Hansen's Monster takes the fight to Red Bull's turf

By Amitha Rajan - Analysis

BANGALORE (Reuters) - After having established its Monster brand as the leading energy drink in the United States, Hansen Natural Corp (HANS.O) is all charged up to grab market share in Europe and break rival Red Bull's near monopoly in the region.

"Right now, Red Bull probably has close to 75 to 80 percent of the category. So there seems to be an awful lot of room there for people to take share," Alton Stump, senior research analyst at Longbow Research, said.

Hansen, which has doubled its share in the U.S. energy-drink market since its launch there in 2002, has a distribution agreement with Coca-Cola Co (KO.N) under which the beverage giant released Monster in the United Kingdom, Belgium, Holland, Luxembourg, France and Monaco this year.

Though he believes Monster's launch in Europe is still "a very green banana story," Stump said Coke's distribution system will help get the product on shelves much more quickly than what Hansen had in place previously.

Analyst Mark Astrachan of Stifel Nicolaus, which makes a market in Hansen's stock, said he estimates the company's international revenue to double in 2009 and expects Europe to be the most significant contributor to that growth.

"I think Monster has a good deal of brand equity in Europe which will allow it to be successful and successfully compete against existing products," Astrachan said.

Damian Witkowski, analyst with Gabelli & Co, estimated that international revenue currently accounts for nearly 7 percent of Hansen's total sales.

"Considering the distribution strength of Coca-Cola Enterprises, we believe Hansen can at minimum capture a 10 percent share of the European market by 2012," Witkowski said.