:55.779 --> 01:59:59.060
about the life of red bull maybe go to the first

01:59:59.060 --> 02:00:04.220
floor there is a wall of photos of how Yanbin

02:00:04.220 --> 02:00:08.640
started Red Bull in China in 1995. Fascinating.

02:00:08.699 --> 02:00:11.840
A wall of history. I had a conference there a

02:00:11.840 --> 02:00:14.680
long time ago and just walked into this wall

02:00:14.680 --> 02:00:17.000
and I find it to be weird and later on it made

02:00:17.000 --> 02:00:21.939
total sense. Yeah. Wow. Yeah. We should, I've

02:00:21.939 --> 02:00:23.920
never been, we should go for a field trip. We

02:00:23.920 --> 02:00:26.060
should go and we should continue to watch F1.

02:00:26.359 --> 02:00:31.399
I will definitely. Listeners, I guess if there's

02:00:31.399 --> 02:00:35.619
any more FM stuff cg brands or tech brands or

02:00:35.619 --> 02:00:37.939
any company that you're interested about asia

02:00:37.939 --> 02:00:41.739
send us a note and thank you for listening thank

02:00:41.739 --> 02:00:42.539
you for listening