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Meet the man who gave Red Bull wings

Idealog January/February 2007, page 74. Photographs by Alistair Guthrie

Josef Roberts turned Red Bull, a little-known energy drink with legal problems, into a pop phenomenon in New Zealand and Australia—and made millions in the process. He talks exclusively to Idealog about guerilla marketing, taking on the big boys, life after the Big Deal, and the down-home Kiwi company he plans to build into a global superbrand

At two in the morning, pushing through the crowd in an underground jazz bar in an unfamiliar part of Slovenia, Josef Roberts decided he needed a new tipple. He’d had a big night with some serious bar-hopping but suddenly he just didn’t want more booze.

“I remember walking up to the bar thinking well, now what?” says Roberts. “I just can’t stomach another drink. And then I saw those little blue and silver cans.”

Roberts had stumbled across Red Bull, the drink that would become his obsession for years to come and eventually make him a very rich man. Today Red Bull sells about 2.5 billion cans a year, but this was 1995, when Red Bull was a hard-to-get drop with a cult following in the Austrian snowboarding scene, and Roberts almost missed out. The barman had just the three cans and he wasn’t going to sell them to some pissed Kiwi on holiday. “He said no way, these are not for sale. These are illegal.”

Illegal? Who wouldn’t want to try Red Bull after a pitch like that? Roberts was intrigued, and insistent—he says he eventually paid $150 for the three tiny tins. The barman must have thought his customer was both wealthier and drunker than the average punter, but Roberts then did something very clever: he drank one Red Bull, noted the unusual taste and its pleasing effect, and put the other two cans in his pocket.

Soon after, he embarked on a mission to get the Antipodean rights to the drink. He couldn’t have anticipated the difficulty he’d have to convince Red Bull, the struggles with customs and health officials, the whispering campaigns and the cease-and-desist orders. But he had drive, ideas and, most importantly, he understood why Red Bull could be huge. He knew how to sell the drink through grassroots guerrilla marketing, rather than TV ads and competing on price. He did it so well that he joined Red Bull’s international marketing team and four years ago sold his company to Red Bull for megamillions.

It’s not his first business success story; in his twenties, in the short-lived glory days of Rogernomics, Roberts lived it up as a jetsetting property developer, and then crashed and burned when the New Zealand economy tanked. It was an unpleasant lesson in reality, he says, but it taught him heaps. Now he’s heading back into the fray, determined to turn a Ponsonby burger store into a global superbrand. How? And why?

Josef Roberts is the ninth child in a family of ten children. His European parents moved to New Zealand from Europe after the war; his father is the sixth generation of a line of architects, which Roberts says spurred his interests in design and building. When he started school at Kapiti College—where Peter Jackson was a classmate—most of his siblings had left home and his parents were content to let him make his own mistakes. Roberts remembers that he was constantly encouraged.

“I think there was a lot of benefit for me in being youngest,” he says. “My parents had mellowed significantly by the time I came along … I never got told you couldn’t do this or couldn’t do that, so I never thought in terms of boundaries and limitations. That’s something I carry with me now.”

That confidence and freedom are probably part of the reason Roberts found himself living the life of a business bigshot almost straight from school—but when it all turned to custard before he was 30, he realised his boundaries needed to be redrawn.

He left school after the sixth form and started his property career at the bottom, working on houses his architect father was renovating. Later he worked for a division of Brierley Investments in the heady corporate world fostered by the reforms of Roger Douglas. “I learned all about greed and valuation and how you buy something one day and revalue it the next day. Well, really all that was wrong, but it took me a while to actually understand that.”

By 1987 he was working as property developer Graeme Bringans’ assistant and living it up. “He was a very interesting property developer and I learned a lot,” he says. “I was lucky to work closely with him for a year or two. And those were the good old days: we had our own corporate jet, the champagne was flowing, and it was all just invincible, you know. That’s the word that sums up those days.”

