Energy Drinks and Energy Shots - US
Report description
This report explores the energy drinks and shots market. The market has recovered admirably from the throes of the recession and grew 15.4% from 2010-11, after slowing down to a growth rate of 4.8% from 2008-09. Energy drinks and shots continue to thrive for their functional positioning, particularly providing an energy boost. However, the market faces its own set of issues, the biggest one focused on the possibly harmful side effects of consuming energy drinks and shots. This report addresses these and other issues and explores growth-driving opportunities including:
This report explores the energy drinks and shots market. The market has recovered admirably from the throes of the recession and grew 15.4% from 2010-11, after slowing down to a growth rate of 4.8% from 2008-09. Energy drinks and shots continue to thrive for their functional positioning, particularly providing an energy boost. However, the market faces its own set of issues, the biggest one focused on the possibly harmful side effects of consuming energy drinks and shots. This report addresses these and other issues and explores growth-driving opportunities including:
The steps energy drinks and energy shots makers can take to alleviate the concern about product safety
The importance of packaging size and flavor variety in attracting consumers
Key brands’ performance in each segment and leading brands’ marketing strategy
Impact of the growth in energy shots on energy drinks’ sales
Innovative product positioning and attributes that best attract increasingly health-conscious consumers
Reasons nonusers do not drink energy drinks and shots, and steps marketers can take to attract nonusers to the market
Table of contents
Scope and ThemesWhat you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Executive Summary
Market thrives as Americans’ need for energy boost remains strong
Energy shots exhibit stellar performance
Energy drinks growth pace slows, but still impressive
Monster shows signs of catching up with Red Bull
Convenience store continues to be the biggest channel
Adult consumer base expands, but only due to positive population growth
Teen consumer base shrinks
Energy boost remains the top attribute for consumers
Size matters, but the biggest is not necessarily the best
Most nonusers do not find a need to drink energy drinks and shots
Insights and Opportunities
Caffeine—a sales-boosting ingredient or image-destroying element?
List the caffeine content on the packaging
Stay away from misrepresenting the caffeine content to consumers
Going without the caffeine
Battle for the next big extreme sport
Inspire Trends
Inspire Trend: “Prove It”
Market Size and Forecast
Key points
Consumers’ insatiable need for energy boost contributes to the growth
Figure 1: FDMx and convenience store sales and forecast of energy drinks and shots, at current prices, 2006-16
Figure 2: FDMx and convenience store sales and forecast of energy drinks and shots, at inflation-adjusted prices, 2006-16
Fan chart forecast
Figure 3: Fan chart forecast of FDMx and convenience store sales of energy drinks and energy shots, at current prices, 2006-16
Walmart sales
Market Drivers—Health and Wellness Trends
Energy drinks and shots continue to be criticized for being unsafe
Obesity and energy drinks
Obesity rates steady, but still a cause for concern
Figure 4: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2008
Obesity rates among teens continue to rise
Figure 5: Prevalence of obesity among children and adolescents aged 2-19, 1976-2008
Energy drinks’ key consumers less sensitive to sugar, artificial ingredients
Figure 6: Incidence of dieting and preference for foods without artificial additives, July 2009-September 2010
Demographic and economic factors
Teen population offered little growth for 2006-11, better outlook during 2011-16
Figure 7: Teen population by age, 2006-16
Population trends favor energy shots more compared to energy drinks
Figure 8: U.S. population aged 18 or older, 2006-16
Hispanic population boom trends signal growth for the market
Figure 9: Population, by race and Hispanic origin, 2006-16
Key energy drinks consumers continue to grapple with unemployment
Figure 10: Unemployment status (seasonally adjusted) among civilian noninstitutional population, by age, gender, and race/Hispanic origin, July 2010-July 2011
Competitive Context
Key points
Other nonalcoholic beverages make energy boost claims
Figure 11: Number of new products with energy boost claims in nonalcoholic beverage categories other than energy drinks, January 2010-June 2011
But coffee continues to be the main competitor
Myriad energy-boosting formats continue to appear in the market
Caffeinated gum offers convenient energy boost
