It sure has been a bang.
In the span of almost 10 years, Bang Energy has gone from being created to number three in energy drinks overall to dropping in sales and being up for sale. Maybe it’s something in the name?
And what seems notable, especially for those keen on wordplay and coincidence, it was a company with bang in the name that’s caused the trajectory change. Well, it was actually an Orange Bang and a Monster. (Wonder what Shakespeare would do with this in light of his rose inquiry?)
What’s happened in the last few years saw Orange Bang and Monster Energy Drink team up in court and taken down what had been fast growing Bang Energy. Now there’s talk of a sale. Vital Pharmaceuticals, the maker of Bang Energy, filed for bankruptcy at the end of last year following those court defeats. So this sale is after those nine figure settlements.
First, a quick look at what went down in the courts in recent years between all the Bangs and a Monster that brought on Bangs sale talk.
“A California federal court has upheld an arbitrator’s $175 million award for Monster Energy Co and orange-drink maker Orange Bang Inc against Bang Energy maker Vital Pharmaceuticals Inc for trademark infringement. Vital did not meet the high standard of proving that the arbitrator’s award was “completely irrational,” District Judge Dale Fischer said in a ruling published Friday.” – Reuters
That was in the summer of 2022, after an arbiter a few months earlier in April found Bang broke an earlier settlement. A settlement from a suit that settled over a decade earlier with Orange Bang.
“VPX Sports broke a 2010 settlement deal with Orange Bang by using the “Bang” name outside the scope of the agreement, the arbitrator said in a 177-page Monday ruling that was made public in Monster’s Wednesday request for the court to affirm the award.” – Reuters
So what happened was Orange Bang and Monster teamed up. An energy drink version of the enemy of my enemy is my friend. And this connection brought Bang Energy to court and they won.
“Family-owned beverage maker Orange Bang and Monster Energy Company have asked an U.S. District Court in California to confirm an interim award of $175 million in damages and a 5% royalty on all future net sales of Bang-branded products — plus nearly $10 million in attorney’s fees and costs — after an arbitrator found that VPX was liable for breach of contract and trademark infringement by falsely claiming its products contain creatine.” – Bevnet
The ruling became one of the largest trademark infringement awards in US history. Yet for Bang maker Vital Pharmaceuticals it’s been another type of game change, an ending of sorts. Vital Pharmaceuticals Founder CEO Jack Owoc was ousted in March of 2023 and documents showed sale of the company was in the works.
Orange Bang and Monster joining forces stopped the fast growing trajectory of Bang and the energy drink sector. It’s notable because almost a decade before their separate efforts against Bang ended in settlements and the company rolled onto becoming number three. Guess there is power in unity.
“In 2008, Monster sued Owoc’s company, alleging that it used deceptive marketing to boost sales of some of its products. Owoc denied the allegations, and the case was settled.” – Bloomberg
However, it was the previous case with Orange Bang that caused a blow to Bang this recent time around.
“The origins of the case go back over a decade and stem from a 2009 trademark infringement filed by Orange Bang against VPX; according to court documents, pursuant to the settlement agreement in that case, VPX was granted permission to use the Bang trademark on creatine-based products or other beverages that are marketed exclusively in vitamin and supplement channels.” – Bevnet
The origin story of the connection how Orange Bang and Monster got connected is notable. Especially since everthing happening now. From Bevnet:
“A decade later in 2019, Orange Bang claims to have discovered that Bang had been violating the settlement agreement by marketing beverages that did not contain creatine. That September, after filing a motion to compel arbitration based on a provision in the agreement, Bang agreed to enter binding arbitration proceedings with VPX.”“
A Bevnet article asked a good question:
“How is Monster involved? According to Hueston Hennigan, which represented the plaintiffs in the suit, Monster agreed to assist Orange Bang in its lawsuit against VPX and was granted partial assignment of Orange Bang’s rights under its agreement with VPX. In June 2020, both companies initiated arbitration against VPX with the American Arbitration Association.”
A Bloomberg article goes into more detail.
“But one day in August 2019, a man named David Fox, owner of a small California juice maker, called Monster and asked to speak with Sacks. Decades earlier, Fox had cooked up a recipe for frothy, sugary fruit juices and begun selling them from dispensers in stores and restaurants. He named his company Orange Bang Inc. and trademarked it. In 2009, after Owoc had begun selling a now-discontinued pre-workout drink also called Bang, Fox sued Owoc for trademark infringement. A year later they settled, agreeing that Owoc could keep using the name Bang as long as he stuck to a narrow fitness niche: The products had to contain a considerable amount of creatine and could be sold only in gyms and supplement stores. When Bang, the energy drink, exploded across the country, Fox’s lawyers sent cease-and-desist letters to Owoc’s general counsel, saying the deal had been breached. Owoc brushed aside the letters. And so Fox, at the encouragement of a colleague who’d seen news about Monster’s tussle with Bang, called Sacks. A few days later the two met and struck an agreement to join forces against Owoc. The matter eventually went to arbitration.”
And so now we are at a moment when the sale of Bang is in the air. There had been talk back in August 2022 of a Keurig Dr Pepper take over deal but that fell apart within a day of it being reported. Experts are thinking that Monster could be in the lead.
“Bang Energy, which filed for bankruptcy in October, reportedly plans to sell the business, according to recent filings, with Monster Energy the “best-positioned to acquire” the brand, Stifel analyst Mark Astrachan said in a research note. He supported that assertion by noting that Monster is Bang’s largest creditor in bankruptcy and is a co-rights holder to a 5% perpetual royalty/license for use of the Bang beverage trademark. At the same time, he said Monster is challenging Bang’s ability to transfer the Bang trademark license to an acquirer, which would give Monster “near total control over Bang’s future.” While the Stifel analyst noted there are no public indications that Bang and Monster are in talks, a deal makes sense on several levels.” – Food Dive
So will Monster take over Bang? After teaming up with Orange Bang, the former competitors may have a new era. Possibly less litigious for all.
What this all would mean for the multi-billion dollar energy drink market and customers remains to be seen.
