Getting a boost

by Allison Sebolt
Share This:

In an on-the-go society where a good night’s sleep is sometimes considered a luxury, more than 30% of all teenagers and those under 25 years of age said they drink energy drinks, according to Mintel International, Chicago.

According to Information Resources, Inc., a Chicago-based research firm, energy drink category sales were nearly $815 million in 2007 for supermarket, drugstore and mass merchandise outlets, excluding Wal-Mart Stores, Inc.

"People realize there is a better way to be or a better way to feel out there," said Carl Sperber, marketing director for Living Essentials, Novi, Mich., the company that produces 5-Hour Energy. "If you don’t have to settle for feeling tired after lunch … then why settle?"

Mintel said unpredictable schedules, lifestyle image branding and the slightly taboo nature of energy drinks has helped draw interest from younger consumers. In addition, growth in energy drinks may be attributed to a proliferation of distribution channels. The consumer base has expanded as well, with products targeted to women.

Energy drinks are expected to grow by 53% in total volume between 2007 and 2012, according to Euromonitor International, Chicago. Euromonitor also said energy drinks have replaced coffee as the preferred source of caffeine for many consumers. According to Mintel, African-Americans and Hispanics also show a higher rate of purchasing energy drinks and a higher frequency of consumption than other demographic groups. Mintel said the key for makers and marketers of energy drinks is to broaden the market and customize formulas, flavors and marketing campaigns to fit other demographics.

Mintel noted energy drinks are mostly sold in higher-priced single-serve units, which has contributed to growth, but supermarkets and mass merchandisers also are stocking multi-packs for consumers concerned with value.

After the initial success of Red Bull, most growth in energy drinks has been through cycles of innovation from various manufacturers, according to Euromonitor. Monster and Rockstar became competitors to Red Bull by launching 16-oz sizes for the same price as an 8.5-oz Red Bull. According to I.R.I., Red Bull energy drinks had sales of $342,680,200 in 2007, up 23% from the previous year. Energy drinks from Monster Energy posted sales of $135,930,100 in 2007, up 42% from the previous year. For the year to date through June 15, Red Bull energy drinks had sales of $165,498,400.

Energy drink shots are another option on the market. Euromonitor described energy drink shots as products packaged in miniature servings of 1 oz to 2 oz and being the soft drink equivalent of an espresso coffee only smaller and with a high dose of caffeine.

"Given the rapid expansion of the energy drinks sector, which grew by 16.5% by volume worldwide last year, it would be no surprise if some of the big hitters came on stream with their own energy shot formats over the medium term," Euromonitor said. "Specifically, energy drinks is a sector that will need to continue innovating if it is to attract a wider spectrum of consumers."

Living Essentials makes 2-oz energy shots with ingredients such as vitamins B6, B12, B3, B9, citicoline, tyrosine, phenylalanine and caffeine to provide energy. The drinks have no sugar, about as much caffeine as a cup of coffee and four calories. There is also a decaf variety with only 6 mg of caffeine and an extra strength version.

Mr. Sperber said 5-Hour Energy has caught on with working adults trying to make it through the day, and the company worked to branch out from many energy drink products on the market targeted to teenage boys or young men.

According to the Global New Products Database from Mintel, other recently introduced energy shots include products from 418 Energy and Talon Energy.

For those concerned with healthfulness in an energy drink, there are various options on the market as well. Honest Tea, Bethesda, Md., has a Citrus Green Energy Tea, Jasmine Green Energy Tea, Organic Honey Green Tea and Sublime Mate tea — all of which are organic. The products have ingredients such as green and white teas and yerba mate along with caffeine.

Syzmo, an organic energy drink from The Organic Beverage Co., Austin, Texas, uses green tea, yerba mate, coffee fruit, gurana and caffeine for energy. Syzmo also boasts a low glycemic index, which is the ranking of carbohydrates’ effect on blood glucose levels. As a result, the drink should provide more long-lasting energy, according to the company.

In 2006, Mintel reported 222 new energy drink products followed by 182 in 2007. Despite the 2007 downturn, 238 new products have been introduced so far in 2008 through July 8.

This article can also be found in the digital edition of Food Business News, July 22, 2008, starting on Page 39. Click
here to search that archive.

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.



The views expressed in the comments section of Food Business News do not reflect those of Food Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.