It seems that Red Bull really does have wings. Last year, the brand grew at a rate of 5.7%, while the sports and energy category remained flat at 0.4% (IRI data), but even that latter figure was ahead of the total soft drinks category. And growth in the forecourt sector was better. According to IRI, sales of sports and energy drinks were up 2% in forecourts last year and Red Bull’s sales through this sector were up 5.8%.
However Rich Fisher, category development manager at Red Bull UK, believes there is still more growth to be had. He says that following months of in-depth market analysis, Red Bull has identified up to an additional £605m sales opportunity over the next three-to-five years. He reckons this incremental growth for the whole category can be achieved by focusing on a number of key consumer drivers.
"These drivers include promoting the use of positive energy by linking energy occasions to energy drinks, including studying, driving or working; occasions where the consumption of energy products offers consumers a range of positive benefits."
Another driver is education, especially about the benefits of energy and overcoming any health concerns about energy products. Red Bull began 2016 by taking the bull by the horns, so to speak, and launching the ’One Can and You Can’ campaign with the message that one can of Red Bull can give you the energy and motivation to get moving. The aim was to position the brand as the difference between a night on the sofa and a night at the gym. The campaign used the brand’s athletes and fans to educate consumers on how Red Bull can vitalise your body and mind.
Following on from that, Red Bull is backing the growing big cans segment, with a new £1.49 priced-mark can of its number three best seller, the 355ml size down from £1.59. "With shoppers preferring priced-mark packs (PMPs) in convenience, this new price aims to maintain the premium position of the brand, while delivering an increased rate of sale and fuelling additional category growth," says Fisher.
Fisher describes big cans as a standout growth driver: "Big cans are growing at 10%, outperforming total energy and soft drinks, and reaching £320m in value the largest segment within functional energy, at 46% (IRI data)."
He says that although Red Bull was later to the market with its big cans, the brand is growing faster than leading original big can skus, delivering incremental sales to the category and delivering a higher rate of sale than other leading soft drinks categories, such as colas, water and refreshment energy.
Size is one of the leading drivers of Red Bull’s growth, with bigger cans up by 19.47% in value and 22.73% in volume (IRI).
Meanwhile, AG Barr’s big cans are even bigger, coming in at a thirst-quenching 500ml. The company says that in the 500ml big can format, flavours are fuelling market growth at 13% by value (IRI). Two of the top five flavoured big cans are Rockstar Xdurance (number one) and Punched Guava (number two) and these are must-stock products for all forecourt retailers nationally. Adrian Troy, head of marketing for AG Barr, says Rockstar’s key strength lies in its wide range of flavours and innovative NPD, illustrated by the success of its Rockstar SuperSours range which has already delivered £9m of sales, according to AG Barr’s estimates.
Meanwhile, Boost Drinks has launched its popular Exotic Fruits line in a 1ltr PET bottle. The company sees investment in new product development as a key part of its ’Champion Of The Independents’ commitment, providing great-tasting, competitively-priced products that are not available in the grocery multiples.
The new 1ltr Exotic Fruits is available in cases of 12 and will initially be on promotion price-marked at £1, moving to a £1.29 PMP from May. Boost will be supporting the launch with a social media campaign and customer-specific support. Boost sales director, Al Gunn, says: "Flavours make up 13% of the functional energy sector, and they are growing. Exotic Fruits, which is now established as our most popular variation, in a 1ltr bottle offers a great sales opportunity around summer barbecues and adds to the mixer portfolio too.
"We believe it is suitable for a chilled or ambient fixture and, with its high-impact pack design, will attract new drinkers to the category as well as providing regular consumers with a new option."
This latest product launch comes on the back of figures showing that Boost has been in consistent growth for the past three years, continues to grow ahead of the category, and is the UK’s number two stimulation energy brand in symbols and independents (UK and NI IRI data.
But retailers should not overlook the ’originals’ as, according to IRI, 59% of energy sales come from the ’original’ variety, which is why AG Barr is investing in its Rockstar Original with a new pack redesign and an even better taste.
"The eye-catching packaging draws consumers’ attention to the energy fixture and references that Rockstar Original has a new, superior taste which will drive trial," says Troy.
He adds that the reformulated Rockstar product out-performed competitor Original flavoured products in independent taste tests with more shoppers saying they would buy it. "We are confident therefore that our new product will create interest in this sector and drive forecourt sales."
