KANSAS CITY — Sales of energy beverages are increasing as consumers seek drinks containing caffeine and any other energy-inducing ingredients to boost their alertness and productivity. Along with choosing leading brands like Red Bull, Monster, Rockstar and Celsius, consumers are reaching for energy brands being marketed as healthier and better-for-you hydration options.

The National Institutes of Health has called energy beverages the most popular dietary supplement consumed by teens and young adults in the United States next to multivitamins. Most consumers are men between the ages of 18-34, and nearly a third of teens between 12-17 years regularly drink them, NIH said.

NielsenIQ (NIQ) data for the 52 weeks ended Feb. 22, 2025, show overall US sales of energy beverages hit $21.5 billion during the period. That was a 3.8% jump from the previous year and reflects purchases of both energy drinks and energy shots from all retail channels including convenience stores, said Chris Costagli, vice president and food insights lead for the Chicago-based market research firm.

“It’s a huge space, and it’s really dominated by energy drinks, which is about $21.1 billion in sales,” he said.

Private label is another growth area, he added, comprising a small amount within the category of about $11 million yet growing by 120%.

Switching ingredients

Energy beverage formulations typically contain some combination of carbonated water, caffeine, sugar, stimulants, herbs, vitamins, amino acids, antioxidants, flavorings and colorings. Where they tend to differ is in the proportions of the ingredients and whether they come from natural or artificial sources.

Positive Energy has taken a clean label approach to differentiating in the energy beverage category.

| Photo: Positive Energy

The caffeine in energy beverages can be sourced naturally or synthetically, and the levels can vary from 70 to 240 mg in a 16-oz can or bottle. For comparison, there are approximately 35 mg of caffeine in a 12-oz can of a regular carbonated soft drink and about 100 mg in an 8-oz cup of coffee.

Some energy beverage brands advertise that they don’t use anything artificial and are reducing their ingredient panels to the minimum to appeal to the trend toward clean labels and healthier beverages.

California-based Positive Beverage is one example of this. Chief executive officer and co-founder Shannon Argyros called Positive Energy “the cleanest energy beverage on the market today” because she said it contains green tea extract, stevia, natural flavors, no colors and no sucralose or erythritol.

“There’s nothing in there that doesn’t need to be in there,” she said. “That’s definitely what sets us apart.”

Argyros said her incentive for creating Positive Energy was to give her son a better energy beverage than she had found on shelves.

“I looked at every nutrition panel in the store and couldn’t find a product I was comfortable giving him,” she explained.

Dye-free is another feature consumers are increasingly searching for in products, said Sally Lyons Wyatt, global executive vice president and chief adviser of consumer goods and foodservice insights for the market researcher Circana, Chicago.

“There’s always a part of the population that understands ingredients and what’s in the package because they study it,” she said. “They’re purposeful at looking at labels and looking for products with clean ingredients, simple ingredients.”

Growing retail sales

Looking into where consumers are buying energy beverages, NIQ research found growth in the more value-oriented retail outlets, Costagli said. Purchases of energy beverages were up more than 17% at dollar stores, nearly 11% at mass merchandisers and about 6% at club retailers for the 52 weeks ended Jan. 25, 2025, he said. Meanwhile, purchases at convenience stores were down 4.4% during that period, NIQ data show.

However, the latter wasn’t the case for Monster brand energy beverages, according to the company's fourth-quarter earnings call. Rodney Sacks, board chair and co-chief executive officer of Corona, Calif.-based Monster Beverage Corp., said company management was seeing “a resurgence of growth in the energy drink category in convenience … .”

Monster, one of the top two energy beverage brands along with Red Bull, reported Q4 energy drink sales of $1.67 billion, which was up from $1.60 billion, or 4.5%, from the year-ago period. Monster’s full-year 2024 net sales jumped 4.9% to $7.49 billion from $7.14 billion in 2023.

Red Bull, a privately held company based in Austria, had net 2024 sales of $11.7 billion, for a 6.4% increase over the year-ago period, according to Bloomberg.

Increasing M&A activity

Given their popularity, energy beverages are proliferating on shelves and online, and consumer packaged goods companies are snapping up growing brands at some relatively high valuations.

Recent examples include Celsius Holdings, which is acquiring Alani Nutrition and its Alani Nu brand for about $1.8 billion, and Keurig Dr Pepper, which is taking an initial 60% stake in Ghost Beverages for approximately $990 million. Previously, PepsiCo paid $550 million for 8.5% of Celsius Holdings, and Keurig Dr Pepper bought about 30% of C4 Energy’s parent company Nutrabolt for $863 million.

Bolstering top and bottom lines is likely a major incentive for these acquisitions, but there are other reasons for getting into the energy beverage sector or increasing an existing ownership share. Filling a portfolio void and bringing in new business could also play a part, said Costagli, along with other factors.

“In some cases, it’s the technology, the capability, so sometimes the company being acquired has the ability to produce something that the company that’s doing the acquiring will have access to (patents, for example),” he said. “You might be acquiring a distribution network with the US but might also be opening the potential for global distribution.”

Projecting future growth

Growth projections are encouraging for the energy beverage sector. Mintel expects continued growth in the market, although the London-based market researcher said energy drink brands still need to innovate and evolve to meet consumer demands despite past successes.

Innova Market Insights’ analysis of trends in the sector said energy drinks with active health claims experienced a 3% compound annual growth rate (CAGR) from 2020-2024. The Netherlands-based market intelligence and analysis company noted that increased launches highlighted functional ingredients, such as electrolytes, vitamins, minerals and protein.

Innova’s research found the energy drinks industry accounts for an average 7% of launches in the carbonated soft drinks category in the United States and Canada, with the United States leading with a gradual increase in launches from 2020-2024. US seasonal and limited-edition products grew at a 12% CAGR during that period, Innova said.

Recent Circana data project beverages centered on energy and hydration will go up in the next few years, Lyons Wyatt said. Water, coffee and vegetable drinks, respectively, are the top three most popular beverages, she said, while energy drinks are further down the list.

Red Bull had net sales of $11.7 billion in 2024, according to Bloomberg.

| Photo: ©BANU SEVIM – STOCK.ADOBE.COM

“What that says to me is, if you’re an energy beverage company, you should message to consumers to try these later in the day, afternoon, evening, parties, late night, whatever,” she said, adding, “Occasion-based marketing could also fuel innovation.”

Adding unique flavors to energy beverages and featuring them on social platforms such as TikTok Shop can also win market share, Costagli said. It could be easier than winning a spot for a product on a big retailer’s shelf, especially if a manufacturer is working with an influencer.

“That’s the push,” he said. “The pull is where someone does something interesting with the product and shares it on a platform. That certainly has become an avenue.”

When it comes to price increases, the energy beverage category has been resilient, Lyons Wyatt said.

“In the data, there is average price per unit, which is $3.38,” she said. “You can’t get a specialty cup of coffee for that.”