The “mystery monk” got his first taste of energy drink ten years ago at a trade show.
From his first sip, he knew he wanted a piece of this market but wasn’t ready to take on emerging giant, Red Bull.
Nor did he care to share fridge space with Coke or Pepsi.
So, he invented his own product category — the energy shot.
It’s the retail point of sale success story of the last ten years. His product is now located next to countless cash registers all across the country.
And, the “mystery monk?”
Until recently, little was known about him. He broke his silence in this must read Forbes article last year.
His private company went from zero to over a billion dollars a year in sales in short order.
His is one of the most interesting case studies you’ll run into:
- Creating a product category out of thin air
- Retail POS domination
- Proof elements built into the product name
- And, the art of vigorous brand defense when the company is under assault
During his 20s, Manoj Bhargava was a member of the Hanslock order and spent his time traveling between monasteries. “Monk” is the closest English language word approximating his role, and he still practices daily meditation for an hour each day.
When 5-Hour Energy hit the shelves in 2004, it was an immediate success. “Truckers swear by it” is about as much copy as the product has ever gotten.
Between 250 and 300 companies, including Coke and Pepsi, tried to knock him off but failed and his company now controls 90% of the energy shot market.
With 500 million bottles sold last year, it’s no surprise 5-Hour-Energy attracted Food and Drug Administration scrutiny. Since 2009, 5-Hour has been mentioned in 90 filings with the FDA.
But the biggest challenge came at the end of 2012 when news broke that cited the possible involvement of 5-Hour Energy in 13 deaths. One of the deaths mentioned in the report involved a fatal car wreck where an empty shot of 5-Hour was found on the floor.
Mentioned in the same report was the publicly traded Monster Beverage which saw its share value almost cut in half in 2012.
Bhargava, who previously did everything to stay under the radar, responded with…
A text book example of brand defense
He bought plentiful online advertising where his customers were to be found.
- On YouTube, he launched an ad campaign with him speaking directly to his market: “I use 5-Hour-Energy, my family uses it, and I wouldn’t produce anything I wouldn’t give to my own family.”
- He bought banner advertising on news sites all over the country and confronted the claims head on while talking up the safety of his product.
- And, he made the often uncomfortable interview rounds on TV facing his share of unprepared and biased airheads who pass for journalists these days.
In Bhargava’s case involving an ingestible product, immediate and forceful brand defense was necessary.
But any company can take a lesson from this. Don’t wait for the crisis to “blow over” because sometimes it never does.
Great post!
Classic PR defense – on ‘bad news’ to go on the offensive and defend your position. The part about his family using and he wouldn’t produce anything he wouldn’t give his family – pure gold.
thanks for the updates!
Dr. Mark
Author: C-section: how to avoid, prepare for and recover from your cesarean
I wish I had screen grabs of the whole campaign but…
“My family takes the product” is as solid of a sound byte as it gets.
There are some very smart entrepreneurs in the beverage business, including the Resnicks.
Good stuff Lawrence. Us copywriters and marketers can learn a lot from this monk. Politicians spin their complaints and stories every day.
I wholeheartedly agree with Mr. Bhargava. Don’t wait til the media fires are burning out of control. Step in right away at the first sign of smoke (trouble) and start systematically dousing the flames before they have a chance to spread too far.
This lesson in brand protection is every marketer should be prepared for, even if you don’t think it could happen to you and your business. I’m sure Mr. Bhargava never saw this coming.
But he took immediate action and saved his company and his reputation.
Great case study, Lawrence! The disruptive power of inventing a new category with an innovation the market is starving for – but doesn’t yet know it, always intriguing. On the most recent episode of ‘Shark Tank’ available on Hulu, Mr. Wonderful (the most risk-averse of the bunch) made a one million dollar investment offer in a sushi franchise bringing high quality, made to order sushi to the masses at (near) Pizza Hut prices. The longer a product or business is successful, the more ripe the the opportunity becomes for disruptive innovation through new sub-specialized categories.
P.S. – My doctor brought out a bottle of ‘5 hour energy shot’ during my last visit, saying the company drops off samples every so often and I may want to give it a try!
Great post Lawrence and the lesson very much to be proactive. Related in a way is that having a clear brand story or USP makes it very much easier to respond in an effective fashion when something like this happens.
Occurred to me that this would have been a great opportunity to make an appropriate “offer” to take advantage of the publicity. Also, some full page , long copy ads along the theme of “The truth about energy drinks”…or even, dare I say it, a special report!
Wouldn’t surprise me to see the company double sales and good on them!
Thanks again for an informative post.
Haven’t been here for a awile,
And as always an interesting post Lawrence.
I went over to the Resnicks post from the link above.
Those Guys\Gals have some big brass balls(couldn’t spell cahonies).
Some good insights into the beveridge industry.
Thanks Lawrence. Very good post. Inspiring. Particularly the copy side of things. I need to focus on these kind of says-it-all statements. I know it’s an area I fall down in.
Of course anything that shoves it up the big guys is fun to hear about. I’m Australian, it’s in our culture. We can’t help but get a chuckle out of stories like that.
Hi Lawrence.
Thanks for another useful post.
BTW, it’s “Hanslok” or literally “abode (lok, rhymes with coke) of the swan (Hans, pronounced ‘Huns’ [Attila]). Hanslok appears to be more of a personality cult (no offense intended)—not an ‘order’.
Take care.
Benedict