Archive for October, 2012

Rider Students Offer Monster Energy Some Ideas

Posted in Uncategorized with tags , , , , , , on October 26, 2012 by innovativemediapr

After reviewing the problems facing Monster Beverage Corp (Nasdaq:MNST) following the filing of a wrongful death lawsuit by the parents of 14-year-old Anais Fournier and the subsequent announcement of an FDA investigation, my Rider University public relations class this past Tuesday examined immediate public relations steps and potential new strategies the Company could take to protect its brand and regain confidence from investors.

In our prior class we had discussed the various reasons why developing a positive consumer relations program was important to companies. The problems facing Monster Energy were discussed. The assignment I gave the students was to research what was being written and said about the Monster Energy case, examine how the company was responding, and survey their friends and family on their reactions and whether they used energy drinks like Monster Energy and whether this FDA investigation would have any impact on their continued use of the products.

Some of the personal findings by students were:
■ Matt described one person he knew that drank eight cans of Monster Energy in a 10 hour period and eventually developed bronchitis.
■ Caitlyn described how her 14-year-old brother, who is quite hyper, drinks Monster Energy on a regular basis.
■ Karly admitted to drinking 2-3 cans of Monster Energy each day and had no reservations about continuing to do so.
■ Allie indicated she has a friend who gets migraines from drinking Monster Energy and has told her that you can get seizures.
■ Ashley talked about her roommate who was hospitalized after drinking two cans of the product.

After exploring the personal findings of my class, we began the process of identifying what immediate steps Monster Beverage Corp could take to ensure that they could maintain public confidence in their products.

Some of the communications elements my class recommended were as follows:

Monster Beverage Corp should survey and poll its customer base to gauge their feelings on the issue. They should also poll their major distributors to gain a sense of what reaction these news stories are having on sales of Monster products.

Monster Beverage Corp should set up a Safety Hotline where consumers can receive information on the contents of the product and ask questions.

Monster Beverage Corp should provide a FAQ document outlining all of the ingredients, research and safety steps associated with their Monster Energy drinks and post it to the corporate and Monster Energy website as well as the Monster Energy Facebook page.

The company should actively step up all consumer engagement activities. This is the time to build and strengthen a dialogue with consumers.

As part of its consumer engagement, Monster Beverage Corp should seek out testimonials from consumers and use a free flowing Twitter feed for customers to post their thoughts.

The class also felt the company should offer discounts on its products and run promotions to build consumer satisfaction.

All of these suggestions were immediate steps that Monster Beverage Corp could take to reinforce consumer confidence and keep their share price from falling even further, after losing over 10% in share price in the first two days of the crisis this week.

What we also explored in class, was longer term strategies that Monster Beverage Corp could develop to achieve a goal of Reinforcing Consumer Confidence. Here were eight concepts proposed by the students.

1.Research – Monster Beverage Corp should put together a package of information which includes every piece of data and research the company has ever compiled on the ingredients, research and safety tests done on its products. This should be made available to the public on the company’s websites.

2.Age Restriction – The Company should consider taking a lead in the energy drink market and voluntarily set an age limit for its product use.

3.Health Labeling – While there is a warning on the Monster Energy cans regarding caffeine in the product, the class felt that Monster Beverage Corp is eventually going to have to consider stronger warnings on its labeling.

4.No Alcohol Mixing – Monster Beverage Corp should also take the lead in developing a campaign against the mixing of energy drinks and alcohol. The class suggested using the Monster Energy athletes to help drive such a campaign.

5.Safety Campaign – The class felt strongly that the Monster Energy athletes, such as their Motocross performers, should be used for a multi-tiered marketing campaign promoting the safe use of energy drinks like Monster Energy. Athlete images with safety messages could be used on the product cans, through video PSAs on the website and Facebook page and in advertising materials.

6.Smaller Cans – Monster Beverage Corp should consider producing a smaller version of its energy drink.

7.Health Advisory Board – Monster Beverage Corp should seek out leading health professionals, scientists, athletes, etc. to serve on a Health Advisory Board to lend counsel and suggestions to the development of energy drinks by the company.

8.Charity – Monster Beverage Corp should look to develop a relationship with a national charity that could be integrated in all of its in-store promotions, live events and online activities.

All of these suggestions came in the course on one 90-minute class discussion. Hopefully, Monster Beverage Corp is spending a lot more time on this subject. I’m sure their customers and shareholders are hopeful of this as well.

Tom Cosentino

A Monster Consumer Problem

Posted in Uncategorized with tags , , , , , , on October 24, 2012 by innovativemediapr

Did Monster Energy® drinks cause the deaths of five individuals and a non-fatal heart attack? That’s what the FDA is currently investigating. It comes on the heels of a lawsuit filed in Maryland by the parents of Anais Fournier, a 14-year girl who allege that a Monster Energy caused the death of their daughter.

Apparently, the daughter collapsed after drinking her second 24-ounce Monster Energy® drink in two days. She died six days later.

