Getting Reenergized

Product innovation and a surprising new consumer base give energy drinks a boost

Over the past few years, energy drinks have been living up to their name, having overcome the challenges of a troubled economy and continuing to grow sales. While energy shots have stumbled, full-size energy beverages are enjoying a resurgence.

“We are encouraged by the ongoing recovery of the energy category, particularly Monster [Energy], with its ongoing sales growth and share gains,” said Bonnie Herzog, senior managing director of tobacco, beverage and consumer research at Wells Fargo Securities LLC. While Monster enjoyed success in 2013 with the launch of Zero Ultra, a no-sugar, no-calorie drink, Herzog noted that “Monster’s core energy brand outpaced companywide growth, a sign that the brand continues to have significant growth opportunity.”

What’s driving this positive growth even as other sources of caffeine, such as shots and carbonated soft drinks, struggle? Some believe it is simple effectiveness.

“Mintel consumer research finds that most users choose energy drinks because they feel they are more effective for energy and/or alertness than other beverages,” Jennifer Zegler, senior food and drink analyst at Mintel, told Convenience Store News. “Thus, it seems for some consumers it’s hard to go back to a caffeinated beverage or other food or drink for a pick-me-up after trying energy beverages.” New energy beverage offerings and brand extensions also provide an “ever-refreshing” selection for these consumers to choose from.

Those doing the selecting are increasingly different from the young men who are seen as the typical target consumer. Recent Nielsen Homescan data revealed that busy mothers and their households, classified as “Young Bustling Families,” are more likely to buy energy drinks than post-college young adults and independent singles in their 20s and 30s.

Additionally, energy drinks have grown beyond sugary-flavored beverages in large cans. “Recently, sales have risen because of innovations such as new packaging and flavors from leading brands, as well as category entries from the likes of Kraft Foods [Group] with its MiO Energy liquid drink mix, and Starbucks Refreshers,” said Zegler. “These products are expanding the appeal of energy beverages beyond the current energy drink user base.”

MiO Energy, which offers customization of both strength and flavor, appeals to consumers who want to control or change up their energy boost, while Starbucks Refreshers’ caffeine is sourced from green coffee beans, which are seen as “more natural and familiar” to Starbucks customers — something the chain has emphasized in the product’s promotions.

Flavor innovation also drives the category. “Flavors are a leading reason why nearly one-third of adults surveyed by Mintel who drink energy beverages consume them,” Zegler said.

Despite all this upside, convenience store retailers should maintain a realistic perspective on the market for energy drinks. Just one-third of Mintel-surveyed adults consume energy drinks and media coverage has focused on negative news about their health and safety, she cautioned. Educating and reassuring customers that energy drinks are safe when consumed as recommended can help appeal to new users while retaining existing ones.