Making a mark
According to IRI data, PMPs currently make up 51% of total impulse energy sales and drove 25% of forecourt energy growth in 2015.
"Comparing PMPs and non-PMPs, the PMPs are growing considerably faster than the plain packs, indicating that this format is preferred by the consumer," says Gunn.
"PMPs make absolute sense for independent retailers as long as the retail price point is competitive and the retailer margin is maintained. They can enable independents to compete effectively by offering a price point in line with retail multiples, demonstrate value for money and make a reasonable margin. At Boost, we work hard to deliver a compelling product, competitively priced, that still offers a strong cash margin. Where this is achieved, PMPs are absolutely right for our channel."
Boost’s Citrus Zing and Exotic Fruits flavours come in 250ml 49p PMP cans and 500ml 79p PMP PET bottles, while Exotic Fruits is also available in the new aforementioned 1ltr PET bottle. Sugar Free Pink Lemonade and Cherry Burst are available in 250ml 49p PMP cans. Original and Sugar Free Boost are available in plain or 49p PMP 250ml cans, plain or 79p PMP 500ml PET bottles, and 1ltr PET bottles with a standard price of £1.29. There is also a 500ml energy PMP can.
And all of Rockstar’s popular big can flavours are available in 99p PMPs throughout the year, offering a clear profit opportunity for forecourt retailers.
Fisher reports that the Red Bull price-marked range has seen positive market growth, with the 355ml can up 41% year-to-date versus last year (IRI data). "Price-marked packs continue to play a strong role in convenience outlets by delivering a greater perception of value to consumers with 76% of shoppers saying PMPs help a convenience store’s price image. Red Bull offers PMP and non-PMP formats across its range, delivering the choice to retailers and shoppers."
Donna Pisani, trade communications manager at Coca-Cola Enterprises (CCE), says PMPs can be particularly impactful for retailers wanting to encourage trials of a new product. "Almost half (43%) of shoppers claim that they’d be more likely to try a new line if it was sold in a PMP (Him). Therefore, as new energy drinks products hit the market, PMP versions can help to increase sales.
"We have focused on providing a choice of PMPs within our own energy ranges, including 99p 500ml cans of Relentless, and £1.19 cans of our new Monster Energy variant, Ultra White, enabling retailers to offer a product range that meets their customers’ needs."
Another trend for forecourt retailers to be aware of is the growing importance of low-sugar energy options. AG Barr has tapped into this demand with Rockstar Pure Zero, a flavoured zero sugar big can energy drink. It has been available in a 500ml big can format in Fruit Punch flavour for a while but that has just been joined by Punched Guava flavour. "By introducing Punched Guava the best-selling flavour in the Rockstar line up to the Rockstar Pure Zero range, we are giving retailers an added opportunity to profit from this fast-growing sector," says Troy.
CCE has been focusing heavily on its low and zero calories ranges for some time. It has invested £15m in reformulation since 2012, helping to reduce the average calorie content of its sparkling drinks by 5.3%.
Pisani says: "Our focus on lower calorie drinks has seen a range of energy drinks innovations, including Monster Energy Absolutely Zero and Monster Energy Ultra, as well as Relentless Origin Ultra and Relentless Mango Ultra. With demand for zero calorie drinks higher than ever before, retailers should look at focusing on these sugar-free products."
Three new zero calorie Monster Energy variants were added to the range last autumn. "Boasting a light sparkling citrus flavour, the Ultra White variant leads the line-up, and is joined by Ultra Sunrise, which brings a citrus and orange twist with a sophisticated dry flavour. The Ultra family is completed with Ultra Red, which combines the Monster Energy blend with a drink that’s refreshing, light and crisp, all with the added benefit of having zero sugar and calories, explains Pisani."
Meanwhile, Boost invested considerable time and money developing Sugar Free Pink Lemonade, which contains just five calories per 250ml, is reported to be selling well.
Depending on the size of your store, Red Bull advises retailers to stock the most efficient range to drive the greatest value.
"With pos material available for the till point, and free-standing and various sized chillers, retailers can stock a full range to provide the consumer with a choice, to meet their specific shopper needs," says Fisher. "Making the store and category easier to shop will up-weight basket spend," he adds.
