Monster has its sights set on China.

NEW YORK — Monster Beverage Corp. has tackled a monster of a challenge: growing in China.

The Corona, Calif.-based maker of energy drinks has experienced success in a number of international markets, including Germany, France, Chile and Japan. Now, the company has its sights set on China, a country where Thai Red Bull maintains a dominant share of the market.

“We have achieved national distribution but with a focus on 40 cities targeting selected customers,” Rodney C. Sacks, chairman and chief executive officer of Monster Beverage Corp., said during a Jan. 18 investor meeting in New York. “So we have a single s.k.u. (stock-keeping unit) in China. We’re continuing to put focus behind that s.k.u. We want to establish that s.k.u. … We will be looking later this year to introduce a second s.k.u. So we will expand the range in China, expand our presence on shelf, but we do want to first make sure that we’ve established our core Green energy drink in China before we start rolling out with line extensions.”

Rodney Sacks, Monster
Rodney C. Sacks, chairman and c.e.o.

A major hurdle for Monster has been the price point of Thai Red Bull, which Mr. Sacks said sells at a price point that is lower than what the industry considers a “premium” energy drink in the rest of the world. While there is room for a brand at a lower price point than Thai Red Bull, Mr. Sacks said Monster is focused on walking before running.

“We have to understand the country,” he said. “We have to understand the consumer. We want to establish Monster.”

Hilton H. Schlosberg, vice-chairman and president, said the company launched the Monster brand in China at a price point of approximately $1 per can, a move that was done consciously “because the Chinese consumer wants an American brand.”

“They want an American brand that they can aspire to,” he said. “And it’s what the bottlers wanted as well. So it was a very conscious decision to go with Monster in the first instance and grow into better par markets.”

Another challenge for Monster in China has been product placement. Mr. Schlosberg said the company has teams from the United States working with their Chinese counterparts to educate bottlers on where the Monster product should be positioned to develop an energy drink category. In some cases, the product has been placed in coolers next to Coca-Cola and Sprite.

“We’re not going build the energy category if our product is next to Coke, next to Sprite,” he said. “It’s got to be next to Red Bull. It’s got to touch Red Bull. And the strategy has been to work on the placement of the product in stores in China, and that’s exactly what we have been doing and will continue to do.”

One way Monster is looking to differentiate itself from Red Bull is carbonation. Thai Red Bull is noncarbonated and tends to skew toward older consumers in China. Monster is carbonated and is targeting a younger consumer base.

“We just felt there was no purpose in coming with another energy drink and just copying whatever everybody else was doing,” Mr. Sacks said. “The three or four others did, just copy the same thing, and just they have no innovation. So we did look at that, and, yes, we understand the market is primarily in noncarbonated. But just as we did in America 15, 16 years ago, we looked at dissecting the market and making our own way and not just copying the existing brands.

“We want to create our own identity for Monster. We want to create an identity with what we believe is the more important consumer, the consumer that wants to look to America to trends. That is looking at action sports or gaming or things of that nature. And there will be a time and place for us to introduce a noncarbonated version. That’s not hard. We didn’t lower the carbonation level to what we now ordinarily have in the U.S. because of taste reasons. So our carbonation level of Monster in China is lower than in the U.S., but we think it is the right strategy. We think that we need to get more shelf presence. We need to communicate that it’s an energy drink, and that’s the problem we were addressing. We need to help educate retailers to — and persuade them they need to — create a cluster of energy drinks to create the category because there isn’t a category now. When they do that, that will get the consumer to trade up and to buy a value-added energy product. And that’s really what our challenge is.”