Americans aren’t about to slow down, so expect sales of energy drinks to continue to speed up.
“The energy drink category has continued on a solid growth path,” according to Gary Hemphill, managing director of research for Beverage Marketing Corp. (BMC) in New York City. “It is dominated by the category stalwarts Red Bull and Monster. The c-store channel is the star sales channel for energy drinks; it’s a category that’s been built on immediate-consumption sales, which is the strength of convenience stores.”
Hemphill added that he has seen a good deal of innovation in the category, with brands like Bang gaining positive traction.
“Soft drinks are often consumed as an accompaniment to food, and therefore many categories depend on the prominence and strong performance of foodservice destinations and consumption locations,” said Jonathan Davison, consumer analyst for integrated research firm GlobalData. “This is not the case with energy drinks, and the category owes much of its sustained growth in the U.S. to rapid gains in the convenience channel, as consumers continue to seek energy boosts.”
The convenience channel’s share of energy drinks has fractionally dipped in the last five years as the likes of discount stores and supermarkets expand their category footprint, Davis continued. “The overwhelming array of brand variants on offer particularly favor supermarkets given the much larger shelf space available, but convenience stores can claw back the advantage by targeting specific on-trend beverages that tap into current demand.”
Davison said customers today are shifting to brands that offer more functional, organic and natural ingredients. As is the case with specialty beer, new flavor variants are emerging in energy drinks, reflecting a demand for new tastes and experiences.
Another growing phenomenon is energy drinks made from hemp oil or seeds. Brands like Canna Hemp Energy Drink, Cannabis Energy Drink, Rocky Mountain High Natural Hemp-Infused Energy Drinks, Hemp Energy Drink and others are promising not just energy, but colon cleansing and reduced cravings for sugar.
“We continue to see the two big energy brands on the East Coast continue to grow,” said Mike Jackson, category manager for High’s of Baltimore. “Innovation seems to be the key for these leaders to continue to grow year after year. Some of the older brands are starting to decline in sales, and there are always new brands trying to break into energy all the time.”
High’s had a more than 12% same-store-growth rate in unit sales of energy drinks in 2018.
“The two big players, Monster and Red Bull, both showed impressive growth in both unit and dollar sales,” Jackson said.
The lines between energy and coffee, as well as energy and water, are also becoming blurred, Jackson suggested. New brands and extensions of existing brands are producing new products all the time trying to offer more attributes to a customer in a single product.