If ever there was a product category tailor-made for forecourts it would have to be energy drinks and their little brothers, energy shots. Energy drinks sell by the cartload from the chiller while energy shots are ideal, merchandised by the till area.
Today there are loads of energy drinks and shots available offering consumers variations on a theme that extra buzz when they’re feeling jaded. Many new brands have flooded the market, but beverage industry research company Canadean believes there is still room for market growth. Indeed it reckons the energy drinks category increased by over 5% in 2010 driven by overall interest in the category as well as full-year volumes for some of the newer brands and the shot segment.
Canadean says that while growth rates have slowed down, it is worth remembering that the category’s volume was just over 150m litres 10 years ago, but has now broken the 400m litres mark. And per capita consumption of energy drinks in the UK has grown from 4.35 litres per head in 2005 to an estimated 7.18 litres in 2010.
Meanwhile, Mintel reckons that by 2014, value sales of sports and energy drinks will have reached £1.5bn, while volume sales will have reached 757 million litres.
With brand names like Red Bull, Rockstar and No Fear, energy drinks have so far typically appealed to young men. However Mintel has identified the 27 million UK workers as a golden opportunity for sales growth, particularly given the long-hours culture of the UK workplace. There is also an opportunity to appeal more to women as well as 35-54-year-olds.
The research company says: "These ’middle agers’ are often juggling the pressures of work, family and relationships, and sports/energy drinks can be positioned as facilitating these busy lifestyles. The government is keen to get the population exercising more and sports/energy drinks can play a leading role in encouraging the over-35s to do so."
But Red Bull trade communications manager, Tom Smith, reckons consumers already having a better understanding of the role that sports and energy products can play in their busy lifestyles.
"Whether that’s at the workplace or on the road, in the gym or on the go, people across the country are having to balance their lives and are looking to functional products to help achieve this.
"The success of the category has a number of contributing factors but over the past year, it’s the functional side of the category that is driving growth and adding value.
"The category can be defined by three sectors: sport such as Lucozade Sport; refreshment such as Lucozade; and functional such as Red Bull. Whereas sport continues to be in decline (down 2.2%, according to the last 52-week basket analysis from two national retailers to July 25, 2010 and August 4, 2010 respectively) and refreshment in growth (up 9.9%), functional is up a massive 19.1%, meaning it has a higher proportion of value and is by far the most profitable sector.
"When you look at the make-up of the sports and energy category you can see where the growth and added value is coming from. With sport in decline, it’s refreshment and even more so functional that are proving to be the winners for both shoppers and retailers. The evidence for this is in any set of sales figures, but the story behind it shows shoppers are realising when and where to consume these products, in order to get the most from their day."
Size is everything
Red Bull’s Smith says that when you look at where the value is being delivered in energy drinks, it’s coming from size extensions rather than flavour extensions. He says size extensions deliver 2.5% (Nielsen MAT August 7, 2010) more value to the category as consumers are becoming better educated on how to manage their energy.
"Think of the coffee market. This has become an area where consumers decide on the size and type of their purchase based upon their required energy, and as sports and energy shoppers now understand the category better, they’re doing the same from energy shots all the way to big cans."
With Red Bull maintaining its position as the number one functional energy drink on the market (Nielsen data), it also has four SKUs in the top 15 sports and energy drinks by cash rate of sale. Number one is the classic 250ml; number four is Red Bull 355ml; number seven is Red Bull 473ml; and number 12 is Red Bull Sugarfree (Nielsen impulse data).
"What’s interesting," says Smith, "is that all these different products appeal to different shoppers. For example, Red Bull 250ml shoppers tend to be on-the-go ’snackers’ or ’lunchers’ whereas with 355ml consumers, there’s a move into more premium lunches with products such as wraps and bottled water in their baskets. The 473ml size is popular with shoppers who like large portions such as big-eat crisps and triple sandwiches, and Red Bull Sugarfree appeals to the health-conscious snacker."
