Why Red Bull Sells Energy, Not Energy Drinks

This one starts with a tired businessman in a taxi and ends with Formula One dominance, space jumps, and one of the most powerful lifestyle brands on the planet. ☕️🥤

We crack open the surprisingly wild story behind Red Bull, from its roots as a Thai roadside tonic for truck drivers to becoming a global brand selling billions of cans worldwide. We follow Austrian marketer Dietrich Mateschitz from the moment he discovered “Krating Daeng” during a jet lagged trip, through years of experts insisting there was no market for energy drinks, to building a company that completely rewrote the rules of branding.

This isn’t just about a fizzy drink. We get into how Red Bull sold identity, adrenaline, and lifestyle instead of ingredients, sponsoring extreme sports, creating its own outrageous events, and somehow turning a Formula One team bought for $1 into a dominant force on the grid.

We also dive into some of Red Bull’s boldest moments, including the Stratos space jump, the ongoing debates around energy drinks and health, and why Mateschitz refused to take the company public in order to protect long term brand building over quick shareholder wins.

From marketing genius to modern mythology, this conversation explores how Red Bull became far bigger than a drink, and whether the brand can keep its wings without the visionary founder who built the empire.

About Simon and Danielle:

Simon and Danielle are both business owners, based in the East Midlands, who met through mutual business contacts and who share a love of all things business. 

Simon runs Skylight Media – Award-winning experts in Website Design, E-commerce & Marketing running since 2003.

Danielle runs Goldspun Support – a multi-faceted support service for fractional directors and small business owners across the globe, running since 2009.

Since they first met Simon and Danielle have spent a ridiculous amount of time talking about the subjects that interest them – usually over a drink in the pub – and they decided that now was the time to bring these conversations to a wider audience and invite them to join the chat. 

Both Simon and Danielle are successful business owners in their own rights with big plans for the future but will never lose their love of talking all things business… and the pub.

