How Challenger Brand Red Bull Beat Coke and Pepsi

Over the next couple weeks, we’ll be looking at how challenger brands use intense focus on a single consumer niche to create outsized success.

In the crowded 90s-era soft drink category dominated by Coke and Pepsi, tiny Red Bull showed up in the U.S. with a relentlessly aggressive grassroots focus on an underserved niche of adrenaline junkies. Before Red Bull had even registered on the cola giants’ radar, the company managed to singlehandedly create the energy drink segment that it would soon dominate. In the process, the brand won the hearts and minds of extreme sports enthusiasts and became their champion.

Red Bull flipped category convention on its head with a single oddly packaged, premium-priced, 8-ounce can of rocket fuel with the simple promise that it would “give you wings.” The claim that its ingredients actually fueled athletic performance was in doubt from the jump, but that wasn’t the point at all. As a challenger brand, Red Bull did something even more important than give its carefully selected audience a buzz. It embraced, with unapologetic enthusiasm, their belief that limits are for losers. The brand became a peer to its customers.

No start-up beverage company can afford to go toe-to-toe with the category killers through traditional advertising channels and Red Bull was certainly no different. Like all true challenger brands, they turned that limitation into an advantage. Red Bull couldn’t win with mass media, so they made it personal and met their customers where they were — at local extreme sports events and competitions. But the company didn’t just send in product reps wearing logoed shirts as is the category norm. Instead, they sent extreme sports enthusiasts, greeting local fans with people who looked and behaved just like them. They got involved and organized events, handing out free samples of their product, and offering modest sponsorships for the minor celebrities who held sway.

Red Bull’s early hands-on efforts accomplished something no brand before had ever tried to do. Remarkably, Red Bull succeeded by recognizing and then building the social context for the role the brand would assume. Through intense engagement and aggressive support of extreme sport athletes and fans alike, Red Bull built its own reputation as their champion. Intentional or not, the company ushered in a new era of influencer marketing; the kind whose magic is execution by peers for peers. In doing so, the brand built and fortified an unassailable advantage the cola giants never saw coming.

Today, Red Bull is a trusted and influential extreme sports industry insider. When Red Bull’s involved, fans know the event is legit. They’ve become a brand for the fans, catalyzing the community with extraordinary engagement and nourishing the very ecosystem that supports it.

Red Bull did this not by showing up and selling product, but by offering real value to the extreme sports community. But Red Bull did something else that would make it the envy of its peers. Capitalizing on its credibility, it transformed itself into a powerful media company.

A quick review of today’s redbull.com reveals its enviable center pole role propping up the big tent for extreme sports enthusiasts around the globe. In our new era of brand journalism, Red Bull leads the way again.

The company has done perhaps the very best job of thinking about their brand like journalists, and they stay busy at work in their own newsroom, cranking out content they know their audience will love. The key to Red Bull’s success has been an airtight alignment between what it promises customers and the way it actually behaves while delivering on those promises. Red Bull didn’t simply target its users, it assumed its place among them. This challenger brand now ranks third on the U.S. soft drink category leaderboard.

Next week, we’ll look at how Red Bull inspired yet another challenger’s success. Monster Energy took yet another neglected niche folded deep inside extreme sports and used it to build the best performing brand on the NASDAQ in 15 years.

MIKE SULLIVAN is President of LOOMIS, the country’s leading challenger brand advertising agency and a top Dallas advertising agency for digital, social, mobile and user experience. For more about challenger branding, advertising and marketing, leadership, culture and other inspirations that will drive your success, visit our blog BARK! The Voice of the Underdog and catch up on all of our posts.

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