Bang Energy is continuing its energy drink business in 2024.
However, after a series of lawsuits, Bang has gone into debt of around one billion dollars, and its parent company has filed for bankruptcy. Thus, Bang may be discontinued soon.
In 2020, Bang became the highest energy drink seller in the USA, leaving behind companies like Red Bull and Monster. Let’s find out how Bang has fallen into this severe situation in 2023.
Bang Energy’s parent company, Vital Pharmaceuticals, filed for Chapter 11 bankruptcy on 10 October 2022. Thus, Bang is in a critical situation and will probably go out of business soon.
Vital Pharmaceuticals established Bang Energy in 2012 as an energy drinks manufacturing company. According to Statista, Bang’s annual sales began to rise exponentially in 2019.
For a comparison of Bang’s annual sales, you can check the yearly sales of 2018 and 2019. In 2018, Bang sold around 10.7 million 192 ounces cases, whereas it increased to 41 million 192 ounces cases in 2019.
Moreover, it left two of the most popular energy drinks brands, including Monster and Red Bull, behind in 2020. And then, it took the number one position for the most-selling energy drink brand.
But within two years, Bang lost its position drastically due to controversies and lawsuits of other beverage companies, such as Orange Bang and Monster Beverage. In addition, Sony Music also sued Bang’s parent company.
With all these lawsuits, Vital Pharmaceuticals went into debt, near the point of no return. Thus, it had to file for bankruptcy. But again, the company has made changes to stay in business.
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What is going on with Bang Energy drinks?
Several companies have taken legal action against Vital Pharmaceuticals, the parent company of Bang Energy. To overcome the lawsuits, the company had to pay a massive amount of money and went into debt.
Bang sold energy drinks named Bang Energy RTD, advertising that it contained Super Creatine. Super Creatine is an element that bodybuilders use to grow muscles. The company advertised its drink in front of Gyms.
As a result, gym people started buying Bang’s energy drink. However, Orange Bang and Monster Beverage tested and found that Bang’s energy drink does not contain Super Creatine.
And that was it. Monster and Orange Bang sued Bang Energy and won the legal action. As a result, Bang had to pay around 175 million dollars in damages to Orange Bang. Besides, Monster won 293 million dollars in that case.
Moreover, in October 2021, Sony Music sued Bang for using its music without taking a license from the music company. Besides, Prince Rogers Nelson’s suit also won against Bang Energy.
Despite all these lawsuits and money losses, Bang Energy donates 250 million dollars to a super PAC of America First Action that Donald Trump endorsed.
In a word, in recent years, Bang Energy has encountered severe monetary losses. But it could not recover from these losses and had to file for bankruptcy.
What happened with Bang and PepsiCo?
In April 2020, Vital Pharmaceuticals entered into a distribution agreement with PepsiCo for the distribution of Bang Energy drinks in the United States.
However, for unknown reasons, Vital Pharma sent an agreement termination to PepsiCo in November of that year. But PepsiCo remained the exclusive distributor of Bang till 2023 due to an emergency arbitrator rule.
Bang sued PepsiCo for foul play and miscommunication. Also, PepsiCo threatened the retailers to take Bang’s drinks only from PepsiCo services. PepsiCo and Bang terminated the exclusive distributor agreement in June 2022.
According to Jack Owoc, the former chief executive officer of Bang Energy, PepsiCo and Bang do not have any dispute in 2023. The two companies have resolved and settled their disputes completely.
Then again, Bang and PepsiCo do not have any agreement existing in 2023, as the agreement was set to be terminated this year.
Sources:
- https://www.statista.com/statistics/1269256/us-case-sales-of-bang-energy-drinks/# – Bang drinks annual sales from 2015 to 2021 (Statista)
- https://www.reuters.com/legal/monster-wins-ban-bang-energys-super-creatine-advertising-2023-04-12/ – Monster won the banning of Bang’s advertisement (Reuters)
- https://www.foodnavigator-usa.com/Article/2022/10/14/What-s-next-for-Bang-Energy-At-least-in-the-short-term-Bang-Energy-will-not-be-going-out-of-business – Bang Energy in debt of one billion dollars (Food Navigator USA)
