In 2019, Red Bull sold 7.5 billion cans of their energy drink. For perspective, that’s almost a can for every person in the world. Despite this impressive figure, the fact remains: the only product they manufacture is the famed energy drink. So how can they afford to sponsor all those individual pro-athletes, soccer and Formula 1 teams, headlining events, not to mention keep a complete media production branch going? Better yet… how does Red Bull actually make any money?
The short answer is that it’s an absolute marketing machine. YouTube channel Athletic Interest breaks it down in the video below – the economics of slinging caffeine, the profit margins involved, Red Bull’s genius outsourcing strategy, Red Bull’s genius vertical integration strategy, leveraging brand cachet within the youth market, actively shaping their own content, all without having to “chase” stories to be associated with.
A few stand-out statistics include the following:
- Manufacturing cost of a single can – approximately US$0.09
- The average wholesale price of a single can in Western countries – US$1.87
- The suggested retail price of a single can in Western countries – US$3.59
- 7.5 billion cans sold in 2019 helped generate US$6 billion in revenue – a third of which they reinvested into marketing
- Felix Baumgartner’s space jump cost Red Bull US$50 million to make happen – the return value on global reporting? US$6 billion
- Purchase of Red Bull New York soccer team in 2006 cost an estimated US$25 million – the return value in present-day? US$290 million (team value according to Forbes)
Find out how Red Bull makes money in the video below.