“I think there was a lot of benefit for me in being youngest. My parents had mellowed significantly by the time I came along … I never got told you couldn’t do this or you couldn’t do that, so I never thought in terms of boundaries and limitations. That’s something that I carry with me now.”

The stockmarket crash of 1987 proved no-one was invincible, but the party wasn’t over yet and Roberts was still doing property deals. “I was pretty young and I continued to operate in that way of thinking, as I think a lot of New Zealanders did. I got involved in a deal where I was a guarantor, and everything turned to shit in 1990 in New Zealand. The property market crashed soon after the sharemarket, and I was a part of that process. And in the end I had to go bankrupt.”

Roberts, only 28 and full of confidence and ambition, was devastated. Today he can laugh about the experience but it’s clear he did some serious soul-searching. He says bankruptcy taught him a lot: he’d tried and failed, but realised risk is a part of business and he would be stronger for the experience. The fear of failure often holds Kiwis back, he says.

“There were a lot of people going broke in those days. The 80s were an amazing time, but they weren’t sustainable. All the things I had learned, I realised couldn’t be sustained and they wouldn’t work.

“That part of my life, while at the time it wasn’t particularly pleasant, enabled me to come back much stronger, much smarter and to learn much quicker. People in New Zealand need to understand it can’t be just a one-way success story all the time. To be successful you’re going to have losses. To have profits you’re going to have losses. But these times make you much stronger. You learn a lot fast.”

By the time of his Slovenian adventure in 1995, Roberts was looking for a business to get his teeth into, and he recognised the potential of Red Bull. But finding who actually made the stuff wasn’t easy; the drink originally hails from Thailand, but the manufacturer didn’t respond to his inquiries. Eventually he tracked it down to a company in the tiny Austrian town of Fuschl am See, jointly owned by the Thais and former toothpaste marketer Dietrich Mateschitz. But the Austrians too were uninterested and kept stonewalling. “I sent faxes and I rang and nothing came of it. It kept going like this for a month. And I had this little blue and silver can sitting on my desk and every day I’d think I’ve got to do something.

“So I decided to just get on a plane and go there. I followed my instincts and sort of turned up, and they weren’t interested in seeing me. ‘Sorry, if you haven’t got an appointment …’ It was cold, it was snowing in Austria and I left dejected, went back to my hotel that night and thought bugger this, I’m going to try again tomorrow. I can’t remember whether I returned two or three times, but I literally stood outside. They had an electric lock on the door and finally someone said to come in.”

Red Bull kept Roberts waiting in the reception area for an hour, but eventually he met the international marketing director, who became more interested when he realised Roberts had no experience in the beverage business. Red Bull was busy trying to get its product into the US and had little interest in Australia and New Zealand, but the executive suggested Roberts produce a marketing plan. “If we like it, we’ll talk.”

It didn’t take him long—he’d spent long enough thinking about it. The plan was to guerrilla-market the product, keeping down promotional costs and leveraging its perceived illegality. They gave him the New Zealand rights and if he did a good job, they said, perhaps they’d give him Australia too. Josef Roberts, former bankrupt, was back in business.

Kiwis were sceptical, however. Roberts, without any experience in marketing or the beverage industry, now had the job of selling Red Bull to people who mostly had never heard of it, for a premium price. The wee cans would sell in bars for $5 or $6 each even though they contained no alcohol. Red Bull would be underground, edgy, exclusive. But Roberts had the marketing right:  “The business plan was very much about a soft launch, seeding the product with key people and opinion leaders—we call them that now, but they were really just people I knew. Build an underground interest in this product … before it even goes into the market as such, let’s have it at parties, let’s have it turning up at the right places.” A few Kiwis already knew about Red Bull and would tell their friends about the select few places you could buy it. A buzz began to build.

But he’d been selling Red Bull for barely a week before the government commanded him to stop.

“As an entrepreneur you haven’t really made it until you can build a global brand. Take a brand from New Zealand and make it global! If I could achieve that I would feel that I’ve made a contribution to New Zealand and also to myself.”

