The energy drink market has been on an upward growth trajectory since 2010 and with the improvement in the economy is expected to continue on this positive growth path, according to Chicago-based research firm Mintel International.
Energy drink sales were up about 16% in 2011 in convenience stores, as well as up about 16% across the four channels, according to Beverage Digest. What’s more, Mintel reported that between 2011 and 2016, energy drinks are expected to have a sales growth of 64% for the period.
“There is a lot of new product activity in energy drinks because the product category is so healthy and doing so well, but ultimately the greatest performance is coming from a handful of key brands that dominate the category and those would include Red Bull, Monster and Rockstar,” said Gary Hemphill, managing director of Beverage Marketing Corp.
“Those three tend to dominate and they’re performing the best. There has been more product activity around more healthful energy drinks and those targeted to specific demographics like women, but the greatest success and the greatest share today continue to be among the leading brands.”
At Zarco 66 Earth Friendly Fuels, which operates eight stores in Kansas, energy drinks continue to battle each other for their share of the cooler space, but Scott Zaremba, president of Zarco 66 agreed that the customers tend to gravitate toward top brands.
“We’re still seeing the staples of Monster and Red Bull. In the Midwest they are our top sellers and tend to dictate shelf space by their consumer demand,” Zaremba said. “There are a lot of new energy drinks coming onto the market, but we’re not stocking very many in our cooler sets. We’re not seeing a big jump from anybody else just yet to warrant a change in coolers sets, so we’re sticking to the higher volume brands.”
Smaller sized Zarco 66 stores offer one full door of energy drinks, while the larger stores offer 2-3 full doors of energy drinks.
Overall, all-natural energy drinks have failed to penetrate the category. “One of the main reasons is that the 18-24-year-old demographic is the primary consumer of energy drinks, and they care less than the average about the all-natural profile of any beverage. They’re drinking more for the energy boost and image,” said Mintel Senior Consumer Analyst Garima Goel Lal.
Energy drinks and vitamin-enhanced waters have been the two most demanded beverages at Zarco 66, and Zaremba noted he’s also looking into adding coconut water to his cooler case. Neither an energy drink nor a vitamin water, coconut water is considered a healthier re-energizing beverage. With Zarco’s Sandbar Subs offering and general tropical retail theme, Zaremba is optimistic that coconut water would be a good fit.
Mintel research indicated that adults ages 25-44 show the biggest consumption of coconut water. “But I would not say it’s a competition to energy drinks,” said Goel Lal. “One reason for coconut water’s popularity is it’s a natural functional beverage with a high profile as celebrities have endorsed it. American consumers are more health conscious today, so this beverage has hit a note at the right time.”
Did You Know…
• Energy drinks were up about 16% in the convenience store channel in 2011, according to Beverage Digest.
• Energy drinks are expected to see a 64% increase overall between 2011 and 2016, according to Mintel
• Sales of energy drinks are expected to see an annual increase of 11-12% through 2016, according to Mintel International.
• Sales of energy drinks and shots in 2011 totaled about $7 billion, according to Mintel International.
• In 2011 energy drinks were projected to have 15.4% market growth, according to Mintel International.