What's Behind Coke's Monster Mask?
So Coca-Cola Co. is taking a 17 percent stake in the energy-drink maker, Monster Beverage Corp., the company that markets its ubiquitous rocket fuel in those Matrix-like, green-and-black cans.
As my colleague Leonid Bershidsky pointed out today, there are myriad health risks for consumers -- especially kids -- in Monster's products. Coke's involvement means it's going to be even harder to regulate Monster's beguiling brews.
But what really puts a bad taste in my mouth about the news is how Coke managed to become a bigger player in the booming energy-drink market without seeming to tarnish its legendary brand. (Sing it to yourself, now: "It's the real thing.")
Coke's deal is, of course, an effort to offset declining soft-drink sales. Americans just aren't drinking as much Coke anymore. Soda sales dropped 3 percent last year, while energy drink sales increased by more than 4 percent, according to Beverage Digest. Monster, with a 34 percent share of the energy drink market, gives Coke exposure to the fast-growing sector.
But the deal also may offer a way for Coke to avoid staining its brand's image, which has already taken a hit from health-care advocates and nutritionists concerned about the toll its sugary drinks take on our bodies.
As part of the agreement, Coke gets to offload its energy drinks -- including such hyperventilating brands as Full Throttle, Relentless and Burn -- to Monster. In exchange, Monster gives Coke a bevy of bucolic drinks, including Hansen's Natural Soda, Hansen's Natural Juice, Peace Tea and Hubert's Lemonade.
By placing all of its high-caffeine drinks under Monster's corporate umbrella, Coke has niftily linked some of the controversial beverages it helps peddle to a different brand. Presto, Coke gets to have its Monster, and drink it, too.
Coke has tried to diversify before, by acquiring "healthy" options such as Honest Tea, Fuze Tea and Zico coconut water. It's also invested in coffee-maker Keurig Green Mountain, amassing a 16 percent stake since January in a move to get into do-it-yourself carbonation machines and compete with the popular SodaStream.
Behind some of Coke's bright, shiny labels are ... smoke and mirrors. Coke's Fruitwater, launched in 2013, contains no fruit. Vitaminwater, which Coke purchased in 2011, has few vitamins. There's a lawsuit that argues Coke hoodwinked consumers by marketing Vitaminwater as healthy even though it contains almost as much sugar as a 12-ounce can of Coke. Coke has denied any deception.
The Monster deal offers another example of Coke playing something of a shell game with its brands. So for anyone picking through the range of branded beverages on Coke's (or Monster's) shelves, a bit of advice: Don't let all of those well-branded bubbles go to your head.
Corrects description of Vitaminwater in ninth paragraph.
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Timothy L O'Brien at firstname.lastname@example.org