Marketing Meister Red Bull, a One-Man Show

Austria's second-wealthiest entrepreneur, Dietrich Mateschitz, combines eccentricity and control, which has helped catapult his company to the top of the energy drinks industry.
Dietrich Mateschitz is Mr. Red Bull.

Enormous bronze bulls seem to be stampeding out of the two office buildings shaped like volcanoes grouped around an artificial lake. The Red Bull company headquarters, with 700 employees at Fuschl am See, a picturesque destination in Austria’s Salzkammergut region near Salzburg, is an eccentric dream come true. But at the company that produces the world-famous drink, everything is just a bit different.

Dietrich Mateschitz is not only the founder and chief executive officer of a far-reaching empire of energy drinks, Formula One teams, television stations, newspapers and restaurants. He is Mr. Red Bull and the second richest entrepreneur in Austria after the Porsche/Piëch family, which owns part of Volkswagen. The publicity-shy man from Styria is the driving force at Red Bull. “His word is law,” said an insider, who has known him for years. “The company has the structural features of a sect. The guru is Dietrich Mateschitz,” said a former manager. “His disciples distinguish themselves with anticipatory obedience, although he actually does not want that at all.”

Mr. Mateschitz considers his global empire as a one-man company. With only a handful of top managers, he controls his own marketing machine. “The most important people have been with him for two decades,” an Austrian entrepreneur said. The reason is simple: it takes time to penetrate the complicated network of Red Bull’s brand relations and to calibrate things to the founder's vision.

In three decades, Dietrich Mateschitz has created a brand empire out of thin air that has not only changed the beverage but also the media world.

In addition, Mr. Mateschitz is fanatical about quality and expects his top management to meet the highest demands. “However, if he is convinced of one's talent, then he promotes it,” said the former Red Bull manager. The chief executive allows his management and employees a lot of freedom, as long as the results add up. He only owns 49 percent of Red Bull GmbH, the heart of his empire. Despite that, he can do what he wants, according to insiders' assessments.

Mr. Mateschitz founded Red Bull in 1987 together with his Thai business partner Chaleo Yoovidhya and his son Chalerm. They brought the recipe for the energy drink, Mr. Mateschitz his exceptional marketing talent.

But Mr. Mateschitz’s unconventional leadership style also bears risks. “The biggest problem is finding new talent,” a confidant of the billionaire said. Not every manager wants to commit himself heart and soul to a company founder. The company location is also an issue. Both the village of Fuschl am See and Salzburg cannot compete with cities like Berlin, Vienna or Munich.

But Mr. Mateschitz is not budging. The headquarters on the outskirts of Fuschl am See took 12 years to complete from the initial sketch to the finished buildings. Architect and sculptor Jos Pirkner, Mr. Mateschitz's friend, presented his creation early this autumn. “The bulls, full of energy, flow like lava into the world,” raved the 86-year old. Not everyone is enthusiastic. “It is a completely inefficient but fascinating construction,” said a former Red Bull manager.

Bulls flowing like lava at the Red Bull company headquarters.

 

In three decades, Dietrich Mateschitz, a former sales representative for Blendax toothpaste and Jacobs coffee, has created a brand empire out of thin air that has not only changed the beverage but also the media world.

The 70-year old introduced a new principle. Instead of taking out ads and commercials, he made the product itself the story – regardless of whether on the television screen, in magazines or on the Internet. In advertising language his principle is called content marketing. And with space diver Felix Baumgartner’s stratospheric leap in 2012, which the company sponsored, Red Bull has finally become a globally known brand.

Despite an almost one-fifth drop in profits in 2013, Red Bull is highly profitable. The operating profit of the group, with about 10,000 employees in over 160 countries, decreased to almost €412 million, or about $514 million. The revenues fell about 6 percent to €2.5 billion. However, not all sales of the group are included on this balance sheet. Altogether sales are estimated to be about €5 billion.

Servus TV is considered a big loss maker within the company empire. “He is living out his private TV-aspirations with it,” said an ex-manager about the private broadcasting station from Salzburg. Insiders report high losses. Television is sinfully expensive – even for a self-made-billionaire like Mr. Mateschitz.

Hans-Peter Siebenhaar covers companies and markets for Handelsblatt. Contact the author: [email protected]