Hansen Natural Mid-Quarter Update – September 23rd 2008

This is an overview of the key remarks made during Hansen Natural’s (HANS) Mid Quarter Business Update on September 23rd 2008.

 

Note that all references to sales figures and market share are from Nielsen and are not actual sales or statistics reported by Hansen Natural. There can be a discrepancy between the Nielsen figures and actual results reported by Hansen Natural. 

 

• Consumers cut back on impulse drink purchases at gas stations, which is the most important channel for energy drinks. This trend, seen nationwide,  is most marked in California, an important energy drink market. Blue collar workers are disproportionately affected. 
• Monster brand continues to grow in excess of the category. In all outlets combined (grocery, drugs, gas, convenience, mass market excluding Wal Mart) for the 13 weeks ending August 23rd 2008, the energy category as a whole grew 11.5%, or $133 mln for a total of  $1.29 bln. Monster Energy accounted for $85.2 mln of the category growth. 

 

 

                             

•  Monster Java contributed $52 mln in sales for the 13-week period.
• Measured in units sold, Monster is selling as many units as Red Bull in the convenience channel.
• Monster share of the category, excluding Java, is 25.8%, +2.6%. Excluding Java, Monster Energy sales are up 17.5% in dollar terms.
• The table below presents sales per point in G&C channel, 13 weeks ending August 23rd 2008 for “flagship” or best-selling SKU per brand, plus Monster Lo-carb and Monster Java. Note that the Red Bull number does not include newer larger-size offerings of 12 oz. and 16.9 oz. The sales per point for Monster Java are double the sales per point of  Rockstar Roasted. 

 

                                              

 

•  For the 12 weeks ended September 6th 2008 in convenience channel, the RTD coffee category grew 36%. This was largely fueled by the entry of energy-coffee hybrids (Monster Java, Rockstar Roasted, Full Throttle and Starbucks Coffee & Energy). Enhanced waters were up 19.8%, refridgerated juices 4.8%. Carbonated beverages were flat, yoghurt/milk, bottled water and RTD teas were negative.
•  Distribution in convenience channel for regular Monster stands at 92%, for Lo-Carb at 82%, followed by Khaos (72%), Assault (61%), M-80 (55%) and Mixxd (44%). Monster 24 oz. stands at 55%. For the several Java SKU distribution penetration ranges from 27% to 65%. 
• In the on-premise channel, Monster now has over 15,000 accounts nationwide (of  some odd 250,000). These sort of accounts require additional investments to set-up (compared to off-premise), in terms of promotion and rebates. Sacks noted that they serve a lot of smaller accounts. 
• Mexico: (all outlets, June/July 2008) energy drink category grew 36.4%. Monster’s market share is  21.3%  and sales are up 155.8%.
• Canada: (C&G channel, September 2008) energy drink category grew 28%. Monster’s market share is 13.7% and sales are up 36%.
•  After UK, Ireland, Spain and Sweden, Monster energy is in the process of entering additional international markets: New Zealand and Australia. ( Author’s remark: interestingly there already is a company selling an energy drink under the Monster Energy name in Australia, which Hansen Natural has been fighting in court.)
• Roll out of Hitman   has commenced in the last two weeks. It’s expected that gross margin on this energy shot will be equal or higher than regular Monster.
• Auction rate securities are being redeemed bit by bit.
• No comments on progress of share buyback.
• Questions about the Coke rumors were obviously met with a  “we can’t comment on that”.

 

 

---

Possibly related posts: (automatically generated)