Supplements with caffeine/energy boost claims offer cheaper alternative to energy drinks
Segment Performance
Key points
Energy drinks lose market share to energy shots
Sales and forecast energy drinks and shots, by segment
Figure 12: FDMx and convenience store sales and forecast of energy drinks and shots, at current prices, by segment, 2006-16
Figure 13: FDMx and convenience store sales of energy drinks and shots, by segment, 2010 and 2011
Segment Performance—Energy Drinks
Key points
Energy drinks continue upward growth; future outlook bright
Sales and forecast of energy drinks
Figure 14: FDMx and convenience store sales and forecast of energy drinks, 2006-16
Segment Performance—Energy Shots
Key points
Segment posts stellar growth
Sales and forecast of energy shots
Figure 15: FDMx and convenience store sales and forecast of energy shots, 2006-16
Segment Performance—Energy Drinks Mixes
Key points
Energy drinks mixes slide; sales likely to remain small
Sales and forecast of energy drinks mixes
Figure 16: FDMx sales and forecast of energy drinks mixes, 2006-16
Retail Channels
Key points
Convenience stores account for more than 80% of total market sales
Figure 17: U.S. FDMx and convenience store sales of energy drinks and shots, by channel, 2006-11
Figure 18: Indexed growth of FDMx and convenience store retail sales of energy drinks and energy shots, by channel, 2006-11
Figure 19: Share of FDMx and convenience store retail sales of energy drinks and shots, by channel, 2006-11
Retail Channels—Supermarkets
Energy drinks remain profitable for supermarkets
Energy shots offer growth opportunity for the channel
Figure 20: U.S. sales of energy drinks and shots at supermarkets, 2006-11
Retail Channels—Convenience Stores
Convenience stores will continue to garner top share for energy drinks/shots
Figure 21: U.S. sales of energy drinks and shots at convenience stores, 2006-11
Retail Channels—Other Channels
Energy shots can bring long-term growth for the channel
Figure 22: U.S. sales of energy drinks and shots in other FDMx channels, 2006-11
Companies and Brands
Key points
Red Bull loses market share; faces stiff competition from Monster
Living Essentials uproots Rockstar from third place
Coca-Cola and PepsiCo continue to lose market share
Figure 23: FDMx energy drinks and shots sales of leading companies, 2010 and 2011
Brand Share—Energy Drinks
Key points
Red Bull continues to lead the segment; eschews flavors
Monster Energy exhibits the highest growth; continues with the innovation streak
Rockstar remains a distant third; innovates on function rather than flavor
Coca-Cola and PepsiCo fail to impress
Figure 24: FDMx brand sales of energy drinks, 2010 and 2011
Brand Share—Energy Shots
Key points
Living Essentials’ 5-Hour Energy rules the segment
Red Bull pulls out of energy shot segment
Private labels have growth opportunity in energy shots
Figure 25: FDMx brand sales of energy shots, 2010 and 2011
Innovations and Innovators
Pace of innovation continues to slow in 2011
Figure 26: Number of new energy drinks and energy shots product introductions in the U.S., 2006-11**
Seven out of top 10 claims in energy drinks are health related
Figure 27: Top 10 claims in new energy drinks products in the U.S., 2006-11**
Energy shots claims
Figure 28: Top 10 claims in new energy shots products in the U.S., 2007-11**
New energy drinks/shots products tout healthy and natural energy boost
Organic energy drinks and shots proliferate
Energy drinks/shots claims beyond providing energy boost
Marketing Strategies
Overview
Creating a lifestyle brand
Testimonials from consumers
Engaging a “celebrity” spokesperson
Television ads
5-Hour Energy ad focuses on functional attributes, competes with coffee
Figure 29: 5-Hour Energy—People wait for, make, and fuss with their morning coffee, TV ad, 2011
5-Hour Energy underscores “fix the tired” in ads
Figure 30: 5-Hour Energy—Fix the Tired, TV ad, 2011
Red Bull ads feature cartoons as well as real-life athletes
Figure 31: Red Bull—Ryan Doyle runs through a European city, TV ad, 2011
Figure 32: Red Bull—Boy gets dating leads from priest, TV ad, 2011
The Energy Drinks Consumer—Usage, Frequency, and Brands
Key points
Energy drinks consumer base grows, primarily due to population growth
Figure 33: Consumption of energy drinks, by gender, age, education, households with children, and region; January 2006-December 2010
Energy drinks display gain in volume consumption
Figure 34: Average volume* consumption of energy drinks, by gender, age, education, households with children, and region; January 2006-December 2010
Energy shot consumption grows considerably from 2010-11
Figure 35: Incidence of buying energy drinks and shots for self and household, April 2011
Men significantly more likely than women to buy energy drinks/shots for self
Figure 36: Incidence of buying energy drinks and shots for self, by gender, April 2011
