V goes down the gurgler

V energy drink
In New Zealand the energy drink V has a dominant position in the market (60%). The drink was developed by Frucor (a beverage company that is part of the Danone portfolio.

According to David Taylor on the BrandGym blog Danone, who market the brand in the UK, are about to pull the plug on the brand in the UK - even after launching a multimillion pound ad campaign promising that 'V invigorates the mind' Taylor's analysis makes for interesting reading:

The demise of V is a good example of how hard it is to make a dent in the share of a dominant brand leader. Dominant means a brand that IS the category. In the UK if you say "energy drink", people think "Red Bull". The brand has a huge 89% market share. And in a world where there is just too much stuff to worry about, brands like Red Bull are a godsend, as they mean there's one less decision to make.
-> Energy drink? Red Bull. Bang. In the basket (or in the hand in a garage/convenience store). Next.

To have any chance at all of taking share from a dominant market leader you need a combination of at least 4 things:

1. A decent bit of product/pack "sausage": you need some sort of product or pack innovation to make yourself worth considering.
=> V lacked any product differentiation [1/10]

2. Bravery to break codes: you also need to be brave enough to break some codes and stand out
=> V has the same type/shape/size of can as Red Bull. As far as I know, its sold in the same channels [1/10]

3. Loadsamoney: you need some big bucks to fight the big boys. Re-wiring peoples' brains so they think "energy drink?->V" instead of Red Bull is REALLY hard. [2/10]

4. Stamina: its one thing to launch. Its a whole different challenge to keep up the battle for 2, 3, 4 years and longer. Be ready for a long, hard and bloody fight. Energy drinks are just not key for Danone, who is focused on health, especially dairy [1/10]
TOTAL 5/40 = No chance

I find the energy drink formula hard to fathom. I have never felt any boost whatsoever after drinking the stuff. It tastes like, like…well, let's just say it just tastes bad - and it is expensive, so all in all V and Red Bull both leave a bad taste in my mouth.

Why does V have such a dominant position in New Zealand? My take would be that it is much cheaper than Red Bull (which is significant for the younger market), and it has fantastic distribution (ubiquity).

The profit margin on Red Bull must mean they have to pedal a lot less vigorously to go a lot faster. Sometimes size isn't everything.


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