Considerable vitality and growth for Energy drinks
Sales and volume soar for this soft drink category
By Alexandra Salas

The ongoing health and wellness trend is at the root of current and future functional beverage and functional food development. Chicago, IL-based Mintel International Group, a global market research company, forecasts the market to grow to $2.9 billion by 2010.

According to Mintel the $1.1 billion energy drink market has experienced phenomenal growth of over 700% in current terms between 2000 and 2005. Since 1999, the number of new energy drinks has increased by at least 100 every year.

Since 2004 sales of this category are up 41.5 percent, supported by new packaging (multi-packs and 16-ounce cans) as well as in hybrid innovations including low-calorie, low carbohydrate, and sugar-free versions. A fairly recent application for energy drinks features pairing or mixing with alcoholic beverages; vodka is a popular energy drink pair.

According to the Canadean Global Sports & Energy Drinks Report “The U.S. is the No. 1 consumer of energy drinks in the world on a volume basis.”

Canadean’s definition of the Energy Drinks category states: Energy Drinks – marketed as energy-enhancing products, mainly carbonated and typically containing taurine, guarana, glucose and other exotic herbs and substances as well as added minerals and vitamins. The category includes still or carbonated, ready-to-drink products, non-ready-to-drink powders and concentrates. It also contains fruit and non-fruit flavored products. All powders and concentrates are expressed in ready-to-drink (rtd) volumes.

Stephanie Coleman, corporate marketing manager of Canadean says, “On a per capita basis however, it ranks just outside the top 10 in the world at number 11, behind countries like Ireland, New Zealand, the UK and Austria.”

Top 10 global consumers of energy drinks on a per capita basis are:
1. Ireland
2. New Zealand
3. United Kingdom
4. Austria
5. Japan
6. Switzerland
7. Thailand
8. Saudi Arabia
9. South Korea
10. Netherlands
(Source: Canadean Global Sports & Energy Drinks Report)

Key companies operating in this sector in the US in the last year included: Red Bull, Rockstar Inc, PepsiCo, Hansen Natural Corporation, Cadbury Schweppes and Coca-Cola, says Coleman.

Energy Drink Consumers

Targeted groups for energy drinks include teens, young adults, and athletes. According to Mintel research, energy drink manufacturers give special attention to “every young lifestyle…. Many, linked to extreme sports, represent adventure and rebellion. Others seem to offer a party image. Some niche brands have aligned with personal interests, such as music and spirituality.”

Hispanics, which demonstrate greater purchasing power – expected to reach $1.2 trillion in 2010 -- are an important target market for energy drinks. Ciclon International’s Tormenta and Everlast Nutrition’s Explosion Tropical are two examples of energy drink manufacturers addressing this community.

Novel energy drinks product developments include:
PepsiCo: Amp Energy Drink; Liquid Management: Liquid Ice Energy Drink; Hansen’s Natural: Rumba Energy Juice; Everlast: Premium Energy Drink; RMG: e10 Energy Drink; Monster Beverage: Monster Energy Assault; Big Brands: Wild Buzz Energy Drink and Performance Beverages: Red Beast Energy Drink.

According to Beverage Digest (2005), Red Bull is still the energy drink category leader. Companies with the largest market share in the U.S. carbonated soft drink category are: Coca-Cola Co., Pepsi-Cola Co., Cadbury Schweppes, Cott Corp., National Beverage, Big Red, Red Bull, Hansen Natural, Monarch Co., and Rockstar.

Category growth (standing at approximately 1,000 players, according to Mintel) is expected to slow down due to market saturation that may result in some consolidations.
 

Energy Supplements

According to a Mintel International Group report the energy supplements category has garnered the support of a broader, mainstream audience.

Active ingredients in this energy platform of products feature glucose, caffeine and taurine, ginseng and various vitamins and minerals, and proteins and/or carbohydrates for added energy benefits.

Sales of energy cereal bars such as PowerBar, BALANCE Bar, and CLIF Bar, energy drinks such as such as Red Bull, SoBe, and KMX, and liquid/powder protein drinks such as GNC ProPerformance, MET-Rx, Richardson, EAS Myoplex and EAS AdvantEdge increased from $2 billion in 1998 to $5 billion in 2003. Young and old as well as athletes comprise the energy supplement consumer who seeks stimulation boost and healthier foods and beverages.

Mintel projects sales will reach $8 billion in 2008.


Functional Foods Trend Update

ACNielsen Online Consumer Opinion Survey (2005) included 38 countries in North America, Latin America, Europe and Asia. Findings indicate that the main reason why consumers purchase functional foods, which market fortified claims, is the added health benefit.

According to ACNielsen, in five of the 10 categories studies, Americans are more likely than consumers globally to buy such products. The main reason indicated for not buying functional foods is taste.

Products categories in this survey are:
* Whole grain, high fiber products
* Iodine-enhanced cooking salt
* Cholesterol-reducing oils and margarines
* Fruit juices with supplements/vitamins
* Yogurts with acidophilus cultures/probiotics
* Milk with added supplements/vitamins
* Bread with added supplements/vitamins
* Fermented drinks containing good bacteria
* Soy milk
* Cereal with added folate

The survey polled over 21,000 respondents in Brazil, Chile and Mexico, the U.S. and Canada Australia, China, Hong Kong, India, Indonesia, Japan, South Korea and Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, 17 European countries and several emerging markets.