Wednesday, November 07, 2007

What Happens if the FDA "Leashes the Beast" at Hansen Natural?

Downing an energy drink may boost blood pressure as well as energy, according to a study presented at the annual meeting of the American Public Health Association in Washington, D.C. earlier today.

These findings follow results from another study presented at the Scientific Sessions on Sunday, which detailed how students who consumed
alcohol mixed with energy drinks were twice as likely to be hurt or injured, twice as likely to require medical attention, and twice as likely to ride with an intoxicated driver, as were students who did not consume alcohol mixed with energy drinks.

[Ed. note. The effort to encourage the consumption and popularity of mixing alcohol/energy drinks moved forward in February 2007, when Anheuser-Busch announced a deal with Hansen Natural to manage the sales, distribution, and merchandising of Monster energy drinks at bars, restaurants, and nightclubs.]

Although touting "natural" ingredients like the amino acids arginine, taurine and creatine, or B vitamins and exotic extracts like guarana and ginseng, the "energy" in these drinks, scientists suspect, comes instead from a very familiar source. "The underlying pharmacological mechanism is
caffeine, pure and simple," says Roland Griffiths, Ph.D, a professor in the psychiatry and neuroscience departments at Johns Hopkins School of Medicine. "There’s no scientific basis to believing that [other] additives are integral to the stimulating effects of the energy drinks."

The energy drinks in the blood pressure study contained 80 milligrams of caffeine and 1,000 milligrams of taurine (about the same amount as found in the average 8 fl. oz. energy drink).

The 10Q Detective brings to the attention of investors that a substantial portion of sales at fast-growing Hansen Natural Corp. (HANS-$58.02) is derived from energy drinks, with more than 89 percent of its 1H:07 sales coming from energy drinks (up from 84.7% of net sales last year).

For the six-months ended June 30, 2007, net sales at the juice and beverage maker were $410.6 million, an increase of approximately $134.8 million, or 48.9%, from net sales of $275.8 million for the six-months ended June 30, 2006. The increase in net sales was primarily attributable to increased sales by volume of Monster Energy brand energy drinks. To a lesser extent, the increase in net sales was attributable to increased sales by volume of Unbound Energy energy drinks and Rumba brand energy juice.

Tear into a can of the meanest energy supplement on the planet,
MONSTER energy. We went down to the lab and cooked up a double shot of our killer energy brew. It's a wicked mega hit that delivers twice the buzz of a regular energy drink. The MONSTER packs a vicious punch but has a smooth kick ass flavor you can really pound down. So when it's time to unleash the beast within, grab a MONSTER and GO BIG!

Increased risk of seizures, insomnia, panic attacks, and diabetes—there is a growing concensus among public health researchers that high-caffeine energy drinks can have adverse health consequences. [
online beverage caffeine content database]

Hansen’s management acknowledges that future growth will be even more dependent on the introductions of new energy drinks in the fast-growing, $3.2 billion a year energy-drink market. If the FDA steps in to “leash the beast,” the share price of Hansen Natural could be in for an unhealthy stumble.

Hansen shares declined $3.05, or about 5 percent, during afternoon trading.

Editor David J. Phillips does not hold a financial interest in Hansen Natural Corp. The 10Q Detective has a Full Disclosure Policy.

1 comment:

DrJeff said...

Here's what I don't understand: how does the body NOT react negatively to an energy/alcohol drink? Caffeine is an upper, alcohol is a downer. Here you've got the hypthalamic-pituitary-adrenal axis pulled in two different directions (depending on how stiff the drink is), so the body's GOT to suffer a side effect.