Women are more likely than men to buy energy drinks for household
Figure 37: Incidence of buying energy drinks and shots for household, by gender, April 2011
Red Bull continues to be on top; 5-Hour Energy grows its base
Figure 38: Incidence of using energy drinks/shots brands, by age, October 2009-December 2010
Monster Energy is the most consumed energy drinks brand
Figure 39: Average volume consumption of energy drinks, by choice of brands, by age, October 2009-December 2010
Reasons and Occasions for Drinking Energy Drinks
Functional benefits remain the top reasons to drink energy drinks/shots
Figure 40: Reasons for drinking energy drinks and energy shots, April 2011
Impact of gender on reasons for using energy drinks and energy shots
Figure 41: Reasons for drinking energy drinks, by gender, April 2011
Figure 42: Reasons for drinking energy shots, by gender, April 2011
Impact of age on reasons for buying energy drinks
Figure 43: Reasons for drinking energy drinks, by age, April 2011
Afternoon is the primary occasion to drink energy drinks/shots
Figure 44: Energy drinks/shots consumption by occasion, April 2011
Energy drinks consumption by occasion and age
Figure 45: Energy drinks consumption by occasion, by age, April 2011
Attitudes and Behavior: Packaging Size, Flavor Choices, and Product Attributes
Packaging size choice among energy drinks users
Figure 46: Energy drinks purchase by size of packaging, by gender, April 2011
Figure 47: Energy drinks purchase by size of packaging, by age, April 2011
Orange and lemon/lime are the top energy drinks flavors
Figure 48: Flavor preference in energy drinks, by gender, April 2011
Low price and flavor variety are the top attributes
Figure 49: Importance of different product attributes when buying energy drinks, by gender, April 2011
Attitudes toward energy drinks
Energy drinks with no side effects to find favor among half of all drinkers
Multipacks continue to be popular for value proposition
Figure 50: Attitudes toward new products, ingredients, and packaging, by age, April 2011
Parents pull back on buying energy drinks due to safety concerns
Figure 51: Attitudes toward energy drinks’ safety, new products, and packaging, by gender, April 2011
Reasons for Not Drinking Energy Drinks
Most nonusers do not feel the need for energy drinks
Figure 52: Reasons for not drinking energy drinks and energy shots, April 2011
Nonusers aged 18-24 are more likely than the average to report “no need” for energy drinks
Figure 53: Reasons for not drinking energy drinks, by age, April 2011
Figure 54: Reasons for not drinking energy shots, by age, April 2011
Impact of Race and Hispanic Origin
Hispanics continue to the biggest consumer; blacks show attrition
Figure 55: Consumption of energy drinks, by race/Hispanic origin, January 2006-December 2010
Energy drink volume consumption declines among the key groups
Figure 56: Average volume* consumption of energy drinks, by race/Hispanic origin, January 2006-December 2010
Red Bull shows top penetration among Hispanics
Figure 57: Incidence of using energy drinks/shots brands, by race/Hispanic origin, October 2009-December 2010
Impact of race/ethnicity on reasons for buying energy drinks
Figure 58: Reasons for drinking energy drinks, by race/Hispanic origin, April 2011
Occasions to drink energy drinks
Figure 59: Energy drinks consumption by occasion, by race/Hispanic origin, April 2011
Packaging size
Figure 60: Energy drinks purchase by size of packaging, by race/Hispanic origin, April 2011
Flavors
Figure 61: Energy drinks purchase by flavor, by race/Hispanic origin, April 2011
The Teen Consumer
Teen consumer base shrinking
Male teens aged 15-17 are the biggest consumer
Energy drinks consumption declines among Hispanic, black, and white teens during 2008-10
Figure 62: Trends in the consumption of energy drinks among teens, by gender, age, and race/Hispanic origin, January 2006-December 2010
More than one in 10 teens drinks energy shots
Figure 63: Incidence of drinking energy shots among teens, by gender and age, May 2011
Teens decrease energy drinks volume consumption
Figure 64: Volume* consumption of energy drinks among teens, by gender, age, and race/Hispanic origin, January 2006-December 2010
Monster Energy is the most popular brand among teens
Figure 65: Brands of energy drinks consumed by teens, by age and gender, October 2009-December 2010
Hispanic teens have a bigger brand repertoire
Figure 66: Brands of energy drinks consumed by teens, by race/ethnicity, October 2009-December 2010
Volume consumption by brand
Figure 67: Average volume consumption of energy drinks among teens, by choice of brands, by age, October 2009-December 2010
Teens—Attitudes toward Energy Drinks
Most teens buy energy drinks with their own money
