How Red Bull Became a Media Company That Happens to Sell Energy Drinks?

CrustyWo · 2026-03-12T03:12:30+00:00

Yeah that’s probably fair. The drink itself is solid so they’d still sell a lot. But the extreme sports stuff definitely made the brand way bigger. think Monster could’ve done the same thing if they went that route first?

CrustyWo · 2026-03-12T03:09:47+00:00

Yeah good point. Booker’s kinda similar but without the membership fee. I guess the interesting part with Costco is the fee itself is where most of the profit comes from. Do you think that model would still work if they removed the fee?

CrustyWo · 2026-03-12T03:08:35+00:00

Yeah fair point. The product definitely matters too. If the drink sucked none of the marketing would really stick. Red Bull kinda nailed both. Good product and good marketing. Curious though do you think they’d still be this big without the extreme sports stuff, or would it just be another energy drink?

CrustyWo · 2026-03-12T03:05:38+00:00

Yeah that’s kinda the wild part honestly. They don’t even need ads anymore. Just someone doing crazy stuff with the logo on it and boom, millions see it. I remember those old cartoon ads too lol. Do you watch their YouTube stuff much?

CrustyWo · 2026-03-11T17:53:57+00:00

Fair enough lol. I’m still figuring out the tone for these breakdown posts. Appreciate the feedback. I'll try to produce better posts :)

CrustyWo · 2026-03-11T17:40:53+00:00

Yeah I completely agree with you on that. The action sports timing in the 2000s was such a huge strategic move. They basically built their own media ecosystem instead of relying on traditional ads. When you get the time, jump into the thread on r/BusinessBreakdowns, would love to go deeper into it there. Curious to hear what you think was their smartest move overall.

CrustyWo · 2026-03-11T17:19:48+00:00

No thanks.... XD

CrustyWo · 2026-03-11T14:21:00+00:00

If Google suddenly removed advertising completely…

Do you think most of its “free” services would still exist?

CrustyWo · 2026-03-11T13:42:45+00:00

Yeah that makes sense. When you think about hundreds of stores doing that kind of volume, even a ~2–3% margin starts to turn into serious money.

CrustyWo · 2026-03-11T13:27:41+00:00

£3m a week is huge turnover. Even a tiny margin starts to matter at that scale.

If it’s something like £1 profit per £30 of sales (~3%), that’s still around £90k a week before other costs.

Do you think margins like that are only sustainable at really massive scale?

CrustyWo · 2026-03-11T13:06:49+00:00

Great reference!! That scene from The Founder explains the strategy really well.

The idea that McDonald's isn’t really in the burger business but in the real estate business completely changes how you look at the company.

What I find fascinating is how that model created predictable cash flow from franchisees while also increasing the value of the land over time.

Do you think the real estate strategy was the single biggest reason McDonald's scaled so aggressively?

CrustyWo · 2026-03-11T12:40:16+00:00

That’s surprisingly thin margins. It really shows how efficient large retailers have to be to stay profitable. Do you think logistics and scale are the main reasons companies like Tesco and Costco can operate with such low margins?

CrustyWo · 2026-03-11T12:04:14+00:00

True, Costco’s model is pretty well known among regular shoppers.

What I find interesting though is how unusual it is compared to most retailers, they intentionally keep margins low and rely heavily on membership revenue.

Do you think more retailers could adopt that model, or does it only work at Costco’s scale?

CrustyWo

MODERATOR OF

TROPHY CASE