Can Monster Energize Coca-Cola?

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Aug. 15 (Bloomberg) –- Bloomberg’s Claire Suddath and Duane Stanford discuss Coca-Cola taking a 17 percent share in Monster Beverage and the regulation of energy drinks. They speak on “Street Smart.” (Source: Bloomberg)

Could revitalize coke's struggling sales.

You did a huge cover story on the fact that soda is not something americans are drinking so much anymore.

It was called "coke's big fat problem." is this going to help solve it?

It may.

People have been moving away from soda in general.

The one carbonated beverage growing has been energy drinks.

They were up 5% last year.

This company has had webad p.r. around energy drinks.

Nevertheless, coke is making this move.

That is right.

Some of our reporting has revealed there has been a debate on the board as to whether they wanted to take this risk with energy drinks.

Regulators have been looking at energy drinks trying to figure out if there's too much caffeine, isn't harming children or young people who drink too much of this, are there health risks?

Taking a stake in the company rather than buying the whole thing is a way to manage that risk to some degree.

I did talk to the ceo's of both companies yesterday.

They were on a media call.

They said they seemed to be comfortable with the regulatory lift at this time.

They get not just a monster but hansen.

Tell me what that brings to the table.

Coca cola will pick up those soft rinks -- soft drinks, the non-energy portfolio.

Those will complement coke's portfolio of other soft drinks.

Some are natural and fit into categories people are moving to when they do drink soft drinks.

It is the big macro sugary brands with artificial sweeteners that are struggling in the u.s. that gives coke some firepower there as well, although it is a much smaller niche.

Back to coke expanding itself, what is interesting about monster, i was traveling recently and in a convenience store in a remote part of new england.

I stumbled across the monster energy beverages.

I saw these kids, they were probably 12 and 14 years old.

They were pointing at it and saying, "this is monster!" they were really excited about it.

Clearly, this is a brand resonating with youth, which i imagine is exactly who coca cola wants to target.

Coke has struggled to get the youth market.

Energy drinks, when you're young you want a drink not allowed by parents.

If they don't want you to drink soda, they don't want you to drink energy drinks.

The branding is young.

It is cool.

It is popular with high school and college students, the millennials.

It has a great name.

Could this help turn coca cola around?

Soft drinks have been in trouble.

Energy drinks are soft drinks.

They are just lower carbonated soft drinks.

This is an opportunity for coke to reach the demographic it used to get with its main soft drink a while back.

This is being able to get a bigger piece of the pie.

Coke already distributes monster and half the country and anheuser-busch distributes the other half.

This will give coke access to the entire country.

More importantly, it gives them access to expansion overseas.

Coke will try to move this into bottlers and produce it overseas.

Over time, they will be able to get a bigger piece of the prophet.

Maybe they will even buy it someday.

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This text has been automatically generated. It may not be 100% accurate.


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