Figure 68: Incidence of buying energy drinks by parents and/or self, by gender and age, May 2011
Teens prefer 16-oz. energy drinks packaging
Figure 69: Energy drinks consumption by size of packaging among teen energy drinks users, by gender and age, May 2011
Attitudes toward energy drinks’ safety, flavors, and brands
Teens drinking fewer energy drinks due to the knowledge of harmful effects
Berry- and citrus-flavored energy drinks most popular among teens
Resealable packaging important to teens
Figure 70: Attitude toward energy drinks’ safety, flavors, brands, and packaging, by gender and age, May 2011
Custom Consumer Group
Men aged 18-34 are the key consumers in the market
Figure 71: Incidence of drinking energy drinks, by gender and age, April 2011
Figure 72: Energy drinks volume consumption, by gender and age, April 2011
Bigger packaging size plays a role in the way people use energy drinks
Figure 73: Attitude toward reasons to drink energy drinks by packaging size consumer use, April 2011
Occasion of drinking determines the reason for drinking
Figure 74: Attitude toward reasons to drink energy drinks by occasion of drinking, April 2011
Cluster Analysis
Naturally Refreshing
Demographics
Characteristics
Opportunity
Energy Indifferent
Demographics
Characteristics
Opportunity
Boosted Buzzers
Demographics
Characteristics
Opportunity
Cluster characteristic tables
Figure 75: Energy drink clusters, April 2011
Figure 76: Reasons for drinking energy drinks, by energy drink clusters, April 2011
Figure 77: Time/occasion of drinking energy drinks, by energy drink clusters, April 2011
Figure 78: Attitudes toward new energy drinks products, ingredients, and packaging, by energy drink clusters, April 2011
Figure 79: Factors influencing the purchase of energy drinks, by energy drink clusters, April 2011
Cluster demographic tables
Figure 80: Energy drink clusters by gender, April 2011
Figure 81: Energy drink clusters by age, April 2011
Figure 82: Energy drink clusters, by household income, April 2011
Figure 83: Energy drink clusters, by race, April 2011
Figure 84: Energy drink clusters, by Hispanic origin, April 2011
Cluster methodology
SymphonyIRI/Builders Panel Data: Key Household Purchase Measures
Overview
Consumer insights on key purchase measures—SS energy drinks
Brand map
Figure 85: Brand map, selected brands of SS energy drinks buying rate, by household penetration, 2010*
Brand leader characteristics
Key purchase measures
Figure 86: Key purchase measures for the top brands of SS energy drinks, by household penetration, 2010*
Appendix—Other Useful Tables
Reasons and occasions for drinking energy drinks
Impact of children in household on reasons for using energy drinks and energy shots
Figure 87: Reasons for drinking energy drinks, by presence of children, April 2011
Figure 88: Reasons for drinking energy shots, by presence of children, April 2011
Occasions to drink energy drinks and energy shots
Figure 89: Energy drinks consumption by occasion, by presence of children, April 2011
Figure 90: Energy shots consumption by occasion, by presence of children, April 2011
Attitudes and behavior: Packaging size, flavor choices, and product attributes
Packaging size
Figure 91: Energy drinks purchase by size of packaging, by presence of children, April 2011
Flavors
Figure 92: Flavor preference in energy drinks, by age, April 2011
Figure 93: Flavor preference in energy drinks, by presence of children, April 2011
Importance of different attributes when buying energy drinks
Figure 94: Importance of different product attributes when buying energy drinks, by presence of children, April 2011
Figure 95: Importance of different product attributes when buying energy drinks, by age, April 2011
Importance of difference attributes when buying energy drinks
Figure 96: Importance of different product attributes when buying energy drinks, by race/Hispanic origin, April 2011
Attitudes toward energy drinks
Figure 97: Attitudes toward new products, ingredients, and packaging, by gender, April 2011
Figure 98: Attitudes toward new products, ingredients, and packaging, by race/Hispanic origin, April 2011
Reasons for not drinking energy drinks
Impact of gender
Figure 99: Reasons for not drinking energy drinks, by gender, April 2011
Figure 100: Reasons for not drinking energy shots, by gender, April 2011
Reasons for not drinking energy drinks, by race/Hispanic origin
Figure 101: Reasons for not drinking energy drinks, by race/Hispanic origin, April 2011
Figure 102: Reasons for not drinking energy shots, by Race/Hispanic origin, April 2011
Appendix: SymphonyIRI/Builders Panel Data Definitions
Appendix: Trade Associations
Related research categories
By sector: Energy (in Soft drinks), General drinks
By market: United States (in North America)
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