Red Bull contains caffeine and taurine, a compound sometimes used in bodybuilding products. It was originally marketed as a health tonic but has frequently come under official examination—not least because it’s often mixed with alcohol by drinkers who want a pick-me-up.

Roberts was selling Red Bull in the UK version of the can with a health claim that the authorities objected to. Each of the 70,000 or so cans in the shipping containers on his lawn and the street outside his Western Springs home would need to be repackaged without the offending claims. Even more was on the way.

The solution? Scissors and stickers. Roberts decided to relabel each tin.

“We were going through the silver, sticky paper. There wasn’t that much of it in the country—we were buying it from Invercargill and Dunedin. We had just about everyone and anyone, friends, relatives, just sitting there cutting these stickers and putting them on the cans. And out they’d go.”

When word spread that Red Bull had fallen foul of the authorities, demand went through the roof. In an echo of the Slovenian hard-sell, punters would buy Red Bull and immediately pull off the sticker. They’d tell their mates: this stuff is illegal. Everyone wanted to be drinking from the forbidden tin. Bar managers complained that the undersides of their tables were plastered with discarded stickers from Red Bull cans.

“It was the best thing that ever happened to us,” says Roberts. As quickly as the tins were relabelled, they would be delivered to a thirsty public. “There were just two or three bars and literally they would sell out every night. I’d get a call at one in the morning asking for more, and we’d race down with them in the boot of the car and give them a bit more product.” Eventually, Roberts reckons, at least 200,000 cans of Red Bull were relabelled and put on the market.

Most sales were still made through word of mouth; Roberts spent some money on hip marketing like setting up a recording studio in the Auckland office and sponsoring touring DJs and house parties. “We were doing things in a way that was unconventional. We were delivering products out of the back of our cars, turning up at two or three in the morning. Whenever we got a phone call, everybody had to do whatever it took. Sleep was just something that you grabbed somewhere along the way.”

Red Bull was impressed and took a one-third stake. Roberts could have started to enjoy some of the proceeds but he continued to reinvest. His eyes were turning to Australia. “I knew Australia was probably going to take a similar view to New Zealand, in terms of the consumer, and therefore the approach should probably be quite similar to what we’ve done here. What I hadn’t experienced was the [Australian] bureaucracy and this became apparent to me quite quickly. I started by shipping a container and seeing what would happen. It was impounded by customs and they said no, no, no … this is highly illegal.”

“I got involved in a deal, and everything turned to shit in 1990 in New Zealand. The property market crashed soon after the sharemarket, and in the end I had to go bankrupt.”

Roberts wasn’t the first Kiwi entrepreneur to be smacked down by Aussie bureaucracy, but he may have been the most persistent. Because Australian law allowed for imports of up to ten litres, he started selling Red Bull by mail order over the Internet to thirsty Aussies. Roberts and Red Bull lawyer Paul Devereux would visit Canberra every three or four months to inquire whether the law had changed yet. The Kiwis would sit at one end of the table drinking the Red Bull they had brought; the Aussie customs officials would sit at the other munching on sandwiches and politely declining offers to sip from a blue and silver can. “The young ones would reach for it—and you’d see the older ones going oh no, we’ll have none of that sort of thing.”

Chris Preston was a lawyer on the customs team. Roberts, he recalls, was “a very dynamic guy. He was obviously very keen to get the product onto the market, but recognised that it was going to take some hard work.” Preston rated his chances as “basically zip”—Australian law at the time frowned on food products with added vitamins, and customs officials were keen not to be seen to soften their attitude, he says—but Roberts kept at it. When the Aussies visited New Zealand for a meeting with their local counterparts, Roberts arranged for a chillybin of Red Bull to be delivered. “I kid you not, they must have had an art director place each ice cube,” says Preston. “When you opened the esky the whole thing just shone at you. They had a hot young guy to be the delivery boy, and all of the office girls were absolutely swooning over this guy as he delivered this. It’s interesting marketing.”

