Ready For Action!
Sports and energy drink-makers target untapped niches with line extensions, hybrids
Like the consumers who use them to gain an edge over the competition on the field, on the job or in the classroom, sports and energy drinks are, well, kicking on retailers’ shelves. According to figures provided by Chicago-based Information Resources Inc., dollar sales of non-aseptic energy drinks in food, drug and mass merchandise outlets jumped a whopping 69.4 percent during the 52 weeks ending Oct. 2, while sales of non-aseptic sports drinks surged 20.9 percent.
Given their stellar performance during the past year, it’s no surprise that makers of other beverages want a piece of the action. As a result, both segments have seen an influx of hybrids that combine energy and sports drinks with soda, functional beverages, lemonade, juice and even each other.
Among the most anticipated new entries is Pepsi’s new MDX, which features the familiar citrus flavor of Mountain Dew but delivers a much bigger kick, thanks to a “power pack” of ingredients typically found in energy drinks, including ginseng, guarana, taurine and D-ribose. Intended to “bridge the gap between energy drinks and soda,” the new item is designed for “the consumer who is looking for a boost of energy but refuses to sacrifice taste and refreshment,” says Marketing Vice President Katie Lacey of Purchase, N.Y.-based Pepsi-Cola North America.
Offered in 14-ounce PET bottles that showcase MDX’s neon green color, the so-called “energy soda” landed in stores nationwide on Nov. 1, but consumers got their first peek during a 30-second commercial that aired during the World Series. The comprehensive marketing campaign also includes both print and radio advertisements.
Top energy drinks by brand
Brand Dollar Sales % Change Vs. Prior Year Market Share % Change Vs. Prior Year
Red Bull $213,249,000 53.4% 54.4 -5.7%
Rockstar $37,390,520 89.5% 9.5 1.0%
Monster Energy $36,998,680 192.6% 9.4 4.0%
Sobe Adrenaline Rush $20,298,340 40.0% 5.2 -1.1%
Amp $18,851,420 40.4% 4.8 -1.0%
Sobe No Fear $17,346,630 93.8% 4.4 0.6%
Full Throttle $16,955,790 NA 4.3 4.3%
Rip It $2,652,455 860.8% 0.7 0.6%
Hansen’s Lost Energy $2,453,903 156.9% 0.6 0.2%
Sobe Lean $2,382,621 NA 0.6 0.6%
Source: Information Resources Inc., total food, drug and mass merchandise for the 52 weeks ending Oct. 2, 2005
Not to be outdone, Atlanta-based Coca-Cola recently announced it will introduce its own energy soda next February. Said to “drink like a soda, but kick like an energy drink,” the company’s new Vault features a “lightly carbonated yet bold citrus flavor.” According to a company spokesperson, both it and sugar-free Vault Zero will be available in  20-ounce PET bottles as well as 1-liter bottles.
And if consumers don’t like the soda-energy drink combination, Coca-Cola has another option: A “first-of-its-kind” sports drink-energy drink amalgam offered under the Advance by Powerade moniker. Described by the company as “hydration with a boost,” the non-carbonated product is designed to give active consumers an edge by combining the B-vitamins and electrolytes found in traditional sports drinks with the taurine and caffeine offered by energy drinks. Expected to hit the shelves in January 2006, the product will be packaged in easy-to-grip 16-ounce bottles, and will be available in both Cherry Lime and Berry flavors, reports a spokesperson. It’s expected to be merchandised alongside other energy drinks (not sports drinks) and will be priced to compete in that segment.
To help introduce the new item, Coca-Cola will roll out a comprehensive marketing campaign that combines in-store merchandising and promotions, digital programming and sampling at “action-oriented” venues, such as health clubs and ski resorts. Advance is also prominently featured in a just-released video game from Activision called “Tony Hawk’s American Wasteland.”
While Advance takes sports drinks to one end of the spectrum in terms of health and wellness, a new product from Delmar, N.Y.-based DZL Productions pushes it toward the other. According to owner/president Matt Conroy, DZL Gear is a true hybrid, a functional beverage and sports drink in one product. Offered in 16-ounce cans, DZL contains 1,000 mg. of joint-friendly glucosamine and 20 grams of muscle-building protein in every serving. “It’s completely unique,” Conroy says of the product, which makes a point of being sugar-, carbohydrate- and trans fat-free and boasts only 90 calories per serving.
“DZL is designed for the athletic-minded individual who wants to improve his or her performance with a higher level of nutrition. It has ‘baby boomer’ written all over it,” he admits. “But it’s really for any athletic-minded individual looking for an edge, naturally.”
Finally, Chicago-based Gatorade recently extended its flagship Thirst Quencher brand to include three new Gatorade-Lemonade combinations. Backed by a series of “lemonade stand” commercials that aired last March, the new item is available in two flavors — Traditional Lemonade and Raspberry Lemonade — plus a third flavor — Strawberry Lemonade — that’s available only at Wal-Mart. It’s offered in 32- and 64-ounce bottles and 20-ounce eight-packs.
No end in sight
Despite strong gains during the past several years, the energy drinks category shows no signs of slowing down. In fact, IRI reports dollar sales for the 52 weeks ending Oct. 2 topped $390 million. But add in sales at convenience stores, gas stations and other outlets not tracked by IRI and the category easily surpasses the half-billion dollar mark.
