WASHINGTON — With the release of the Dietary Guidelines Advisory Committee’s re-commendations, energy drinks are back in the public health spotlight. The committee said moderate coffee consumption may be incorporated into a healthy diet, but high caffeine intake, or greater than 400 mg per day for adults, may occur with the rapid consumption of large-size energy drinks.
The D.G.A.C. recommended limited or no consumption of high caffeine drinks, or other products with high amounts of caffeine, for children and adolescents. The committee said energy drinks should not be consumed with alcohol.
“When it comes to caffeine, like coffee, the committee referred to ‘high’ caffeine intake, which lacks scientific definition, and arbitrarily focused on a single category of products — energy drinks,” the American Beverage Association said in a statement. “However, other sources of caffeine, like coffee, contain the same and often times significantly higher amounts of caffeine than energy drinks, and contribute a much larger proportion of caffeine in the American diet. Thus, the committee’s approach to caffeine is inconsistent and far from scientific.”
The A.B.A. said energy drinks account for less than 10% of total caffeine intake and that the Food and Drug Administration should be the appropriate body to investigate caffeine’s safety.
Yet the D.G.A.C. is not the only group raising a warning flag over the potential negative public health consequences of consumer energy beverages. International health experts are calling on governments to take a stronger regulatory stand on the use of energy drinks in an effort to control what they say is the growing harm associated with consumption of the products.
A closer look at the evidence
The call comes following an international conference at Deakin University, Burwood, Victoria, Australia, that took place in early November that looked at the current evidence regarding the consumption, marketing and harms associated with the use of caffeinated energy drinks. The research findings presented at the conference included energy drinks being associated with cardiac arrest and sudden death, heart palpitations, digestive tract problems and increased anxiety, even in children as young as 12 years; the consumption of energy drinks with alcohol linked to greater levels of harm and their use as a way to “sober up” substantially increasing the likelihood of injuries.
It was the conclusion of those attending the 1st International Energy Drinks Conference that the current situation surrounding energy beverages is a clear case of regulatory failure and that government regulatory agencies should act in order to protect the health of those most vulnerable in the community, especially children.
“The increasing evidence of the harms associated with energy drinks can no longer be ignored,” said Peter Miller, associate professor at the university and organizer of the conference.
“It was startling to those at the conference that this apparently harmless substance was shown to be such a significant threat to adults and, more alarmingly, to children,” he said. “It is time that we see leadership from our governments to ensure that consumers of energy drinks are properly informed and that parents are given the ability to make informed decisions about children’s energy drink use.”
The conference attendees developed a statement of concern that was released on March 2 and provided recommendations for policy change. Key policy changes and recommendations made by the group included:
• Limiting the caffeine level allowable in energy drinks. Currently, the United States lists caffeine as “generally recognized as safe” at 200 mg per liter. Yet many energy drinks sold in the United States and Australia exceed the level, according to policy change statement.
• The availability of energy drinks to youths should be limited.
• Pre-mixed alcohol and energy drinks should be banned.
• Strong regulation is needed on the labeling of products to ensure consumers and parents are aware of the health concerns associated with energy drinks.
• There is a need for effective regulation of advertising and other forms of marketing.
The conference attendees concluded that the current situation surrounding energy drinks is a case of regulatory failure and government regulatory agencies should act in order to protect the health of the consumer groups most vulnerable, especially children.
Yet Monster rages on
Despite the ongoing negative publicity that has surrounded the energy beverage category for the past five years, sales of energy drinks are accelerating, said Rodney Sacks, chairman and chief executive officer of Monster Beverage Corp., which reported strong earnings growth and sales for the fourth quarter and fiscal year.
“Throughout the fourth quarter and continuing into 2015, the beverage industry in general has continued to show weakness,” Mr. Sacks said during a Feb. 26 earnings call with financial analysts. “However, sales in the energy drink category appear to have accelerated in the U.S. towards the end of 2014 and into 2015.”
For the fourth quarter ended Dec. 31, 2014, Monster had net income of $125,332,000, equal to 75c per share, up 65% from $76,105,000, or 46c per share, for the prior-year period. Factors affecting profitability include expenses related to regulatory matters and litigation concerning the safety and marketing of Monster energy drinks. Net sales increased 12% to $605,567,000 from $540,849,000.
Net income for the year increased to $483,185,000, or $2.89 per share on the common stock, up 43% from $338,661,000, or $2.03 per share, the year before. Net sales advanced to $2,464,867,000, up 9.7% from $2,246,428,000 for fiscal 2013.
“U.S. Nielsen market statistics show the energy category continues to grow, and that Monster Energy’s growth is still outpacing the growth of the category as a whole,” Mr. Sacks said.
In August, Monster Beverage announced a long-term strategic partnership with The Coca-Cola Co., which agreed to acquire approximately 16.7% ownership interest in Monster and transfer ownership of its non-energy business to Monster, which in turn agreed to transfer its non-energy business to Coca-Cola. Additionally, the two companies will expand distribution with Coca-Cola’s bottlers into additional territories. The transaction is expected to close in the second quarter.
“We believe this partnership will strategically align both companies for the long term by combining the strengths of The Coca-Cola Co.’s worldwide bottling system with Monster’s dedicated focus and expertise as a leading energy player globally,” Mr. Sacks said. “We believe that this distribution arrangement will accelerate Monster’s opportunity to grow internationally.”
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