Java energy, Monster profits

When driving by a gas station the other day, I saw a sign announcing the latest hit on one of the most amazing success stories in the last years. Hansen Naturals (HANS) has been riding wild on the base of its very successful line of energy drinks, Monster. The sign that I saw advertised the latest addition to their Monster product range: Java Monster. In my view, a stroke of pure genious. Energy drinks as a category has seen double-digit growth in the last years, ever since Red Bull was introduced in the US several years ago. Hansen Naturals was able to take the lead in the category through a shrewd mix of great, cutting-edge products, aggressive distribution, and a vigorous line-extension strategy. Much has been said about Hansen Naturals and the wild increase in its share price. Many have questioned its valuation. The stock reached an all-time high north of $68 in early November, just to fall back to around $40 after what some considered a soft quarter. Yet, the share price has recovered to $49 in just a few weeks. The growth story behind Hansen Naturals is far from over. This latest introduction of Java Monster is just one more indicator of the firm grip the management has on its consumers' trends and lifestyles. Uniting two of the most relevant staples in today's Gen-Yers (energy drinks and coffee) in one product is quite smart, and as mentioned, it only demonstrates that Hansen Naturals is way capable of keeping its finger in the pulse of this important segment, and that it has the creativity and the executional drive to decisively act on the insights. As long as Monster continues to show such a proactive and vibrant vitality, profits will folow. And so far, it seems there is plenty of energy behind Monster.