From Jet Lag to Billionaires: The Behind the Scenes Story of How Two Friendly Co-Workers Turned Their Sugary Sweet Homemade Brew into The Top Selling Energy Drink
And passed on a combined family fortune worth a whopping $60 billion
In not so shocking news, every country on earth with the exception of Antarctica have cows of various breeds.
For instance, on a small island located in the English Channel referred to as Guernsey, that’s where you’ll find brown and white cows known as a Guernsey. (And if you read the March 1, 2024, issue of Just One Good Idea you’d remember I mentioned these cows.)
In India, which has the largest population of cows estimated at over 330 million you’ll come across the Alambadi breed. Their horns actually grow backwards, and have a well-defined hump near the base of its neck.
This breed of cow is mostly used for agricultural related work such as plowing fields.
Travel to Africa and you’ll likely see a cow known as the Ankole. In fact it’s one of the earliest indigenous breeds to that country. It’s a rather large animal with long white pointed horns. Farmers breed them for both milk and beef.
If you visit Thailand, you’ll no doubt see a type of cattle known as the Guar. To say it’s a large cow is an understatement because a male can weigh as much as 2,000 up to 3,000 pounds. Females range from 1,500 up to 2,200 pounds. They have a prominent ridge on their back with horns that curve inward.
The color of their horns is some shade of pale green or yellow throughout the greater part of their length, but the tips are always black. The horns grow to a length 24 to 45 inches.
In truth it’s the third largest animal in the world after rhinos and elephants. It feeds mostly on natural grasses and tree leaves.
While it’s fair to say most Americans have probably never heard of this breed of cattle, it’s quite popular in Thailand. Not only that, but the people of Thailand also have a nickname for the Guar … the Krating.
The Guar is so popular that a beverage made of water and sugar, with a few additional ingredients was named after it … Krating Daeng.
That drink became so popular that last year a whopping 12.1 billion cans were sold worldwide.
You’ve probably had one yourself, know a few friends who have or at the very least have seen it on store shelves.
It’s just that here in the U.S. and many other countries where it is sold, it goes by a different name.
In this issue, I’m going to tell you the name of the drink, which you’ll instantly recognize. I’ll also share the story of how two friendly co-workers turned it into a beverage empire now valued at over $9.6 billion.
But first let me tell you about the small Austrian village of Fuschl Am See.
So Clear You Can Drink It
Take Highway B158 traveling toward the northern part of Austria near the German state of Bavaria, and you’ll pass through the little village of Fuschl Am See.
When I say little, I mean it … the village is roughly 13 miles long with a population of about 1,500 residents. Although small, it’s home to one of the most beautiful emerald, green lakes in the country, Lake Fuschlee.
For the longest time, this little village and the area that surrounds it was owned by the Arch Diocese of Salzburg. In fact the lake itself was known as the “courts kitchen” because any fish caught in it was automatically given to the Archbishop.
Besides its coloring, what makes the lake stand out is the crystal clearness of the water. On many a day, you can sometimes see up to 20 feet deep.
Yet it’s also so clean the water in the lake is deemed drinkable.
Tourist and visitors that travel here do so not only for the chance to swim in the lake but also for hiking. Fuschl Am See boasts many natural hiking paths around the lake and into the nearby hills.
The village is home to some prominent wealthy people including Formula 1 driver Scott Speed.
Scott began his driving career at the age of 14 when he started in the karting circuit. He won the SKUSA Super Pro Title, 2 IKF Grand Nationals, and 3 IKF regional titles.
In 2002, he won the Rock Island Grand Prix in 125cc Shifter Karts. Then, he switched to Formula series in 2001, competing in the US Formula Russell where he became a champion.
Fuschl Am See is where billionaire Dietrich Mateschitz lived. He was born in 1944 in the southern province of Styria, Austria into a family of teachers.
"Didi" as he was called by family and friends decided on a different path and instead of teaching studied economics in Vienna.
After his studies were finished, he landed a job as a salesman selling detergents for the British consumer goods company, Unilever. Turns out Didi had knack for selling products and in fact became quite good at his job.
A few years later he left Unilever and was appointed the role of marketing director for the German cosmetics company Blendax. If you’re not familiar with Blendax, one of its most popular products is toothpaste, selling roughly 43 million tubes per year.
But Didi didn’t get wealth selling toothpaste.
Nope, his money came after a business trip he took in 1982 to Thailand. That’s where he met pharmacist Chaleo Yoovidhya, who at the time had invented a special kind of energy drink that Didi thought could become a global phenomenon.
A Little Boost Will Do You Good
Chaleo was born to poor Chinese immigrant parents in the northern province of Phichit, Thailand.
His family wasn’t wealthy and to make money, they raised ducks and traded them along with fruits at the local market.
As a young child and through his teenage years, Chaleo worked for his parents, helping them care for the ducks and tending to the fruit garden. He also went to the market with his parents, aiding in selling their goods.
Once he became an adult, he moved to the capital city of Bangkok. And it’s here he got a job selling antibiotics for a small pharmaceutical company.
Like Didi, Chaleo was quite a gifted salesman. Perhaps he developed that skill working with his parents in the local farmer’s market. Either way, he made enough money that in the early part of 1960, he formed his own pharmaceutical company, TC Pharmaceuticals.
