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Why a “Disgusting” Drink Became a €11.2 Billion Brand | Nudge Newsletter

Published about 2 months ago • 1 min read

The Red Bull Story

​Read online​

Dietrich Mateschitz discovered an energy drink in Thailand.

It was cheap and used by factory workers to stay awake.

Mateschitz took it back to Austria and set up focus group taste tests.

They didn't go well. Red Bull was described¹ as:

"Awful", "horrible to taste", and "disgusting".

And yet, this "disgusting" drink sells 12.6 billion cans a year.

Here are three possible reasons why.

Anchoring

Price can act as a signal of quality.

Rather than charging the Thai $0.10 price, Mateschitz raised the price.

In 2005², three researchers demonstrated that a higher price led to improved product performance.

People who paid more for Red Bull performed better on puzzle tasks.

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Scarcity

The novel ingredient list meant Red Bull's German launch was delayed³.

Extensive regulatory testing took place.

Yet many smuggled the product over the border from Austria.

The lack of availability only made it more popular.

Reactance

In 2009, a couple of Swedish stores banned the sale of Red Bull to children.

Forbidding something tends to only make it more popular (triggering reactance).

This Swedish ban increased Red Bull's popularity in the region.

There's much more to Red Bull's success, but charging more (anchoring), limiting access (scarcity), and outright bans (reactance) all helped fuel its unparalleled success.

​Phill​

P.S. The Hustle Daily Show invited me on to chat about Zohran Mamdani's political campaign.
​
Which is funny because I know next to nothing about Zohran Mamdani.
​
And basically nothing about American politics.

​It's an interesting listen. Let me know what you think.
​

¹Red Bull: The Anti-Brand Brand (2005)

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²Shiv, B., Carmon, Z., & Ariely, D. (2005). Placebo effects of marketing actions: Consumers may get what they pay for. Journal of Marketing Research, 42(4), 383–393.

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³Graves, P. (2010). Consumer.ology: The market research myth, the truth about consumers, and the psychology of shopping. Nicholas Brealey Publishing.

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As a behavioural science practitioner, I believe in the peak-end rule.

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Nudge Newsletter

Phill Agnew

I spend 18 hours each week turning marketing psychology into readable newsletters.

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