Energy Drinks Losing Momentum?

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Energy Drinks Losing Momentum?

NEW YORK -- Last year, energy drinks were all the rage with a growth rate of 30 percent. For the month of June, however, sales have dipped, according to a Brandweek report.

Even the segment’s leading brand, Red Bull, has seen a drop. "It’s still the healthiest beverage sector, but its prime Sun Belt market overlaps closely to the areas where the housing bust has been the most severe, so there is definitely concern," Gerry Khermouch, editor of Beverage Business Insights, told Brandweek.

The slowdown is attributed to a stalling economy, new competition and rising gas prices. "After filling up, a lot of consumers don't have the heart to even enter the store," Khermouch said.

According to Beverage Digest, Red Bull is stalling due to its pricing of $2 per 8.3-ounce can, while Monster Energy, Amp and others are selling for the same price but offering a 16-ounce can. PepsiCo’s Amp (also 16 ounces) grew more than 50 percent in volume in second quarter.

"Energy drinks are premium priced," John Sicher, editor of Beverage Digest, told Brandweek. "Some consumers are trading down. Others are buying them less frequently."