The company wasn’t making Chaleo ultra rich, but it did generate enough income for him to provide a comfortable lifestyle for his family.
His real wealth came when Chaleo created an energy drink that would put him (and his family) on Forbes list of billionaires.
That homemade brew was a mix of water, cane sugar, caffeine, taurine, inositol and vitamin B. In 1976 Chaleo released it to the public, calling his drink Krating Daeng, which roughly translated into English means … red bull.
Now you have to understand energy drinks were already popular in Thailand, and Chaleo necessarily didn’t create something brand new.
But it’s the “who” he marketed the drink to that made all the difference.
You see at the time energy drinks in Thailand were marketed mostly to a more affluent group … those who could easily afford to pay a little more money.
Chaleo’s one good idea was selling his beverage to what he saw as the ignored market … the working class. We’re talking day laborers, farmers, construction workers and truck drivers.
And boy oh boy was he right.
In just two years, Krating Daeng became the most popular energy drink in all of Thailand.
A Cure for Jet Lag
When you work as a salesman for a rather large consumer goods manufacturer, you are often asked to travel the world.
And so was the case with Didi Mateschitz. In 1982, Didi was asked to travel to Thailand to meet with Chaleo because TC Pharmaceuticals was one of Blendax’s distributors for that region of the world.
While you might get used to the running through busy airports, staying in hotels, and eating at restaurants, you might never ever get used to jet lag.
And that’s what Didi experienced after an 11-hour flight from Germany to Thailand. Looking for a little pick me up, Didi bought a can of Krating Daeng.
After drinking the entire can, Didi no longer felt tired. In fact he felt as if it had “cured” his jet lag.
Didi’s “this is a hit” spidery senses kicked in and he immediately knew the drink could be sold in other countries. In his pre-arranged meeting with Chaleo these friendly co-workers didn’t just talk about normal business, they also talked about how to take Krating Daeng worldwide.
The two decided to form a separate partnership outside of their regular business dealings between Blendax and TC Pharmaceuticals. The new company they created would become the main marketer, distributor and manufacturer of Krating Daeng.
Of course this new business adventure would require start-up money and they began seeking funding. But they had problems getting investors to “buy into” their new business. After all, there were already canned beverages on the market so what’s the big deal about this one?
Not wanting to give up on the idea of taking Krating Daeng worldwide, both Didi and Chaleo decided to put their own money toward the business. So in 1984, each one managed to pull together $500,000 to get their business up and running.
And they decided to capitalize on the idea of selling Krating Daeng as an energy drink, not just an ordinary beverage. That would later prove to be a critical business decision.
As for their partnership agreement, Chaleo and Didi each received a 49% stake in the company with 2% going to Chaleo’s son.
While Chaleo’s family had majority ownership of the company, it was agreed that Didi would run the entire operation.
And one of his first orders of business was changing the name of the drink so that it would appeal to a wider audience. And the name he chose … Red Bull Energy Drink.
A Little More Fizz Please
In 1987, the company sold its first can of Red Bull in Austria. But to Didi’s and Chaleo’s dismay, the drink didn’t sell all that well.
In fact they struggled with sales for a couple of years. Seems westerners weren’t actually that thrilled with the taste of Red Bull.
So for the next three years, Didi and Chaleo tinkered with the ingredients.
Eventually the two stumbled upon a formula for Red Bull that contained less sugar but also had more fizz (carbonated) when the can was opened.
And guess what? It worked.
In the early part of the 1990’s, Red Bull took off across Europe. It was selling in multiple countries including Hungary, Slovenia, and Germany. By 1994, Red Bull was available in the United Kingdom.
As for the U.S. market, Red began appearing on supermarket shelves in California in 1996. And by the year 2000, it was being sold throughout the Middle East.
Since its launch in 1987, more than 100 billion cans of Red Bull have been sold worldwide, including over 12 billion in 2023 alone. To this day, the original Krating Daeng is still sold in Thailand.
Coming Full Circle
That little village I told you about earlier … FuschL Am See, well that just happens to be where Red Bull is manufactured right near lake Fuschlee. In fact water from the lake and natural springs is used in making the drink. The sugar used comes from the sugary beet whose root contains a high amount of sucrose.
In 2023, for the first time in the company’s history, sales reached $10 billion. Today Red Bull is the most popular energy drink the world over (actually creating that category) and third most valuable soft drink behind Coca-Cola and Pepsi.
Red Bull has also expanded from energy drinks into sports.
The company owns Red Bull Racing, the German ice hockey team EHC Munchen, the US soccer team New York Red Bulls, Austria football team FC Red Bull Salzburg, and the Formula 1 racing team Alpha Tauri.
In 2007, Red Bull decided to get into the music business with the launch of Red Bull Records, which is located in Santa Monica, California.
Sadly Chaleo died in 2012 at the age of 88, leaving his family with a fortune worth $33 billion.
Didi died in April 2022 at the age of 78, leaving his family with a fortune worth over $27 billion.
They say proof is in the pudding … and there’s no doubt these two men turned their one good idea of selling a beverage as an energy drink into a multi-billion dollar enterprise.
Awesome Quotes by Awesome People
“The value of an idea lies in using it.” - Thomas Edison
Loved your story, Sandy! Not a fan of the drink, but hats off to Chaleo and Didi!!