Baby Monster – 3 oz. energy shot

Hansen Natural (HANS) is rolling out its latest Monster creation: Monster Hitman, an energy shot in a 3 oz. bottle. And according to a recent trademark registration, an additional variety may come out under the name Monster Sniper.

 

 

 

It’s for consumers who “need the energy boost but  don’t necessarily need the liquid with it.”

 

During the Q2 conference call, CEO Rodney Sacks commented:

 

“..Just as we saw 8 ounce energy drinks and we’re now selling 24 or 32 ounces, this is just going the other way…

 

…Until now it’s really been a little box on a sitting on the shelf of the convenient stores, we have seen convenient stores starting to design and change starting to design a racks to actually put because there are more competitors coming into the category…

 

…We think it will remain a niche within the energy category. But it will be part of it and if it’s part of it you know we don’t see any reason why we shouldn’t be playing in that category and be a part for that reason we took the decision. We sort of saw and wanted it to mature it to a sufficiently high level to justify the costs and focus of launching products and putting efforts and manpower behind it…”

   

…there will be some cannibalization but we think that it’s at a good margin for us and it shouldn’t result in a margin reduction.”

 

The market size currently is estimated at some $100 mln, but is expected to grow to $500 mln with volume of 200 mln shots in the next year. Rockstar Energy, the  number 3 behind Red Bull and Monster Energy, has also  launched energy shot varieties.

 

Summing up, energy shots:

 

• can be displayed prominently;
• don’t need refrigeration;
•  have relatively low distribution/transportation costs;
• are impulse purchases retailing roughly at $2 to $3;

 

Although it will be a relative small niche, and growth can be expected to flatten out quickly, margins should be  decent and could mitigate some of the margin lost on Java Monster.

 

 

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