But fast-forward to 2013 and the UK energy drinks market is now worth £1.2 billion (Mintel), making it the third-largest soft drinks category.
Heavily bankrolled brands like Red Bull, Monster and Relentless sit alongside many flavours of Lucozade, a raft of newcomers and supermarket own-labels.
The category is only set to grow as these brands continue to innovate and invest in eye-catching ad campaigns, with Mintel forecasting it will rise 63% in value by 2017.
And perhaps the greatest accolade of all came a few months ago when the phrase “energy drink” was listed for the first time in Merriam-Webster’s dictionary.
But with great power comes great responsibility, and suppliers are now coming under increasing pressure to prove the drinks actually do what they say on the tin, and ease the fears of a powerful health lobby that claims they could cause death and disease among UK consumers.
The biggest threat to the category’s stability comes from the other side of the Atlantic, where the US Food & Drug Administration reveals five people may have died over the past three years after excessive consumption of Monster Energy.
In the UK, Conservative MP Rob Wilson has called for urgent research into energy drinks because “they may cause a serious health risk”.
Mintel analyst Amy Price says: “Around three in ten adults are sceptical that sports and energy drinks do what they claim.
“Health remains a barrier to consumption, with more than a quarter of non-users saying they are not very good for health.
“This has caused the market to react by increasing the amount of ‘natural’ energy drinks, with new products, including Monster’s Absolute Zero energy drink, containing no sugar or calories, while the likes of Pussy are positioned as ‘all-natural’.
“This could go some way to win over those who do not buy into the category because of health concerns, particularly women.”
Pussy’s marketing manager Matt Williamson says: “Consumers are much more health-conscious these days and offering natural alternatives to the synthetic energy drinks is a must.”
Red Bull, the market leader which commands a 22% share of the category, is keen to point out that the caffeine content of its 25cl can is equivalent to a cup of coffee.
Trade communications manager Tom Smith says: “Red Bull is available in 148 countries because health authorities across the world have concluded that it is safe to consume.”
What sets Red Bull apart from coffee is taurine. Urban legend has it that the taurine in Red Bull is extracted from bulls’ semen, but the company says it is produced synthetically, and moves potassium and sodium in and out of the body’s cells to boost the metabolism.
Nevertheless, Red Bull is well aware of health concerns about sugar levels in energy drinks and it will invest £2 million in promoting its sugar-free variant throughout
2013 as part of an overall marketing spend of £22 million that sees the return of Red Bull Cliff Diving, Red Bull Soapbox and Red Bull Revolutions in Sound.
Simon Green, marketing director at Kick Energy supplier Global Brands, adds: “We are aware that in the US there have been some headline cases but our product, if used sensibly, as you would use coffee, will deliver on its claims.
“We will continue to build Kick and market it responsibly.”
Green has been delighted with the growth Kick has seen in the off-trade recently. He says: “We are stronger in the on-trade but in the off-trade Kick is growing at a rate of knots, up 34% (IRI).”
Mintel says one of the category’s few weaknesses is that consumer penetration stands at less than 50% and less than a fifth of consumers are regular drinkers.
But Green says: “The category’s consumer base is growing, at the expense of soft drinks.”
There have been more than 200 new energy drink launches in the UK in the past five years, so the key question for retailers is which drinks to stock.
Smith says that within the category, “the top twenty SKUs deliver a massive 72% of value sales which means retailers should have a focussed range and not give space to products which add little or no value”.
He believes customers should ensure the split of shelf space is shared between premium (35%), mainstream (30%) and value (35%)
Green adds: “We recommend retailers have brands which fill a number of roles. We deliberately price ourselves lower than the market leaders so we are an entry point for coming into the category. We offer better value – and we deliver that for consumers and retailers – and we have a high-quality liquid which really stands up in blind tastings and we have a clearly defined pack with computer game link-ups to attract gamers so we offer something different.”
Williamson says: “While shelf space is always at a premium and often, justifiably, given to the bigger brands, we believe there should also be a strong case for stocking different brands like Pussy, as they add value to the category and lead to additional sales, without detracting sales from other brands.
“Even though times are tough, it is still important to stock premium brands such as Pussy which offer good cash margins in comparison to the own label-brands and a balance should be struck.”
Value is essential for smaller retailers and as shoppers are faced with a tide of budget energy drinks – Polish brand N-Gine Blue has been sold for 25p at Tesco, Asda has sold Emerge at 30p – supermarkets have been accused of devaluing the market.
Suppliers believe the key is to counterbalance these budget cans with innovative new drinks like Red Bull’s cranberry, lime and blueberry variants and CCE’s new Relentless Lemon Ice.
Smith says: “Offering consumers a range of new flavours will deliver against the number one objection to energy drinks which is taste and ultimately drive penetration into the category.”