Energy shot sales faced a challenging year in 2020, but c-store operators have an opportunity to grow their energy shot business in 2021 with smart promotions, merchandising and product selection, as well as larger package sizes, better pricing and even suggestive selling.
IRI figures for the total U.S. convenience store channel for calendar year 2020, ending Dec. 27, showed sales of energy shots reached nearly $579 million, but saw a 12.2% decline over the previous year. Of that number, Living Essentials LLC’s 5-hour Energy brand (also down by 12.2%) accounted for nearly $524 million, dwarfing the next-largest brand, Tweaker, which finished with sales of just over $24.5 million, a dip of 3.4%. Other high-ranking brands included VPX, Red Dawn, Vital 4U, Rip It, Stacker 2, Rhino Rush and Quick Strike. Private-label saw sales peek over the $3-million mark, representing a 36.8% drop.
According to Packaged Facts Communications Manager and Associate Marketing Analyst Daniel Granderson, energy shots remain a niche appealing primarily to a relatively small cohort of young adults. Mintel Group Ltd.’s Caleb Bryant, associate director-food & drink, noted the segment will continue to see a slump that will likely be inflated by the impact of COVID-19.
Opportunity In Larger Packages
Some convenience store operators have begun merchandising the declining segment further away from the checkout area, and in general providing it with less real estate. Others are changing up their merchandising set.
“New companies keep coming in, and they, like 5-hour Energy, are introducing new flavors,” noted Mike Askwith, chief operating officer for PBD USA Inc. in Elmhurst, Ill., which includes 25 owned and franchised locations in Illinois, Georgia and Florida. “The problem is the pricing is getting pretty much out of whack. Before, it used to be $2.99, and now you find prices at $3.29, two for $6, two for $7. So those prices are getting out of reach a ways.”
That explains why some retailers are introducing lower-priced alternative brands and offering larger economy packages in addition to individual items.
“With lower foot traffic because of the pandemic, the Exchange is seeing growth in larger packages of energy shots,” reported Amber Seibert, sports nutrition buyer for the Army & Air Force Exchange Service, which operates 479 c-stores.
The hottest sellers in 2020 were the six- and 10-packs of 5-hour Energy. The coming of the pandemic changed the equation, she noted.
“Because of COVID, Exchange shoppers have been drawn to larger packs, so stores will adapt and shift
assortment to meet these changes in
In addition to adding larger pack sizes, suggestive selling to highlight energy shot promotions can help c-stores boost sales.