Energy Shots Still Compete

Energy shots satisfy the need that drives many customers to convenience stores in the first place: something fast and convenient to help them rocket through their busy day. However, the segment has been overshadowed for the last few years by a dynamic energy drink category.

Dollar sales of energy shots, including 5-hour Energy, Stacker 2, Tweaker, Rhino Rush and K Chill, dipped 2.3% to $770 million for the 52 weeks ending Dec. 25, 2016, according to Information Resources Inc. (IRI) Total U.S. Convenience Store All Scan data.

“Energy shots and energy drinks are marketed and positioned differently, and c-store operators should carry both,” insisted Gary Hemphill, managing director of research for Beverage Marketing Corp. “Energy shots are marketed directly and specifically as an energy source, while energy drinks are marketed as a lifestyle beverage that offers the functional benefit of energy.”

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The consumer base is also somewhat different, Hemphill continued, with drinks appealing to more youthful males and shots having a somewhat older demographic. “Savvy c-store operators should carry both. Both serve a need, and both are heavily driven by impulse purchases when the need for energy occurs.”
Of course, c-store operators will carry what sells.

“Energy shots are a big deal, and we sell a lot of them,” said Kurt Bauman, vice president of food distribution for Condon Oil Co., which operates 35 Ultimart convenience stores in Wisconsin. “We used to see energy shots being purchased solely by Millennials, but that really isn’t the case anymore. We’re seeing older consumers purchase them more and more.”

Consumers think energy shots are healthier than soda and better than drinking multiple cups of coffee, Bauman pointed out.

“You get all of the caffeine you need in a little shot and you’re good to go. And because energy shots are merchandised in-store right at the counter and promoted on discount in quantities of two, four and six, they’re really the perfect add-on to any purchase,” Bauman said.

The energy shot segment continues to diversify, which is good news for consumers who want more variety.

“In the past, it’s always been 5-hour, then the ‘temporary other’ shots,” said Mike Nelson, category manager for Plaid Pantry in Beaverton, Ore. “Now there seem to be some brands learning to co-exist with 5-hour. Also, ‘relaxation shots’ have entered the picture, and are growing at a good pace.”

For example, Rhino Rush has worked as a good complement to 5-hour for Plaid Pantry, according to Nelson. “5-hour rolled out their Protein + Energy, but it wasn’t a big hit.” Over the coming months, he continued, Plaid Pantry is looking for Protein + Energy to grow. “I think relaxation shots will breathe new life into a close-to-flat overall category.”

Nelson forecasts that 5-hour Energy should maintain its market share in 2017.