He continues: "Despite the fact that 163 sports and energy SKUs registered sales in the past year, 72% of value sales came from the top 15. On too many occasions, chillers are stocked with duplication products that don’t add value. These take up valuable space which could be used for the best-selling lines; the ones that are driving growth which in turn means more profit opportunities for retailers."
Smith says that in impulse outlets like forecourts, shoppers will consume their purchase within 15 minutes, so chilled availability is crucial: "It’s so important to have a fully-stocked chiller at all times," he says. "A large proportion of shoppers might choose an alternative if their planned purchase wasn’t available but think about the impact this has if they down-trade from a sports and energy product to a standard soft drink. Retailers could be losing out by as much as 48% per sale (Nielsen). Even more concerning is that 5% would not buy a soft drink at all and 5% would not buy anything (ESA study), which is a completely lost shopper. We suggest keeping at least 3.5 days of stock on shelf to reduce out-of-stocks, cater to key times of the day and minimise replenishment time for retailers."
Meanwhile, the energy shots sub-category continues to grow. Red Bull is the number one brand. Smith says this is driven by the fact that consumers associate the market leader with delivering energy when they need it most.
Smith continues: "Much of this awareness has been delivered off the back of a massive football campaign last November which saw energy shot messaging mixed with specific football club messaging, for every Premier League club. This appeared in and around football grounds and in fanzines as well as national print media, helping to drive messaging of the product benefits of Red Bull energy shots." But Red Bull is not just linked to football. Following the success of the double Formula 1 Championship win of Red Bull Racing, a limited-edition 473ml Champions Can was launched. It features images of both Red Bull Racing drivers Sebastian Vettel and Mark Webber.
Gavin Lissimore, Red Bull strategy and planning manager, says: "This is a really exciting piece of activity for Red Bull and the sports and energy category as a whole. It’s the first time in the UK we’ve ever changed the can design."
Moving on, and according to Nielsen data (total coverage MAT w/e 17/07/10), Coca-Cola Enterprise’s (CCE’s) energy portfolio accounts for 30% of total energy growth in the UK. Its range includes Relentless and Monster, and the company says its success comes from offering consumers more choice when it comes to size, flavour and "brand personality".
CCE has been distributing Monster in the UK since January 2009 and the brand has become the number two 500ml canned energy drink (Nielsen MAT total coverage to week ending December 4, 2010), worth £32.7m in retail sales. Last year the brand introduced Monster energy shots in a 90ml pack size.
Meanwhile, CCE is extending its Relentless portfolio with the launch of a new variant, Libertus. The introduction of this sugar-free drink coincides with the unveiling of a new look for the rest of the range.
According to Nielsen data, the diet energy drinks sub-sector does well in the US, where sales are up 17% versus last year. CCE reckons that with over 30% of all energy drink shoppers in the UK also purchasing diet soft drinks, there is a big opportunity for this sub-sector here. Libertus contains just 20 calories per 500ml can, but CCE says it has "the same great flavour and the same amount of caffeine, taurine and B6 and B12 vitamins as Relentless origin".
The new-look Relentless range has an eye-catching insignia on one side of the pack and the original Relentless logo on the other, which means retailers can create alternate displays with either a facing of the Relentless insignia or the original logo. Flavour descriptors also feature prominently on the front of the cans. In addition, two of the current variants have been given a new name. The existing origin and inferno flavours will be joined by Immortus and Devotion, which were previously called juiced tropical and juiced berry respectively.
Stuart Agates, head of energy at CCE, comments: "Ninety per cent of Relentless shoppers want diet drinks on the go (Kantar Worldpanel data), so the launch of Libertus is a great addition to the brand portfolio. It will increase shoppers’ choice in diet stimulation and offer new usage occasions, adding additional value to the sector."
Nielsen data shows that Relentless is performing extremely well and is now worth £52.2m. It positions Relentless origin as the best-selling 500ml energy drink in Great Britain.
"Relentless is an exciting, innovative brand and the new insignia and eye-catching pack design across the range will create strong in-store presence for shoppers," says Agates.
"Our multi-million pound marketing campaign in 2011 will continue its association with music, action sports and motor sports, including headline sponsorships of major festivals."
