Monster Beverage: A Surprisingly Sweet Compounder

A closer look at one of the most profitable and overlooked consumer businesses

Today we are taking a closer look at the beverage industry by exploring a company that started small but went on to reshape an entire category. What began as a small juice business Los Angeles has become one of the most remarkable success stories in the global beverage industry.

Photo by Diego Calabrese on Unsplash

In the in 1930s Hubert Hansen sold fresh fruit juices with his sons to local film studios, long before the word "energy drink" meant anything to consumers. Decades later, his grandson Tim Hansen founded Hansen Foods Inc. in 1977. But the true turning point came in 1992, when a group of South African investors led by Rodney Sacks and Hilton Schlosberg acquired the company.

Five years later, in 1997, the company entered the energy drink segment. The decisive breakthrough followed in 2002 with the launch of the Monster Energy brand. With it came not only a broader product concept but also the introduction of the 16-ounce can, which contrasted sharply with Red Bull's 8.4-ounce format at the time. Despite its larger size, the can was offered at the same price as Red Bull, giving Monster a clear value advantage over its largest competitor. This move helped the company stand out in a growing category and signaled its intention to establish a strong and differentiated presence in the market.

In 2012, the company formally changed its name from Hansen Natural Corporation to Monster Beverage. This was a logical step, as energy drinks had become the dominant source of the company’s revenue. At the time, the category was growing rapidly, and Coca-Cola saw an opportunity to participate in that momentum. In 2015, Coca-Cola entered the picture not only as a shareholder by acquiring 16.7 percent of Monster, but also as a strategic partner with responsibility for global distribution. This partnership marked a significant milestone in Monster’s history, as we will see later on. But its ambitions did not stop there. In 2016, the company acquired its long-time flavor supplier, American Fruits & Flavors. In 2022, it entered the alcohol segment through the acquisition of Canarchy Craft Brewery for 330 million dollars. Most recently, in 2023, Monster expanded its portfolio further by acquiring Bang Energy.

Today, energy drinks are no longer a niche. Around 32 percent of the global population consumes them monthly, and 9 percent drink them daily. Over half of all energy drink consumers are between 18 and 34 years old, with the global average age hovering around 37. Energy drinks are no longer limited to younger consumers but have become a firmly established part of the global beverage market.

Let us take a closer look at what drives Monster, where its strengths lie, and whether it can continue to grow in the years ahead. Let’s dive in.