Obviously this is a tragedy and for the Monster Beverage Corporation, owners of Monster Energy, this lawsuit, the FDA investigation and negative news stories associated with this issue, is a major blow.

According to a story on WebMD.com

The reports are not proof that the drinks caused the deaths, but merely signal there might be a problem. Even if the deaths are determined to be caused by caffeine poisoning, the FDA will consider all sources of caffeine before blaming the deaths on the energy drink.

In addition to caffeine, energy drinks contain other stimulants, including taurine and guarana, a caffeine-containing plant.

Because energy drinks are sold as nutritional supplements, they are not regulated as foods. This means they may exceed the FDA-mandated limit of 71 milligrams of caffeine for a 12-ounce soda.

When news of this broke about this story on Monday, I was preparing my lecture notes for my public relations class the next morning at Rider University. It just so happened, the topic was going to focus on Consumer Relations.

During class we discussed the various reasons why developing a positive consumer relations program was important to companies. We covered dealing with complaints, engaging consumers and even discussed the government agencies that serve as watchdogs for the consumers. That gave me an opening to discuss the Monster Energy® case.

We examined a news story in the New York Times about the FDA investigation and the wrongful death law suit filed by the parents of Anais Fournier. As we discussed the issue, I called up the Monster Energy product website so we could see if they posted any information on this and/or what kind of safety information and ingredients did they list about their products.

According to an NBCNews.com story:

Monster Beverage Corporation, which describes Monster Energy Drink as a “killer energy brew” and “the meanest energy supplement on the planet,” puts labels on cans stating the drinks are not recommended for children and people who are sensitive to caffeine.

However, as we scrolled through the Monster Energy website, we were able to click on each drink. There was no specific ingredient information listed or any warnings of safety issues associated with drinking these beverages.

I asked the class to name a leading competitor so we could see how they addressed safety and ingredient information. The class all named Red Bull so off to Red Bull website we went. There, listed first on the left side of the banner was a products page. From there we were able to click on each product and all of the ingredients were listed, including caffeine. On a separate FAQ document page, Red Bull outlined how much caffeine was in each can and described how the amount of caffeine in one can was the equivalent of drinking two cups of coffee.

These figures were similar to findings by the Center for Science in the Public Interest which says the Monster energy drinks contain about 10 mg of caffeine per ounce of drink, which would mean 240 mg of caffeine in a 24-ounce energy drink – not much more than two strong cups of coffee.

Share of Monster Beverage Corp. (MNST ) dropped 11% the day following the announcement that the FDA was investigating.

Yesterday, the company issued the following press release:

Monster Beverage Corporation (Nasdaq:MNST) (“Monster”) today issued the following statement in response to inquiries it has received and numerous recent media reports in connection with a lawsuit that has been filed against the company by the family of 14-year old Anais Fournier, who died last December.

Monster is saddened by the untimely passing of Anais Fournier, and its sympathies go out to her family. Monster does not believe that its products are in any way responsible for the death of Ms. Fournier and intends to vigorously defend the lawsuit. The company wishes to point out that:
■Tens of billions of energy drinks have been sold and safely consumed worldwide for approximately 25 years, including more than 8 billion cans of Monster Energy® that have been sold and safely consumed in the United States and around the world since 2002. The company monitors consumer communications it receives, is unaware of any fatality anywhere that has been caused by its products, and has never before been the subject of any lawsuit of this nature.
■Monster Energy® drinks generally contain approximately 10 milligrams of caffeine from all sources per ounce. By comparison, the leading brands of coffee house brewed coffee contain on average more than 20 milligrams of caffeine per ounce. An entire 24-ounce can of Monster Energy® contains about 240 milligrams of caffeine from all sources, which is around 30 percent less than the average caffeine contained in a medium-sized, 16-ounce cup of coffee house brewed coffee.
■Monster Energy® drinks, including their ingredients and labeling, are in full compliance with all laws and regulations in each of the more than 70 countries in which they are sold.
■The U.S. Food and Drug Administration (“FDA”) has stated that adverse event reports about a product do not mean that the reported event is caused by the product. The FDA has made it clear that it has not established any causal link between Monster Energy® drinks and the reports it has received.

Neither the science nor the facts support the allegations that have been made. Monster reiterates that its products are and have always been safe.

I gave my class an assignment for Thursday to track what was being said about Monster Energy in the press and online, including polling their own social networks to determine if these cases might influence whether their friends and family will have any apprehensions of using energy drinks.

The key question for Monster Energy Corp is how will they respond to their consumers? Unlike their competitor Red Bull, they decided that a warning on a can was enough. Will they add content to the website about the level of caffeine in their drinks? Obviously, with a lawsuit filed and because they are a public company, their actions may be limited by legal issues.

However, the way they engage their consumer over the coming days and weeks will be essential to maintaining their reputation, company and market share. It will take more than a press release to defend their position. They will need to ensure that their products are indeed safe.

For Monster Energy, Consumer Relations has become paramount. How the company responds will determine its future.

Tom Cosentino