Transcript

Hi, I'm Danny,
and I'm Si. Welcome to Business in the Brew, a podcast dedicated to winfrings business with the occasional copper.
You take a business story, theory, or something we just want to chat about. In debate, adjusting on our own special personality and sense of humor, combined with our experience and knowledge, we're both business graduates and have run our own businesses for many years. We can't wait to listen, we Oh no, we talked about this morning. Winking and gunning is the reserve of creepy, creepy men. Are you a creepy creepy man?
Absolutely not.
Right, today I'm going to talk to you about a weird Thai drink. I know I didn't realize this either.
It's
Thai, Thai, as in land, yeah, it's not Thai anymore, but it came from Thailand anyway. So, think.. no, don't think I've changed mine. I'm gonna go a different way. In 1982 there was an Austrian marketing executive, and I'm very sorry to this chap, because there's no way I'm getting this right. Dietrich Mate Schwitz,
have you got that in front of me?
I have got it in front of me. Don't try, Dietrich. I
got right,
mate, shit.
Well, that's what I thought it said, but I didn't want to say that. So, maybe we'll just call him Dietrich. Is
stifling a laugh at the moment. Hem,
so we're just going to call him Dietrich. Yeah, so an Australian marketing executive named Dietrich flew to Thailand on a business trip. He landed exhausted and jet-merged, and his taxi driver handed him a small bottle of a local tonic drink. Again, pronunciation crating dang.
Go on, let me have a look.
It's Thai, remember? It
looks like
it. Yeah,
we'll get a cracking dame, which translates from Thai as can you guess,
not Red Bull,
yeah, that's right. It translates from time to ripple. He perked up immediately, and something in his brain clicked. He spent the next three years being told by every marketing expert, focus group, and distributor he approached that his idea would never work. The can was too small, the taste was too medicinal, the price was too high, and energy drinks do not exist as a category in 1982 they didn't,
right,
there's no market for it, he launched it anyway, and today Red Bull sells 12 billion cans a year in over 175 countries, and is worth somewhere in the region of 15 billion pounds,
and the difference between a million and a billion
is zero,
an awful lot
is a lot, yeah. So, before Dietrich Kratt, the tiny drink was already a mass success in Thailand. It being created in the 1970s but oh my god, that's another name by Chalio Rudvich. Why not? A pharmacist and businessman who spotted a market among Thailand's working classes, so your truck drivers, factory workers, your farmers, basically an affordable energy tonic. So the drink contained caffeine, taurine, B vitamins, and a large, large amount of sugar.
Yeah, and taurine is a form of caffeine, I think.
Yes, so it worked in a sort of basic physiological sense.
Taurine, Taurus, hence bull,
correct. Anyway,
yeah.
By the late 1970s it was the best-selling soft drink in Thailand, ahead of Coke and Pepsi. It was cheap, it was functional, it had zero pretension, it was the raw material that Dietrich was working with.
Maybe
sweet had it. It's fascinating. I don't know this either. I thought I don't know why anyone would thought bent of it, but anyway, so the Dietrich approached the pharma system businessman, whose name I can't pronounce, UDVR, with a proposal. He would license the formula, reformulate it for Western tastes, and take it global. They would form a 5050 split company, which is Red Four GmbH, with each putting in around $500,000 a small additional stake went to Yadavier's son, so essentially he had like 51 and Dietrich had 49 The reformulation was significant, so the original was thicker, sweeter, and uncarbonated, which, by the way, Red Bulls grows anyway, but to make it thicker, sweeter, and oh
yeah,
my teeth are aching thinking about it.
It will be very much like medicine, though.
Yes, yeah, yeah, like a syrupy cow pol, almost. So Dietrich worked with food scientists to make it lighter, add carbonation, tone down the sweetness for European palates, but. Iconic slim blue and silver can was designed specifically to look nothing like existing soft drinks, and it was the same size as a red shelf, exactly the same size as a red striped beer can. So, deliberate differentiation from the start.
Amazing,
Austrian food regulators spent years deliberating whether the drink was safe, because at the time taurine was a novel ingredient, and I had to Google accident, really understand what that mean, but it basically means it's not used for human consumption to any specific degree before May 1997 so bits of it were used, but it wasn't really used to any significant degree. Germany,
wait, wait, if it wasn't used for human consumption, was it useful?
Okay, well, I didn't look into that limit, just as limited humans, maybe we feed it to dogs or something to make us crazy. Germany banned Red Bull outright for years, and the ban lasted until 2000 France banned it until 2008 citing health concerns. Denmark banned it, Norway restricted it to pharmacy sales only. Like in the UK, we're just like, no, now shutting boots, it'll be fine. Despite this, Dietrich launched in Austria in 1987 and sales were slow. He and Yudevia Thailand van lost money for the first three years. His advisor suggested cutting losses, and he absolutely refused. He had a thesis about the marketing, and he wanted to test it fully before giving up. It's fascinating.
Yeah,
my paper's very noisy, noisy paper. So, Dietrich's insight was that you don't sell an energy drink by advertising an energy drink, you sell energy, confidence, peak performance, and the lifestyle of people who operate on the edge. So, very much like selling the benefits rather than the features.
Absolutely right. Yeah, there's a whole is they're coming into it from a completely different angle, which I,
at the time, in the 80s,
absolutely, yeah, hadn't been done before. Yeah,
so rather than traditional forms of advertising, he began sponsoring extreme sports that were either amateur or ignored by mainstream sponsors: motocross, windsurfing, cliff diving, formula racing,
mountain biking,
and then he created events that just didn't exist, so you know, the Red Bull Air Race, Red Bull Crash Dice, and Red Bull Rampage - they sound horrendous. I don't know what they are. That seems like there might be a lot of blood in those. You didn't just put a logo on someone else's event; he literally created the events that the logo was intrinsic to the actual, the actual sport, the actual thing, he gave away products at universities and music venues. He built a grassroots adoption amongst 18 to 25 year olds before any mainstream advertising at all. By the time Red Bull ran conventional TV advertising, it already had such powerful word of mouth, it was almost incidental to the brand's growth rather than necessary. So Red Bull entered Formula One as a sponsor before eventually purchasing the I could never say Jaguar, Jaguar, check the car, Jaco,
the car,
Jaguar. Okay, racing team in 2004 for $1 and renaming it Red Bull Racing. Then they added a second team, which is Toro Rosso, which is now Alpha Tory,
Toro Rosso, Red Bull,
correct,
brilliant.
When Alpha Torian is now VCA RB, sexy in 2005 and then proceeded to dominate the sport for consecutive constructors and drivers championships in 2010 2013 with Sebastian Vettel, and then another era of dominance from 2022 with Max Verstappen. So I can say Verstappen really easily, apparently. I can't say anything else in this document
practicing that one.
