Energising the market

08 January, 2010

Energy drinks, once a niche in the soft drinks market, have established themselves as a mainstream category that’s here to stay.

Whether bought for a quick pick-me-up, a vitamin boost, a sports enhancement or as a mixer with alcohol, they’ve fast become a core part of consumer’s shopping baskets.

Value sales accelerated 3.4% to £706.8 million in the year to October 3, 2009 – up from £683.7 million in 2008, according to Nielsen. Volume sales also climbed 4.3% as new entrants piled into the market. The sales figures might prove energy drinks aren’t just a passing fad, but what’s steering their growing popularity??“Part of the reason for this growth is an increased focus on advertising due to more challenger brands coming to the fore,” says Kate Hodson, marketing manager at Kick Energy producer Global Brands. “We’re seeing a shift in consumer trends as more people start to include these drinks as part of their everyday needs, even replacing coffee in terms of beating that morning and afternoon lull.”?Tom Smith, trade communications manager at Red Bull, agrees: “Working harder and having less time on our hands are just a couple of contributing factors as consumers

ook to products which will help them get the most from their day, whether on the go or in the car, in the boardroom or at the gym.”?But will continued growth be reliant on new flavour and ingredient innovations, or is aggressive marketing key to maintaining the category’s good fortunes??For Kick Energy, it’s all about boosting consumer awareness through advertising and partnerships with motor sports and grassroots-level football, says Hodson. In 2010 Global Brands will be investing in a national ad campaign, branded taxis and a major PR push? in a bid “to put the Kick Energy brand in front of over 15 million consumers”, she says.

And new pack sizes – such as Red Bull’s bigger 47.3cl can – are vital in making sure the category continues to flourish, Smith believes. He also identifies shot-sized energy drinks as an innovation that’s propelling energy drink sales. The success of energy shots in the US prompted Red Bull to roll out 6cl bottles in original and sugar-free variants in October. Containing the same amount of energy as a 25cl can, the shots are uncarbonated and don’t need to be chilled?.

Pocket-sized shotsThe trend for pocket-sized shots started in North America, where the category launched just over four years ago. In that time, sales have swelled by 2,400% and in 2009 the market was worth US$500 million?, according to Rob Arnold, chief executive of Voltz. They appeal to consumers who wouldn’t consider a sugary, fizzy drink “ such as sports enthusiasts, gym users, cyclists and the like”?.

“It also appeals to drivers, shift workers, clubbers and affluent career people. The low calories, beneficial health aspects and lower-volume liquid at ambient temperature add to the demand both in terms of consumer appeal and convenience.”?Their rapid rise in popularity is also due to people “looking for that instant boost without the time to savour a whole drink”, Hodson adds.

For retailers it’s important shots are positioned where impulse purchases are made, such as by the till, Arnold advises. “This has proven to increase sales compared with positioning in the refrigerator or on a shelf elsewhere in the store,” he says.

Putting them on the counter also reduces the risk of theft, which is what Keswick-based Open All Hours has been forced to do.

“People can easily put them in the palm of their hand and slide them into their bags,” says owner Alan Dunn, highlighting one of the drawbacks. “They’re an invitation to steal. Unless you have someone watching them, they’re going to disappear,” he says.

And while many labels say the product is unsuitable for children, producers fail to define what age a child is, according to Dunn. “There’s no guidance. If I sold four or five of these to a kid, who goes hyper and jumps in front of a bus, the parents are going to ask why I sold them this.” Dunn recently put up a sign in his shop saying energy shots could only be sold to over-16s – but that led to problems. “We started getting a bit of abuse from kids under that age, and staff were getting? hassle,” he says.

To avoid this problem, retailers should compare the different products available before committing to stocking a particular brand, Arnold recommends.

“It’s important to understand the difference between shots as some have health benefits whereas others are basically sugary, caffeinated pure water. The amount of caffeine is one of the key problems for children – some shots have very large doses which is not recommended for under-18s,” he says.

However, retailers who do their homework will find energy shots and drinks offer a very nice return.




Bookmark this


Site Search

COMMENT

Donald Trump: the US has much to learn from history

The reasons Donald Trump should not be left in charge of a shopping trolley, let alone the keys to the White House, are plentiful and well-documented – from his use of the word “bigly” and lamentable business legacy to his dubious post-modern feminist principles, quite astonishing lack of political acumen and, most worrying of all, his bewildering hair. 

Click for more »
Upcoming events

Polls

Is blended Scotch overshadowed by single malt in retailers?

  • Yes
  • No
  • Don't know

Facebook

Twitter