Manoj Bhar­gava.

Who?

Yes that is what I said too…

While this is a pri­vate com­pany, I found it to be a fas­ci­nat­ing story since it is always inter­est­ing to hear where these out of the blue block­buster prod­ucts come from.   I had no idea it was a local story as well.  I had heard Detroit Lions coach Jim Schwartz was at the Super Bowl, on the dole (i.e. pitch­ing) 5 Hour Energy and it seemed like a strange con­nec­tion, but now I see why he was a choice (again, local).   Believe it or not I've never imbibed any sort of energy drink such as Mon­ster or Red Bull, nor have I touched this 5 Hour Energy thing – but appar­ently I am in the minor­ity as these are huge sell­ers.  It's a long write up in Forbes – some snip­pets below:

• In eight years 5-Hour has gone from nowhere to $1 bil­lion in retail sales. Truck­ers swear by it. So do the traders in Oliver Stone’s 2010 sequel to Wall Street. So do hun­gover ­stu­dents. It’s $3 a bot­tle, and it has made Bhar­gava a fortune.
• His com­pany, Liv­ing Essen­tials, is the biggest player by far in the ­energy-shot mar­ket, and not because 5-Hour is so deli­cious. Chalky cough syrup is more like it. The rea­son Bhar­gava has won is that he plays tough. Sit­ting in that ceme­tery are a dozen or so neon copy­cats with names like 6-Hour Power and 8-Hour Energy. Each has been sued, bul­lied or kicked off the mar­ket by Liv­ing Essen­tials’ lawyers. In front of each are lit­tle plac­ards with a skull and cross­bones drawn in felt-tip pen. Bhar­gava points at the grave­stone of one of his late com­peti­tors and says with a chuckle, “Rest in peace.”
• The pri­vately held Liv­ing Essen­tials doesn’t report rev­enue or prof­its, but a source with knowl­edge of its finan­cials says the com­pany grossed north of $600 mil­lion last year on that $1 bil­lion at retail. The source says the com­pany net­ted about $300 mil­lion. Check­out scan data from research firm Sym­pho­nyIRI say that 5-Hour has 90% of the energy-shot mar­ket. Its clos­est com­peti­tor, NVE Phar­ma­ceu­ti­cals’ Stacker brand, has just over 3%.
• Yet Bhar­gava, 58, is so under the radar that he barely reg­is­ters on Web searches. His paper trail is thin, con­sist­ing pri­mar­ily of more than 90 law­suits. This is his first press inter­view.  Col­leagues and acquain­tances uni­formly describe Bhar­gava as “hum­ble,” and he seems proud of his fru­gal lifestyle: his ancient flip phone, his cheap office fur­ni­ture, the mod­est two-story home he shares with his wife and 20-year-old son. Yet, over veg­e­tar­ian lasagna at Antonio’s, his favorite strip-mall Ital­ian joint off Detroit’s Twelve-Mile Road, Bhar­gava says, apro­pos of noth­ing: “I’m prob­a­bly the wealth­i­est Indian in America.”
• The rise of 5-Hour began in the spring of 2003, when Bhar­gava found him­self at a nat­ural prod­ucts trade show in Ana­heim, Calif. At one booth the sales reps ped­dled a 16-ounce con­coc­tion claim­ing to boost pro­duc­tiv­ity for hours. Bhar­gava took a swig. “For the next six or seven hours I was in great shape,” he says. “I thought, Wow, this is amaz­ing. I can sell this.”
• Right away, though, he knew 16 ounces wouldn’t sell. He didn’t want to com­pete with Red Bull, at the time new to the mar­ket. Nor did he want to share fridge space with Coke or Pepsi. “I thought, If I’m tired, am I also thirsty? Is that like hav­ing a headache and a stom­achache? It didn’t make any sense.” He glanced at the ingre­di­ents label and made a men­tal note. Six months later his ver­sion was on the shelves, two ounces of ­caffeine-infused B vit­a­mins such as niacin mixed with acids like tau­rine.

Dis­clo­sure Notice

Any secu­ri­ties men­tioned on this page are not held by the author in his per­sonal port­fo­lio. Secu­ri­ties men­tioned may or may not be held by the author in the mutual fund he man­ages, the Pal­adin Long Short Fund (PALFX). For a list of the afore­men­tioned fund's hold­ings at the end of the prior quar­ter, visit the Pal­adin Funds web­site at http://www.paladinfunds.com/holdings/blog

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