Master of the Buzz: How an Austrian Company Challenges Coke and Pepsi in America

For decades, Coca-Cola (NYSE:KO) and Pepsico (NYSE:PEP) had an unquestionable lead in the US beverage market. Occasionally, a challenger would emerge with competing beverages like Snapple in the late 1980s, but it never managed to gain a substantial market share. Besides, Coca-Cola and Pepsico would quickly come up with their own versions of the product or acquire the challenger.

Recently, this is about to change. An Austrian energy beverage company, Red Bull, is challenging both companies worldwide, including their own home turf. Last year, for instance, Red Bull sold a total of 4.631 billion cans worldwide, an 11.4% increase overt 2010. Company turnover increased by 12.4% from EUR 3.785 billion to EUR 4.253 billion—far better than the low single digit growth experienced by the two giants.

The main driver for Red Bull’s growth, which comes from a single product rather than a portfolio of products, is an aggressive expansion in mature markets like the USA (+11%), Germany (+10%), Japan (+62%), France (+35%), and Scandinavia (+34%), and in emerging markets like Turkey (+ 86%).

Coca-Cola and Pepsico have created their own energy beverages, Full Throttle, Fuze, and Gladiator (Coke), and AMP (Pepsico), but they have failed to slow-down Red Bull’s growth. Coca-Cola has been further rumored as a potential suitor for Monster Beverage (NASDAQ:MNST), but such a deal has yet to emerge, as Monster Beverage trades at a high multiple.

What is Red Bull’s secret?

The Mastery of the buzz. The enlisting of the right messengers to spread the company’s brand to the right audience in the right context, the place and time the message is launched. Red Bull messengers are usually extreme sports professionals. The context is well-known landmarks where they perform Red Bull sponsored events.

On Sunday morning, Red Bull Stratos, a group of extreme professionals, has carried buzz marketing into the space. One of its members, Felix Baumgartner is about to take an epic jump from the edge of space, according to Red Bull Stratos official site. Supported by a team of experts, Felix will ascend in a helium balloon to an altitude of 120,000 ft / 36,576 m where he will take a leap of faith into the unknown in an attempt to become the first person to break the speed of sound during the free fall. And Red Bull the first beverage company to take its message to the space.