Darren Goldney, wholesale trading director at CCE, says energy is still the fastest-growing sector overall within impulse. It therefore remains a key opportunity for retailers as busy shoppers continue to be driven by the functionality and convenience energy drinks provide.
"The sports drinks sector is another strong trend and with 9.8million 18-40-year-old adults now participating in sport in Great Britain, we expect this to continue into 2011. In fact, there are 1.8bn active sporting occasions among Powerade’s core audience each year. We’ve invested in the sector with the recent launch of Powerade Zero, which we believe represents a huge opportunity to drive sales for retailers in the sports and energy sector."
Powerade Zero is completely sugar and calorie free. It comes in two flavours: berry & tropical and red fruits. It contains minerals and sodium, which are meant to help hydrate the body more effectively than standard sports drinks.
Meanwhile, Lucozade Energy has a new blackcurrant variety backed by a £1m marketing investment.
Lucozade Energy brand manager, Andy Mahoney, says the launch continues the brand’s "excellent track record of successful NPD that drives incremental growth". In 2006, according to Nielsen data, the launch of Lucozade Energy apple added £1.2m in incremental sales.
Moving on, and Lucozade Sport retains strong links with top-flight football. The drink has been a partner of the Premier League since its inception in 1992. The brand is also the chosen drink for the Arsenal, Chelsea and Liverpool teams. The link means the clubs benefit from expert sports science support and access to the full range of 26 products for every training session and match day.
The Lucozade Sport range was recently boosted with the launch of a Lite variant.
Sales strategy and category marketing director, Colin Seymour, explains: "An awful lot of people go to the gym to exercise and participate in social sport and they may reject sports drinks based on calorie content. They want to rehydrate and replace energy lost through exercising without replacing the calories they have lost through the exercise."
Lucozade Sport Lite comes in lemon & lime and summer berries flavours. Each 500ml bottle contains just 50 calories.
The energy shots category is still a new one in the UK. These tiny little pots of instant energy are ideal for drivers as there’s less fluid intake than from a can of energy drink.
However there are still barriers to purchase in particular from consumers who don’t really understand them.
GlaxoSmithKline (GSK) is the company behind the Lucozade Alert energy shot. GSK’s category manager, Craig Percival, says: "A flood of shots launched last year, which could have been confusing for consumers. However, we believe that if we help them understand what shots are for and help retailers with things like till point units, in the end there will be a few key brands that consumers will seek out." GSK reckons that by merchandising shots at priority in-store hot spots, retailers can capitalise on impulse purchasing opportunities and drive further category growth. Those hot spots are: the till point, confectionery aisles and at magazine displays.
Since its launch in 2009, Lucozade Alert Plus has achieved a 38% share of the energy shots market and helped establish and grow the category to be worth £10m. GSK says Lucozade Alert Plus continues to drive category sales. In the 12 weeks to August 7, 2010, the brand grew by 4.9% (Nielsen).
Lucozade Alert Plus orange comes in 60ml bottles in shelf-ready packaging. Recommended retail price is £1.49. GSK says the shot, which contains energy-releasing B vitamins and caffeine, no added sugar and has only two calories, can help mental performance, focus, concentration and alertness.
Another energy shot is Viva Beverages’ Quick Energy, which is said to deliver a "healthy energy boost, ideal for tired drivers". Its effects can be felt in just minutes, and last for up to six hours.
Quick Energy contains no sugar, which Viva Beverages says means it will not give consumers the ’wired then tired’ effect caused by sugar-loaded energy shots and drinks. Instead it contains a blend of B vitamins and amino acids which give consumers the benefit of increased concentration with no subsequent ’crash’.
The shots contain just five calories per 59ml bottle and have a recommended retail price of £1.99. There are three varieties: orange, lime and fruit punch.
"Quick Energy is the ideal supplement for drivers, as it helps maintain vital concentration levels essential for their safety and comfort," says Malcolm McDermott, Quick Energy’s marketing manager. "Consumers today are well aware of the importance of constant alertness on the road, so by positioning Quick Energy as a simple and healthy solution to driving fatigue, retailers can benefit from incremental sales."
