Red Bull mulling end of Israel activity
Global energy drink manufacturer considering reducing its Israel activity, layoffs
Global energy drink manufacturer Red Bull is reexamining its Israel operations, Calcalist learned. The decision is said to stem from the growing competition in the energy drink sector vis-à-vis rival energy drinks XL and Blu.
For the time being, Red Bull has decided to slash its activity in Israel and it may even decide to terminate is operations in the country all together in the future.
In the upcoming months, the global company, which is the full proprietor of the marketing activity in Israel, will determine how it plans to operate in Israel – either fully managing the marketing and promotion operations of its brand or using a franchisee, such as Sides, with which Red Bull had worked in the past.
Based on that decision, the company will also determine to what extent it will downsize its workforce in Israel. The company has already fired several workers and presently distributes its product through the Binyamina Winery.
It is very likely, however, that Red Bull has no intention of taking its products off the shelves in Israel, altogether removing its operations from the Israeli market.
Red Bull was the forerunner of energy drinks on the Israeli market; however, it has lost the lead to XL which is perceived by consumers as a substitute competing product which sells at a much lower price.
The entrance of XL into the Israeli market shifted the energy drink sector to a price-focused sector rather than a brand-focused one. SFS had begun marketing XL in Israel in 2008 and today the franchisee is held by Tempo. SFS now imports Blu which is considered a leading global energy drink brand.
Red Bull was unavailable for comment.
This report was originally published in Hebrew by Calcalist
