As Monster Energy finalized its $362 million acquisition of Bang Energy maker Vital Pharmaceuticals (VPX) on July 31, there’s been a lot of buzz and speculation about how the energy leader will display its new trophy. With the company’s Q2 earnings call yesterday, we now have a better sense for what the future of Bang looks like. Monster chairman and co-CEO Rodney Sacks confirmed that Bang will be fully integrated into the company’s infrastructure and it is set to transition into the Coca-Cola bottlers distribution network as soon as possible, likely within this current quarter. Last month Coke expressed interest in carrying the brand, which prior to its bankruptcy filing last year and subsequent issues with distribution and supply had been the number three energy drink brand in the U.S. Sacks cautioned that the move would lead to further disruptions for Bang in the interim (recall that this is now the third major distribution network overhaul for Bang in as many years), but the company appeared optimistic about its long term prospects. Co-CEO Hilton Schlosberg said they anticipate Bang having gross margins comparable to premium Monster lines like Ultra and Reign, while also suggesting the company is likely to redesign Bang’s cans (stripped of their “Super Creatine” callout) (stripped of their “Super Creatine” callout) and might, perhaps, move it away from the performance energy subset. “Interestingly, Bang started off life as a very much performance energy, and today, if you look at the brand and you analyze what it stands for, it really stands for a different segment, which is really ‘Lifestyle Energy,’” Schlosberg said. A select number of former VPX employees have been hired for open positions within Monster, while the bulk of staff at its Phoenix, Arizona production plant will stay on to continue producing Bang, as well as other Monster products, Sacks said. However, those workers have likely seen their last run of Redline and other non-Bang VPX brands. Sacks said Monster intends to rationalize Bang’s SKU count and cut entirely VPX’s other product lines, including shots. Monster will continue to sell through the remaining inventory of those products and could reintroduce them in the future, Sacks said, but for now it’s the end of the (Red)line. Read the full earnings recap on BevNET.
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