He says retailers should bear in mind that 30% of sports and energy products are purchased for on-the-go consumption, so all variants should be kept in the chiller.
Consumers shop by shape and colour and navigate the fixture by brand. As Red Bull is the number one functional energy drink, it should be used to signpost the category. Retailers are also advised to try a second siting in store, close to newspapers or confectionery, with pos material, to increase impulse purchases.
Boost’s Gunn says forecourt retailers should have the right mix of products to give consumers an appropriate choice, reflecting the local market. "There is still huge demand particularly from consumers in convenience and forecourt shops for re-sealable bottles that can be stored in the car for journeys when an extra boost of energy might be needed. While Boost’s 500ml bottle is still one of the best sellers within forecourt retail, the 250ml and 500ml cans are also a great choice for customers looking for a quick burst of energy while travelling."
Northern Ireland forecourt manager Celine Dorman is enjoying very buoyant energy drinks’ sales at her Tannaghmore Filling Station in County Antrim, with Boost Drinks responsible for over 30% of them. Boost Original in the 250ml 49p PMP can is by far the biggest seller, and Celine also stocks the Sugar Free variant and the Exotic Fruits, Citrus Zing and Sugar Free Lemonade flavours all in the same format.
She puts Boost’s successful performance down to its great taste and incredible value, commenting: "Our customers are big energy drink fans and Boost provides the ideal combination of great flavour at a very attractive price."
Forecourts grab £5,000 cash
Five forecourts were among the winners of Boost Drinks’ biggest ever trade promotion, which took place last year.
Entrants had to stock five of Boost’s energy range SKUs, display them in a chiller with branded pos material, and send in a photograph of the products.
The winning forecourt store managers were: Karen Marshall, MPK Services, Conisbrough (pictured with Boost sales development manager, Mike Carroll; Baz Patel, Park Service Station, London; James Kay, HKS Meteor, South Normanton; Dave Dixon, NJB Askern Forecourt, Doncaster; and Owain Hughes, Damory Garage, Dorset.
They all received £1,000 cash as well as £400 in marketing and advertising support. The winners used the money for a number of things from shop improvements to the sponsorship of a local netball team. Park Service Station was keen to run a bespoke promotion where consumers buying any newspaper would get a free sample of Boost’s latest Winter Spice flavour.
Sales director Al Gunn comments: "The objective of Grab A Grand was to increase awareness and drive sales.
"The challenge was totally embraced by many forecourt retailers and we have been overwhelmed by all the efforts made."
Multivitamin energy drink Purdey’s has teamed up with actor Idris Elba for its latest campaign. Called Thrive On, the campaign aims to inspire people to strive to better themselves.
Purdey’s is a blend of grape and apple juices, spring water, botanical extracts and vitamins. It contains B vitamins for a gentle lift that helps consumers feel refreshed and rejuvenated.
Britvic marketing director, Kevin McNair, says: "We are very excited to be working with Idris Elba and launching Purdey’s new campaign. As Idris embodies thriving, we considered him the ideal fit for the brand and to spearhead the new campaign which aims to inspire people to get more out of life."
The consumer-facing aspect of the campaign will launch in April, with Elba introducing the public to the concept of thriving through a series of thought-provoking short films. The campaign will be backed by an outdoor campaign and strong digital support.
Don’t forget own label
There’s no doubt that many shoppers out there are buying on price, which is when a good quality own brand comes into play. The top five energy drinks brands sold through Bestway by value are Red Bull, Monster, RockStar, Best-in and Relentless Best-in being its own-label offering. These five brands account for 88.5% of all its stimulation/energy drinks.
The cash and carry firm advises its retail customers to always have Red Bull and Best-in as their core 250ml offer across regular and low-sugar variants. In 500ml, it suggests a flavour mix of Monster, Rockstar and Relentless. And for retailers who want to offer a mid-price alternative or a good/better/best option, it suggests adding Boost.
"Where we have distribution for Best-in, it achieves fantastic rates of sale.
"For example, in sports and energy drinks a Best-in stimulation or isotonic product is sold every second of every day," says Nick Brown category manager for own-label.
The company recently embarked on a sampling campaign of Best-In Original Stimulation in Sour Cherry and Sour Apple flavours across 10 depots. "We want customers to taste the products for themselves, appreciate the quality and then stock them on their shelves," explains Brown.