The Mythology of Red Bull

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A man falls from a great height and makes six billion dollars.

How did he do it?

It sounds like the start of a riddle, some fiddly enigma unlocked by the semantic reappraisal of a word, a letter, a sound. But this is no trap door or trick mirror. That's precisely what happened.

On October 12, 2012, Austrian skydiver Felix Baumgartner rose 24 miles into the air. He ascended in a silver pod, the shape of a milk pail, powered by a helium balloon. Above the ozone and more than 100,000 feet beyond the cruising altitude of passenger planes, Baumgartner rolled open the capsule's circular door and stood at its threshold. The earth, a dull brown and blue, swam beneath him.

He paused for a moment on the lip before uttering the words he must have rehearsed.

"I'm going home now," he said with a salute.

Then he dropped.

For over four minutes, Baumgartner fell. A tiny figure, tumbling, accelerating through an expanse of blue until he entered the realm of the supersonic, hitting Mach 1.25 and breaking the sound barrier. He was the first human to do so without the benefit of an engine.

By the time he landed, wafting to earth beneath a shimmering parachute, Baumgartner had made history. Just as important, so had his patron.

Red Bull had spent $50 million and seven years on the Stratos project. In its quest to break the record for the highest skydive, Red Bull enlisted expert engineers, medical staff, and others from the scientific community, running unmanned and manned practice jumps at lower altitudes.

It was, in its singlemindedness, a remarkable achievement and one that captured the world's imagination. One YouTube video of the jump has been viewed 43 million times; others racked up millions more. And all of it β€” the years of engineering, the mortal riskβ€” was contrived to sell a fizzy drink.

It's worth pausing on the uniquely mind-boggling nature of that fact, the strangeness that a feat of science and human endurance was conducted in service of something so trivial; as if Wrigley's mapped the human genome to promote a pack of gum or Heinz orchestrated a Mars landing to promote a new relish.

Whatever its absurdity, it worked.

Economists estimated that Red Bull derived $6 billion in value from the Stratos project in the form of exposure. Critically, it's a figure that will only increase in time. That is the unique benefit of owning a piece of history β€” anytime the event is discussed, Red Bull, implicitly, profits.

This is the genius of Red Bull. Despite making no tangible good, the Austrian firm has created an empire, manifested a distinct personality, and constructed a mythology the envy of the consumer packaged goods (CPG) industry.

In today's briefing, we'll explore:

  1. Red Bull's working-class origins
  2. The marketing genius of Dietrich Mateschitz
  3. A company that makes nothing
  4. Manufacturing history

Yoovidhya: Creator of Krating Daeng

Chaleo Yoovidhya's rise mirrored that of Thailand's.

The son of Chinese farmers, Yoovidhya began his career as an antibiotics salesman before founding a company of his own: TC Pharmaceuticals. It represented a solid business throughout the 1960s, but it was in the following decade that Yoovidhya received the revelation he described as "divine inspiration."

Though energy drinks did not exist in the West at this point, they were a thriving business in Yoo's homeland, dominated by Japanese and South Korean brands like Lipovitan-D. These imports sold to Thailand's affluent urbanites and positioned their products as medicinal.

That didn't make sense to Yoovidhya. Why target the wealthy when it was the working man that needed extra energy? Having grown up in rural poverty, he understood the back-breaking work it took to make ends meet. Surely those were the people that would buy energy drinks, right?

Using his chemical knowledge, Yoovidhya studied competitors' compositions, recognizing a slate of shared ingredients: taurine, caffeine, glucose, and sucrose. With the core ingredients of his drink settled, Yoovidhya turned to the matter of branding. He wanted something uniquely Thai, something that spoke to the experience of the working class from which he'd come. He settled on a striking icon: the red gaur.

Indigenous to Southeast Asia, the gaur is the bovine family's largest species, a beast of mass and muscle reaching up to 7 feet tall and weighing 3300 pounds. While not the nimblest of creatures, its power and geographic identity encapsulated the spirit Yoovidhya hoped to capture. It proved the inspiration for the new product's name and logo. Translated, Krating Daeng means "Red Gaur." Yoovidhya's cans bore an illustration of two red gaurs charging towards one another before a yellow sun.

Krating Daeng was a hit. Within two years, it had become the country's most popular energy drink, displacing its foreign rivals. By pricing beneath competitors and aligning the beverage with Thai culture, Yoovidhya built a strong consumer base of rural laborers, factory workers, and long-route truck drivers. Foreshadowing what lay ahead, Yoovidhya bolstered Krating Daeng's positioning by sponsoring Muay Thai tournaments, an embodiment of the drink's Thai roots and invigorating effects.

Dietrich Mateschitz had the strong jaw and glossy smile of a toothpaste salesman, which he was, of course. A marketing director at Blendax, Mateschitz had little in his background to suggest a tycoon-in-waiting. He'd taken ten years to graduate from Vienna University, subsequently puttering along at Unilever selling laundry detergent, before his move to the toothpaste company.

In 1982, Mateschitz traveled to Bangkok to visit Blendax's local licensee: Chaleo Yoovidhya of TC Pharmaceuticals. Seeing his visitor exhausted and jetlagged, Yoovidhya offered Mateschitz a glass of his specially-brewed tonic. Almost immediately, Mateschitz was hooked.

"One glass and the jet lag was gone," he later said of the incident.

So began a ritual. Every time Mateschitz arrived in Bangkok, he would get his taxi driver to stop en route to the hotel so that he could pick up a refreshing can of Krating Daeng. It was a great product, Mateschitz must have thought, but could it be business?

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