We blogged recently about Coke and their attempt at entering the energy drinks market.

Well since then we have noted two interesting developments.

1. Frucor - the owner of V - one of the leading energy drinks in the Australian/NZ market has ‘apparently’ been put on the market by its owners - Groupe Danone of France. While this represents an interesting move by Danone in this market, watching what CCA does in response will be fascinating. Sometimes, no matter how big and well resourced you are, innovation won’t work. The initial Mother product fell squarely into this category. So now that one of the leading brands is ‘on the market’, it would have to cross the mind of the CCA board that here is a far easier way to avoid the pitfalls of the Mother experience and bring to bear CCA’s capabilities and resources.
2. Now having said that, before they spend further funds entering what seems to be a very attractive market, they might want to keep an eye on a recent study that indicated “that just one can of the popular stimulant energy drink Red Bull can increase the risk of heart attack or stroke, even in young people,“

This throws a real spin on the whole energy drinks market opportunity. Rather than unpacking a multi-million dollar revenue stream, players could be opening up a real can of worms. Strategically responding to issues like this will test even the greatest management team. Ensuring they manage their brand to ensure long term growth and protect their enormous brand equity will be vital.

When assessing innovation risk, ie. the risk profile of an innovation project, and in particular the risk surrounding any new technology, not everything is or can be known. Having a process that at the bare minimum identifies what you don’t know ( with apologies to Donald Rumsfeld) is absolutely vital.

Michael R Johnson