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Few categories continue to grow as quickly, and as profitably, as energy drinks and isotonics. Eighty-five decision makers representing 12,750 stores reported $486 million was earned by this lucrative beverage category.
Isotonics, which have been performing well in c-stores long before energy drinks were developed, remain strong. PepsiCo’s Gatorade, which continues to introduce new flavors and products, such as its G2 low-calorie line, maintained its powerhouse standing by holding onto the top spot among retailers for sales presentations remembered (71%) over Coca-Cola’s Powerade (69%). Powerade bolstered its position with the introduction of a number of new flavors in 2007 including Artic shatter, black cherry, jagged ice and mountain blast.
Red Bull held its spot in the constantly expanding energy drink category with 65% of retailers reporting a strong sales presentation in the past 60 days followed by Hansen’s Monster Beverage (46%) and Kronik Energy (8%).
One key trend worth watching in this category is a potentially growing trend of convenience retailers developing their own brands. Last year, Circle K convenience stores, operated by Convenience Store Decisions’ 2007 Convenience Store Chain of the Year, launched GaZzu, an energy drink line that it developed, refined and now sells at hundreds of stores across its 2,100-store network.
"To successfully enter the fast growing energy drink segment, we realized that GazZu had to have a unique approach, different from the typical macho look, feel and taste. We wanted broad appeal," said Russ Kidd, senior category manager of packaged beverages for Circle K Southeast.
An important component of any product’s marketplace performance is how consumers feel about it. Kidd points out that consumers are looking for beverages that will satisfy a specific "need state" and that manufacturers need to focus on what that need state is and the kinds of consumers who experience it.
The energy drink line is available in three flavors: citrus, cherry and orange-mango. GazZu is priced competitively with other front line energy drinks nationwide, Kidd said. Additional flavors are already under consideration, including a low-carb version.
When Circle K developed GazZu in conjunction with BooKoo Energy, it avoided giving it a macho name similar to Red Bull because it wanted the drink to appeal to older adults, especially women, Kidd said.
Packaging also played an important role in the new drink product’s development. The GazZu logo and design combines a high-tech look with a retro feel to appeal to hip energy drink consumers, both male and female.
When asked why Circle K wanted to develop an energy drink at all when so many were already in the market, Kidd urged companies need to respond to consumer demand with products that fill a need. Plus, energy drinks are the fastest growing segment of the drink market, growing at 70% over the past five to six years. "We just didn’t think there were any really good energy drinks in the market," he said.
The process of bringing GazZu to market took just 15 months from start to finish. Sampling, Kidd noted, is the primary marketing key to any energy drink success. "We committed 10% of the GazZu marketing budget for sampling at local Saturday afternoon college games and we sponsored a Friday evening high school football TV program in Augusta, Ga.," he said. Circle K also ran a "buy one, get one free" promotion through the end of last year and supported the new product in-store with displays, storefront banners and primary positioning in energy drink doors.