5-Hour Energy Inventor Likes 'Toiling in Obscurity'

Sept. 11, 2011— -- Ten years ago, the whole market of energy shots didn't even exist. Now, they seems to be for sale at every convenience store counter in the nation.

But the first one was 5-Hour Energy, the 2-ounce energy shot, dreamed up by Manoj Bhargava, who is now estimated to have a net worth of $1.3 billion, according to Forbes. And the only problem Bhargava has with all this attention -- and it really does seem to bother him -- is that we're talking about it out loud.

"I didn't want to be known," he said. "People say, 'I didn't want to toil in obscurity.' I like toiling in obscurity."

Obscurity becomes difficult though, when your billion-dollar product comes under official scrutiny. New York State's Attorney General has issued subpoenas to Bhargava's company, as well as two others, Monster Beverage and Pepsico, which makes AMP, seeking more details on how their products are marketed and advertised.

Not even the American Beverage Association, which represents the energy drink makers, knows the details of the subpoenas. However, the ABA said in a statement that they see little reason for worry, noting that they "have adopted a number of voluntary policies pertaining to energy drinks over the last several years: voluntarily listing total caffeine amount on packages; voluntarily displaying an advisory statement on packages, noting that energy drinks are not recommended for children, pregnant or nursing women and people sensitive to caffeine; voluntarily not marketing energy drinks to children; and voluntarily not offering energy drinks for sale in K-12 schools."

The ingredients on energy drinks are not fully spelled out because the Food and Drug Administration's regulations do not require supplement ingredients to be listed and legally these energy shots are supplements, neither a food nor a drug. But Michael Jacobsen of Science in the Public Interest, a non-profit watchdog for nutritional awareness, said kids are going after the small bottles.

"I don't think the average teenager has any idea that caffeine could pose any health risk at all," Jacobsen said. "Clearly it can cause jitters and insomnia. It's addictive so it can cause withdrawal symptoms."

Today, Bhargava still stands by his product, telling "Nightline" in a statement that the inquiry is "routine."

For one thing, Bhargava said his company's somewhat corny commercials are not designed to appeal to kids. He said the company does not market to children, period.

"We stay away from everything that's related to kids because we have to respect the concern of parents," he said. "Whether that are right or wrong, it doesn't really matter. What matters is they're concerned."

So how much caffeine is in a 5-Hour Energy shot? Bhargava said it is about the amount in a cup of premium coffee. His view is that amount is not enough to raise a fuss over.

"It's overblown when it's in small quantities," he said. "It's correct when it's in large quantities, but it's like this. Water is good, but if you have too much, you drown. So is water bad or is it good? It's both."

In general, Bhargava is an entrepreneur who taught himself not to worry about too much, including frills. The billionaire's office is undecorated to the point of drab. He said he gives away close to 90 percent of his money to charities in India.

Bhargava lived in India until he was 12 years old, when his father moved the family to the Detroit area. Good at math, Bhargava got into Princeton, but finding it pointless for him, he quit after one year.

But for a guy who seems to take it easy, he is pretty competitive. His many imitators, who seemed to think it was about the bottle size, have made almost no dent in Bhargava's market share. He owns this energy shot market, but what he doesn't own are fancy cars or houses, because he said in India, he was taught to "be practical."

"The more you consume, the more insecure you are," he said. "It's the nature of the world. The simpler stuff. If your mind is still, you're the happiest."

Right now, that will help, as what's in the bottle is a question getting government attention even as it sells and sells and sells.