One day Roberts and Devereux turned up to find Preston was missing from the customs team. He’d joined a large Sydney law firm. As soon as he left the building Roberts was on the phone and Preston had a new client.

Preston found the way into Australia. The Trans-Tasman Mutual Recognition Act, or TTMRA, meant imports had to be accepted from New Zealand. Bingo. Preston wrote to Australian officials and on Christmas Eve, 1998, he phoned Roberts to tell him that the bureaucrats agreed. Red Bull could be sold in Australia.

It was a ready market. The Aussies who had been buying Red Bull over the Internet were eager to buy their tipple in bars and stores, and they told their friends: this stuff was illegal. Roberts set up shop in a ramshackle old house in Melbourne, and repeated the marketing plan from Godzone. The local drinks companies watched in disbelief as Red Bull staff rushed around the cities selling from the backs of cars. Cowboys, they thought. They waited for the company to fail so they could step in and take over. And waited.

“What the corporates didn’t understand was that this was the only way to do this,” says Roberts. “The whole thing about product out of the boot of the car was all about building the personal service and the attention, and giving the confidence to bar owners that they didn’t need to bring 15 cases in that night if they weren’t confident about it. Start with five and if you start running out we’ll be there within the hour. That built an incredible rapport.”

By 2002 the job was done in New Zealand and Australia. It was time for a change. “I always felt my skills were in getting things going and my interest was in new stuff, new ideas and building things up.” He had an agreement with Red Bull that he could sell at any time, so they bought him out and Roberts, about to turn 40, suddenly had time on his hands and serious cash in his pocket.

How much cash? One industry source estimates he took home in the region of $30 million. Roberts won’t confirm that, citing a confidentiality clause in the contract. “Let’s put it this way: it was certainly enough that I wouldn’t have to work again. And I strongly considered not working again.”

But it’s not so easy for creative types to just do nothing. He took a stake in People Limited, a mortgage broker and commercial financier, and moved the company into funky new premises on Ponsonby Road (he had a hand in the design of both the People and Red Bull buildings and other property, and is a strong believer in well-designed workplaces: “People work in crappy offices and I think a lot of negative energy comes from those places. A lot of good ideas come from just being in a nice building.”) He went to northern Queensland to “buy a bach” and ended up buying Trinity Beach, a seaside mansion in Cairns that had been let go. Roberts has spent “well over A$10 million now” and the results, from the website, are stunning. The house was completed in September; Roberts hopes to spend up to eight weeks a year there, but in the meantime it’s rented to the super-rich on vacation.

But in the end, Roberts wanted another business to build.

Dominion Road on a grey Wednesday in mid-October isn’t exactly pumping, but the Burger Fuel store is packed with burger fans waiting for their fast—or at least fast-ish—food. People are clearly happy to sit and wait a few minutes to get a better burger. The store is clean and efficient but you couldn’t mistake it for a Burger King or McDonald’s—there are no plastic toys for the kids or badges and stupid hats for the staff, and no-one would call the product ‘junk food’. Across the road a much bigger Wendy’s is almost empty; its customers may have received their food a bit quicker but they don’t look as if they’re enjoying it.

The first Burger Fuel store opened on Ponsonby Road in 1995. Today there are 15 outlets in New Zealand and a Sydney store was due to open as Idealog went to press. It’s taken a decade to get to this size but, if all goes to plan, the next few years will be very busy indeed.

Idealog can confirm that Burger Fuel makes a damn fine burger, but to take on the global market, as Burger Fuel intends to do, you need more than just a good product. But Roberts is investing his time and money in the company (he owns a 50 percent stake). 2007 is all about Australia and a year later he and Burger Fuel founder Chris Mason plan to open in the spiritual home of the hamburger, the USA.

Are they for real?

Absolutely, says Roberts. “Burger Fuel is a very special brand. It’s the Red Bull of food. That’s how I see it.