According to Britvic, more people opting for more healthy lifestyles coupled with the mass exposure of big sporting events, such as the World Cup and the Olympics, mean that sports drinks continue to be extremely relevant to consumers.
However, the company reckons non-exercisers shouldn’t be forgotten as many opt for sports drinks like Gatorade for their "drinkability factor". Gatorade’s still flavour variants are said to be not only thirst quenching but they replenish any lost fluids and minerals, resulting in an energy boost.
But Britvic has invested heavily in Gatorade to ensure the brand is synonymous with sport and demonstrates to consumers how it is formulated to give back all the vitamins and minerals lost during exercise to enhance performance. In 2010 the Gatorade campaign included the use of brand ambassadors such as sprinter Usain Bolt, swimmer Joanne Grew and the British Cycling Team as well as the launch of Gatorade Gives Back, a year-long promotion giving away £1m-worth of sports prizes.
But Britvic does not just have Gatorade. Last year, with PepsiCo UK, it launched Mountain Dew Energy in the UK. The £1bn global brand is available here in a 500ml PET citrus-flavoured variant. It appeals in particular to young men because of its "youthful personality and vibrant design". Its citrus flavour and light carbonation aim to make the product enjoyable to drink, while its mix of stimulant (caffeine) and glucose (sucrose) energy keep consumers both mentally alert and physically fuelled.
Simon Gray, managing director at Boost Drinks, reports that the Boost Energy range is continuing to perform extremely well. "Consumer demand for value is continuing and price-marked packs provide a good revenue opportunity that is still popular."
Boost is currently introducing a new packaging design across its entire range. The new look has been designed to appeal to Boost’s core target market of young adults, students and young professionals with energetic lifestyles.
It has already been launched across Boost’s sport and active range and will roll out across the entire Boost portfolio including energy cola, sugar free and original Boost Energy from this month onwards, in both plain and price-marked packs. Gray says: "We are confident that the new packaging will command greater presence on the shelf and in the chiller cabinet."
The aforementioned energy cola is Boost’s latest launch. Developed to sit in the energy aisle, it is a carbonated cola-flavoured energy drink with the same taurine and 30mg per 100ml of caffeine as the original Boost energy drink. Energy cola is available in 250ml can, 500ml and the 1ltr PET formats.
While Boost is a value-for-money energy drink, Pussy is described as "the UK’s first truly premium energy drink". It is made with a blend of fresh white grape juice from Southern Italy, pressed Mexican limes and lightly carbonated water. These are then mixed with grenadilla and lychee flavours, infused with six selected botanical herbs.
milk thistle, a Mediterranean thistle which helps improve liver function. It has been used as a hangover remedy.
guarana. This has been used by indigenous Amazonian Indians for physical endurance, memory retention and bowel complaints. More recently (since 1958) the caffeine content’s been used as a stimulant and appetite suppressant.
Siberian ginseng has antioxidant properties and is recommended for high blood pressure and insomnia. It’s also been used as a gentle tonic herb (to boost the immune system).
sarsaparilla, traditionally used for psoriasis and other skin diseases. It’s known to increase physical strength and also helps to cleanse the blood.
schizandra is one of the main herbs used in Chinese medicine. It is used to improve memory and combat depression. Schizandra is also known to help protect the liver.
gingko biloba according to studies this improves the attention span and protects against oxidative cell damage. Known as ’the brain herb’ it is used to enhance memory and concentration.
Aimia Foods says its No Fear Extreme Energy is now the fastest-growing, large-format can in the UK energy market. According to AC Nielsen data, in the 12 weeks ending September 4, 2010, sales grew by a massive 524%.
Image seems to be everything when it comes to energy drinks, so this drink is helped by its link to the multi-million pound extreme lifestyle brand, No Fear. But it also made history last year when it was launched in the UK’s first-ever re-sealable can.
This has a ’twist and shut’ device designed to stop spills and keep the contents fizzy for 24 hours. Drinkers simply twist the plastic tab to break the seal and open the can. Then it can be twisted back to its original closed position to be drunk again later.