No, I like Formula One. Yes, I sit at home in the mirror going for Stapan, push Stapan. Can we say it properly? Good. F gives Red Bull something no other platform can: sustained global premium visibility for 24 race weekends a year, associated with the most technically sophisticated, fast, and expensive sport in the world. It's just amazing, and then there's some really weird brand activation stuff, which just amused me. October the 14th, 2012 Oh, there's another name, Felix Baumgartner, stood in a capsule 39 kilometers above the earth's surface and jumped. He broke the speed of sound, the first person to do so in free fall, we set four word records. 8 million people watched live on YouTube, and the event was called Mission Red Bull Stratos.
I remember seeing that
all capitalized as well, which is awful. Every piece of footage, every record, every headline reference, Red Bull, it's estimated to have cost around 50 to $65 million the earned media value, TV coverage, press coverage, was estimated, estimated at several billion. So that return on investment
is
it remains the single most efficient brand activation in advertising history.
Good, great.
And crucially, it was entirely consistent with everything Red Bull had ever done. It wasn't unusual, it wasn't a curve ball for them it was a person doing something extraordinary on the edge, and that's what they were all about. So Dietrich died in October 2022 age 78 At the time, he held 49% of Red Bull GmbH, and had resisted every approach to list the company publicly or sell it. He was famous for a sequel. See, Red Bull never published audited accounts, and at his death, his net worth was estimated approximately 27 billion, making him Austria's wealthiest person.
Yeah, the
question of success and success, succession, and whether Red Bull can maintain its culture and brand discipline without him is genuinely still open now. So, the devia family, who holds the remaining 51% have full influence, and so far their performance has been unaffected. But the product pipeline brand decisions under new leadership will be really interesting, because at the end of the day, the 51% was held by people who, yes, invented it, but not what it is today. They didn't have this vision for the marketing, they didn't have this on the edge thing, they didn't get it to where it is. So it'd be really interesting to see if it's
lofty position. All they have to do is just maintain market share through doing what they're doing at the moment. It's almost as if nothing can come near it.
Well, that's not true necessarily, is it? Because other players will
market
almost, almost as if, because whatever they're doing, they're doing right.
Yeah, and it'll just be really interesting to see what happens next. I mean, are they going to sell at 49%
Do
they? I just don't know. I think it's really interesting. And now I'm fascinated. I'm gonna spend all my time watching them.
Did you get any, any, any inkling of any skeletons? And
literally none. It literally just seemed to be an absolute stellar story of, I mean, he invested. It's not like it was career marketing. I wouldn't say he did it cheaply or anything, but he did it in such an intentional, unusual way for the period of time that it's just absolutely flown. We
just knew how to get the influencing right. In fact, that the influencing sports are tied to the extreme sports, all of that done way before social media,
yes,
came along, which can only have added to that success.
Yeah, that's true. And I mean, yeah, it's just, I mean, the energy drink market has grown, obviously, since then, and you get other
brands
like Monster Energy, apparently they're the anti-red bulb. I did not realize, I mean, I just thought they will, don't really care, but their approach is the complete polar opposite, so bigger can, lower price, and more extreme branding, and it's all about extreme because it's a very much a US market, whereas Red Bull obviously started.
It's made me think, because, because I do have, even though I drink a lot of coffee, I do have a little sensitivity to really strong caffeine drinks.
Yeah, and this I
discovered this when I had the company I was working for were doing some work for Jolt Cola. Jolt Cola is named as the cola that got Microsoft through building, I think it was the Windows program. Their programmers literally didn't sleep, they were drinking Jolt Cola, which is triple strength caffeine cola, and we had a bunch of it arrive at the office, so we got a bottle out of the fridge, thinking I'm having to give, give this a go. I had half the bottle, and then had the one, the first and one and only migraine I've ever had. I was seeing flashing lights, nausea, kind of dizziness, and all sorts of stuff to go home for the rest of the day,
and it's because of interesting, because a lot of people question whether Red Bull is good for you, and it isn't. It isn't in moderation, a healthy adult, it's, it's broadly safe.
Yeah, I've had to resort, I've resorted to it when I've been on long journeys, and I've been feeling a little bit fatigued at the wheel, yeah, and actually that's got me through the journey. The
caffeine in one can is 80 milligrams, which is equivalent to a cup of coffee, depending on how
strong your coffee
isn't that much. The taurine is naturally occurring in the body, but the concern is primarily the volume of consumption and the usage of
it.
So, multiple candidates ain't never gonna be good for you, the same way that multiple cups of coffee isn't good for you, but also mixing it with things like alcohol, or use by children, or used by people with heart conditions, that's not sensible. So, broadly, yes, it is safe, but it's like the same with anything else.
Well, it would have had a whole heap of problems getting, uh, getting us promoted if it hadn't been.
Well, I mean, the WHA, this and the World Health Organization, has still flagged concerns about energy drinks generally, but specifically mixed with alcohol, because that's a lot of stimulant, that's a lot of stimulant all in one go.
Certainly,
I know when I used to be at uni, they sell vodka and Red Bull in a pint glass for a pound, and it was free, poor, free pool, yeah. I used to have hollow legs anymore, and I certainly wouldn't touch Red Bull. Oh, good Lord. So, yeah, I just thought was really interesting, and the other thing that just I glanced on, because it was interesting, Dietrich, the reason he never sold or listed the company, really very, really talked about. A very private man, but he said he was afraid that public shareholders would prioritize short-term profit over long-term brand investments, specifically the sport and content commitments that make Red Bull what it
is,
because at the end of the day they are expensive investments like F that is an expensive long term investment, it's worked for them, but you can understand how a shareholder group would be a bit like,
is
that the best investment, but it's just, I just think it's fascinating,
it is,
and I never knew any of that
sounds like wise control, and what's the, what's the word, steward, stewardship, yeah,
but imagine having that amount of foresight in 1987 when you had a drink from a taxi driver in Thailand, you're like, "Yep, I'm gonna take over the world with this, this Cal Pole-esque caffeine beverage that is some force out there. Sometimes people are just, they just see something
that's still going in Thailand,
probably. I don't
know,
I might Google it, not right now, we're
talking.
That would be rude if I just went quiet for five minutes while I googled.
Yep, right.
Yeah,
what amazing story. Never thought to scratch beneath the skin on that one. Yeah,
now I was going to start with, what would you think if I told you red and blue? And then I thought that's the most ridiculous way to start a podcast ever, because that could be literally anything. So I've given away the secrets before I started, so that's fine anyway. Come again soon.
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