“There are very few brands to me that really have the X factor. It’s something that’s hard to put your finger on, but it is something that you can touch, you can sense and you can feel. You know there’s something more behind the brand than what they’re selling.”

Burger Fuel has production systems that allow it to turn out custom-made burgers quickly, he says—eight minutes is the goal—and he reckons its hamburgers are about as healthy as hamburgers get. “If you can overcome the issues around creating individual burgers and beating the problems associated with fast food, you can do very well. Because in the end everyone needs to eat, and everyone is looking for convenience. But I think they’re also looking for something more than that—they want to, once again, be part of something a little bit bigger. And that’s what we try to create with Burger Fuel.”

Mason remembers Josef Roberts turning up at the opening of his first store, even before his Red Bull adventure. They’d frequently knock heads, too, as Roberts tried to get Red Bull into Burger Fuel and Mason would demand a better price.

“We have the highest-priced burgers in New Zealand and he had the highest-priced drink,” Mason says. Roberts’ cash injection means that Burger Fuel now has international trademark protection and the ability to move into new markets quickly. He’s also brought drive, belief, experience and speed, says Mason.

But does the world really need another hamburger store? A burger from New Zealand? “The burger market is extremely tired,” says Roberts. “Even the Americans are over it.” First stop: Los Angeles. “Hollywood to start—right next to the Viper Room! I’d like to build probably five stores between Hollywood Boulevard and Santa Monica, looking for the cultural nucleus of those areas. Where’s the buzz, where’s it happening?”

“When word spread Red Bull had fallen foul of the authorities, demand went through the roof. Everyone wanted to be drinking from the forbidden tin. ‘It was the best thing that ever happened to us,’ says Roberts.”

Too many people, he says, think business today is just conducted online. “There are far fewer people getting on planes and sniffing the pavement, walking around and looking at things. The first thing you do is go and search the net and you’re already making a conscious decision when you’re doing that about whether the idea is good or bad.”

How will Roberts and Mason deal with the corporations who control agricultural production in the US? How can they keep quality standards up in the country that has perfected the not-for-the-squeamish business of farming on an industrial scale?

That, says Roberts, is exactly the kind of business Burger Fuel won’t be doing. “They’re the challenges we’re going to have to overcome. We’re already talking about owning our own Burger Fuel farms over there. Wouldn’t it be good to meet up with small farmers, for example? Let’s think differently. We’re going to look for more organic ways, we’re going to go right into the production and see how we can be different.”

It’s an ambitous plan and, like Red Bull before it, could draw a cult following among people who want something different from the usual fare. But why is he taking a punt like this, when he could be relaxing at Trinity Beach and enjoying his millions? “It’s a good question. I think it’s just wanting to keep building things and doing things. To me as an entrepreneur you haven’t really made it until you can build a global brand. Take a brand from New Zealand and make it global! If I could achieve that I would feel that I’ve made a contribution to New Zealand and also to myself.

“In the end, though, I want to have a good time. I think Burger Fuel can create that. We’re really looking forward to our own jet with a bunch of flames down the side and one of those big blowers sitting out the top of the engine, in true Burger Fuel style.”

3 comments

Roberto Sedelmayr

2006-12-16 20:42:59

Thanks for the opportunity to read this article and meet this "Wing Man". Success and creativity walk together.

Andrew Nicol

2007-04-06 09:37:29

The road to overseas subsidiaries it would seem is littered with more stories of failure than success.

I love the way Josef Roberts summs up moving into Aussie, not being a cowboy, but still being really edgy.

dustin sanders

2008-02-18 10:42:07

hey my name is dustin sanders and im almost 18 years old and you guy's "red bull" are the biggest investment of my money i have ever spent and the reason for that is because i love it and i love it so much that i got it tattooed on my lower stomach and i have red bull all over my truck and my truck is the color of red bull almost and what im trying to get to is that i want to know how hard it is to get sponcored by red bull so if you could write my back thanks

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