Aimia says this feature differentiates No Fear Extreme Energy from competitors and adds appeal to its active, ’on the go’ audience.
It comes in a cool matt black finish can, which sports the No Fear logo.
With a recommended retail price of just £1.39, it is easily affordable. The new drink has been a big hit with 16 to 24-year-old brand-conscious men.
For retailers, Aimia says No Fear Extreme Energy ’delivers the best profit on return in large format can’.
It comes in packs of 24 which can be sold either as single cans or four x six multipacks.
The product is supported by an extensive national marketing campaign. Social media via www.drinknofear.co.uk is playing a pivotal role, plus the brand has "an exciting events calendar". There is a £1m investment behind the brand that includes TV sponsorship of Sky TV’s Extreme Sports channel, national advertising, media and store promotions, national events and PR stunts.
Meanwhile, Rockstar has been performing particularly well. According to Nielsen Scantrack data, sales rose by 63% last year and over 30 million cans have been sold to date.
Nielsen stats also position Rockstar cola as the fastest growing 500ml energy drink in the UK.
Rockstar is available in five varieties in 500ml cans: original, guava punched, juiced, cola, plus the recently-launched Recovery. One litre share-size PET packs are also available.
Brand owner AG Barr says Recovery, is the UK’s first non-carbonated energy drink. It is formulated with all of Rockstar’s usual energy-giving ingredients as well as electrolytes. It comes in a still lemonade flavour making it ideal for re-hydration and thirst replenishment.
Rockstar is associated with motor and bike racing. Last year it sponsored the Swan Honda team during the 2010 British Super Bikes (BSB) Championship season. And in January, Rockstar’s international racing driver and host of Top Gear USA, Tanner Foust, unveiled his new Rockstar Ford Fiesta at the Autosport International Show. He will be competing in the first round of the European Rallycross Championships in April.
Extra Kick Energy drinks
A war is raging against alcoholic energy drinks in the US, with many states wanting to ban them. The fruit-flavoured drinks have been described as ’blackout in a can’.
Some of the cans contain as much as 12% alcohol plus a stimulant, which is typically caffeine.
US politicians are saying these drinks are dangerous because the alcohol content could put drivers ’over the limit’ but the inclusion of a stimulant means many consumers feel sober enough to drive.
Playboy hits the market
Look out for the new Playboy Energy Drink, which was first launched in the US in 2007.
It is currently available in almost 20 other countries including Australia, New Zealand, South Africa and across Eastern Europe. The drink was launched in the UK at London’s Funky Buddha nightclub late last year by the Playboy Energy Drink UK ambassador Kelly Brook.
It is described as having "subtle notes of fruit and vanilla", and contains ginseng root, guarana extract and damiana leaf all ingredients that are believed to stimulate energy levels. It is available in two varieties: regular and sugar free; in 250ml black cans featuring the distinctive Playboy bunny design. Initially the drink is available in clubs and cocktail bars which are said to be "in keeping with the beverage’s premium positioning and the Playboy-lifestyle proposition".
Potions with notions
All Day Energy the company behind the iShot is launching two new Potions 4 Life. Managing Director, Kursat Uysal, says the iShot was scientifically developed to support people with busy and active lifestyles. It comes in a 60ml bottle. Uysal says it’s popular with both men and women from builders to busy mothers. Also available is a decaff acai berry energy potion for people who are sensitive to caffeine. Uysal says it’s the only energy shot on the market that contains zero caffeine.
The first new Potions 4 Life is the iShot Skinny aka Slim Potion which combines potent botanical stimulants with appetite suppressants and fat-burning ingredients. It has been designed to give consumers an energy boost, anti-oxidants and also elevate their mood. Ingredients include acai berries, green tea, chromium, bitter orange peel, energy-releasing B vitamins and guarana.
Then there’s iShot All Night aka Love Potion. Uysal says this has been scientifically developed with a potent combination of functional herbal extracts known for their reputed aphrodisiac properties together with the iShot energy blend. Ingredients include damiana, Korean ginseng, guarana, green tea, B vitamins, amino acids and anti-oxidants.