Pepsi Is Ready To Party Like A Rockstar

Unsplash/Ja San Miguel

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“Ugh, another news story about competition in the energy sector… we get it already.”
*rereads article* 
“Oops, nevermind.”

Pepsi is expanding its energy drink offerings, snatching up Rockstar for a refreshing $3.85B. The deal, which is expected to close later this year, will put it ahead of Coke in the battle to diversify its non-soda drink options.

The war between the top producers of diabetes in a can has gone on since the mid-2000s. Pepsi already peddles a few E.Ds of its own under the Mountain Dew brand, and has partnered with Starbucks to sell coffee… also in a can.

Coke, however, has a significant stake in Monster, and even partnered with Kobe to create its own line of energy drinks… much to the dismay of Monster, which lost an arbitration claim last year for the development of the new product. Its board members proceeded to punch through the conference room’s drywall.

There is stiff competition in the space, though, as the two sovereigns of the soda space are also competing in a market saturated with more than sugar. The OGs, Monster and Red Bull, have a firm grip on the industry, and newcomers like Bang are making noise.


Pepsi has already been slinging the 16oz Rockstar cans as a part of a distribution agreement the two sides have had since 2009. Through that agreement, Pepsi was limited in what it could do with its Mountain Dew energy drink line and faced restrictions on collaborations with other energy drink companies. This deal nixes that contract language, allowing Pepsi to do, essentially, whatever tf it wants.

And speaking of doing whatever he wants…

Russel Weiner, Rockstar’s founder, has long been the bad boy of the energy drink space. He got his start at Skyy Vodka, and when Skyy didn’t want to run with his energy drink proposal, he mortgaged his condo for $50k and set sail on his own.

Nowadays, he notably owns mansions in Cali and Florida and has a big a** yacht, which was nearly sunk by a bridge in Miami. Don’t worry, no weiners were hurt.

Weiner and his mother owned Rockstar entirely, with momma Weiner holding down a quarter of equity and a cushy CFO gig. The official press release did not specify whether Russ and his mother would remain on the job once the deal closes.

The bottom line…

This is the first big move for Pepsi’s new head honcho Ramon Laguarta, who took the reins as CEO in 2018, And it’s a good one (at least on paper) since the energy drink market is set to expand 5.9% annually through 2024, compared to just 1.4% for soft drinks. Yep, the numbers check out.

It’s worth noting that even being a household name and the number three player in the space, Rockstar is still a relatively small fish compared to the two titans of the energy drink game. To put things into perspective, Monster’s market value is 10 times what Pepsi just paid at $35.5B, and Redbull just sold a record 7.5B cans worldwide last year. For what it’s worth Redbull also holds a monopoly over the competitive plane racing and Flugtag circuits.

Water Cooler Talking Point(s)

💧 “I’m rich, biatch!” – Russel Weiner (Nick, The Water Coolest HQ)


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The Water Coolest is a daily business newsletter consisting of business news, financial advice, and unfiltered commentary. Delivered fresh in your inbox every morning so you're ready to snap necks and cash checks. Written by Tyler Morrin, AJ Glagolev, Nick Ellis, and Ian Barto.