Posted on: February 9, 2012 at 2:30 pm
Tags: 5 Hour Energy
Manoj Bhargava.
Who?
Yes that is what I said too…
While this is a private company, I found it to be a fascinating story since it is always interesting to hear where these out of the blue blockbuster products come from. I had no idea it was a local story as well. I had heard Detroit Lions coach Jim Schwartz was at the Super Bowl, on the dole (i.e. pitching) 5 Hour Energy and it seemed like a strange connection, but now I see why he was a choice (again, local). Believe it or not I've never imbibed any sort of energy drink such as Monster or Red Bull, nor have I touched this 5 Hour Energy thing – but apparently I am in the minority as these are huge sellers. It's a long write up in Forbes – some snippets below:
Who?
Yes that is what I said too…
While this is a private company, I found it to be a fascinating story since it is always interesting to hear where these out of the blue blockbuster products come from. I had no idea it was a local story as well. I had heard Detroit Lions coach Jim Schwartz was at the Super Bowl, on the dole (i.e. pitching) 5 Hour Energy and it seemed like a strange connection, but now I see why he was a choice (again, local). Believe it or not I've never imbibed any sort of energy drink such as Monster or Red Bull, nor have I touched this 5 Hour Energy thing – but apparently I am in the minority as these are huge sellers. It's a long write up in Forbes – some snippets below:
- In eight years 5-Hour has gone from nowhere to $1 billion in retail sales. Truckers swear by it. So do the traders in Oliver Stone’s 2010 sequel to Wall Street. So do hungover students. It’s $3 a bottle, and it has made Bhargava a fortune.
- His company, Living Essentials, is the biggest player by far in the energy-shot market, and not because 5-Hour is so delicious. Chalky cough syrup is more like it. The reason Bhargava has won is that he plays tough. Sitting in that cemetery are a dozen or so neon copycats with names like 6-Hour Power and 8-Hour Energy. Each has been sued, bullied or kicked off the market by Living Essentials’ lawyers. In front of each are little placards with a skull and crossbones drawn in felt-tip pen. Bhargava points at the gravestone of one of his late competitors and says with a chuckle, “Rest in peace.”
- The privately held Living Essentials doesn’t report revenue or profits, but a source with knowledge of its financials says the company grossed north of $600 million last year on that $1 billion at retail. The source says the company netted about $300 million. Checkout scan data from research firm SymphonyIRI say that 5-Hour has 90% of the energy-shot market. Its closest competitor, NVE Pharmaceuticals’ Stacker brand, has just over 3%.
- Yet Bhargava, 58, is so under the radar that he barely registers on Web searches. His paper trail is thin, consisting primarily of more than 90 lawsuits. This is his first press interview. Colleagues and acquaintances uniformly describe Bhargava as “humble,” and he seems proud of his frugal lifestyle: his ancient flip phone, his cheap office furniture, the modest two-story home he shares with his wife and 20-year-old son. Yet, over vegetarian lasagna at Antonio’s, his favorite strip-mall Italian joint off Detroit’s Twelve-Mile Road, Bhargava says, apropos of nothing: “I’m probably the wealthiest Indian in America.”
- The rise of 5-Hour began in the spring of 2003, when Bhargava found himself at a natural products trade show in Anaheim, Calif. At one booth the sales reps peddled a 16-ounce concoction claiming to boost productivity for hours. Bhargava took a swig. “For the next six or seven hours I was in great shape,” he says. “I thought, Wow, this is amazing. I can sell this.”
- Right away, though, he knew 16 ounces wouldn’t sell. He didn’t want to compete with Red Bull, at the time new to the market. Nor did he want to share fridge space with Coke or Pepsi. “I thought, If I’m tired, am I also thirsty? Is that like having a headache and a stomachache? It didn’t make any sense.” He glanced at the ingredients label and made a mental note. Six months later his version was on the shelves, two ounces of caffeine-infused B vitamins such as niacin mixed with acids like taurine.