What’s behind the growth? “The energy drinks category has expanded to include all demographics,” explains Mark Hall of Corona, Calif.-based Monster Beverage Co., maker of Monster Energy. “It’s not just young males anymore.”
Adds Patrice Radden of Santa Monica, Calif.-based Red Bull USA, “[Energy drink] consumption is driven by situations, not socio-demographics. We target all people — truck drivers, businessmen, athletes, college students ... anyone who needs energy.”
Top sports drinks by brand
Brand Dollar Sales % Change Vs. Prior Year Market Share % Change Vs. Prior Year
Gatorade $636,109,400 24.2% 48.5% 1.3%
Powerade $192,027,300 24.9% 14.6% 0.5%
Gatorade Frost $130,953,200 10.4% 10.0% -0.9%
Gatorade Fierce $102,417,200 11.6% 7.8% -0.7%
Gatorade X Factor $90,248,670 70.9% 6.9% 2.0%
Gatorade All Stars $85,469,920 35.5% 6.5% 0.7%
Gatorade Ice $25,381,460 -57.7% 1.9% -3.6%
Gatorade Xtremo $22,781,380 6.8% 1.7% -0.2%
Gatorade Endurance Formula $10,737,600 NA 0.8% 0.8%
Private Label $6,919,517 -9.2% 0.5% -0.2%
Source: Information Resources Inc. total food, drug and mass merchandise for the 52 weeks ending Oct. 2, 2005
While category leader Red Bull, whose 54.4 percent share dwarfs the rest of the field, appears to possess the kind of broad appeal to which Radden refers, other players are chasing niche markets. For example, category newcomer Uno Mas, which hit the shelves in June, specifically targets Hispanics, already one of the largest consumers of energy drinks. According to David Kreitzer, chief executive officer of the Howard Beach, N.Y.-based company, the 16-ounce product comes in four soda-type flavors, including Orange, Grape, Lemon-Lime and Cola. “The biggest complaint about energy drinks is that they don’t taste good,” he explains. “So we tried to get closer to a soda flavor with this product.” While Uno Mas contains the same energy-boosting ingredients as N.Y. Minute, a more mainstream energy drink offered by its sister company, it is sweetened with regular fructose rather than crystalline fructose to achieve the sweeter flavors often preferred by Hispanics, Kreitzer says.
Monster Energy also is using sweeter flavors to attract a particular demographic. According to Hall, the company’s new Monster Assault is aimed at the category’s youngest consumers. “We saw some of our competitors gaining traction in the category with a sweeter profile,” he says. But instead of changing its tried-and-true formula, the company opted for a line extension with a sweeter flavor. “It’s a stronger, more aggressive product,” Hall says, citing its camouflage-decorated can. “It’s positioning is somewhat irreverent.” And as any parent of teenagers knows, that’s what they’re all about.”
A healthier approach
Another energy drink manufacturer, Denver-based Go Fast! Sports & Beverage Co., also is narrowing its focus, concentrating its marketing efforts on “more health-conscious consumers.” According to Founder and Chief Executive Officer Troy Widgery, “Go Fast! consumers tend to be more athletic [than other energy drink users] and live an active, healthy lifestyle.” As a result, the company’s ingredient list differs slightly from the rest of the pack. Although it, too, contains caffeine, guarana, ginseng, ribose and taurine, it also contains B vitamins, ginkgo biloba, milk thistle herb and several other “natural” energy ingredients, but no high fructose corn syrup (it’s sweetened with Australian honey and sucrose), “offering a longer, more sustained energy boost without the high-sugar jitters-and-crash effect associated with some products,” Widgery says.
Though initially available only in 8.4-ounce cans — the traditional package size in this category, though it’s no longer the top seller — Go Fast! and Go Fast! Light are now offered in 11.9-ounce cans as well. While many companies have moved to 16-ounce cans, Widgery says that’s just too much.
“With higher quality ingredients, you can get a superior energy kick in a smaller serving size without consuming unnecessary calories and sugar. It’s quality vs. quantity.”
Another segment of the population catching the attention of energy drink marketers is women. Among those targeting the fairer sex is Coca-Cola, which recently dusted off one of its most iconic brand names for a new product set to debut this coming February. According to a company spokesperson, sugar-free Tab Energy, “a deliciously crisp and lightly carbonated pink beverage ... but not a cola,” will be offered in mid-sized 10.5-ounce cans, available both individually and in four-packs.
Coca-Cola’s flagship energy drink, Full Throttle, which has been on the market less than a year but already holds the category’s No. 7  spot, also is expanding its reach among women — as well as calorie-conscious men — with the mid-August launch of a sugar-free version. “Based on our results in test markets we expect Sugar-Free Full Throttle to increase consumption occasions among current energy drink users and appeal to new consumers seeking the raw energy Full Throttle provides,” says Director of Sports and Energy Drinks Marketing Mary Herrera.
Coca-Cola expects to follow that introduction in 2006 with a line extension called Full Throttle Fury, which will also be available in a sugar-free version.
Other energy drink manufacturers also have launched “healthier” versions of their products, but depending on their target consumer, they describe them in different ways. No one likes the term “diet,” which has been deemed “too girly” for the male-dominated energy drinks category, but sugar-free, light and low-carb all are popular. In a category driven by image, Hall says, “We think ‘low-carb’ is a sexier way to say diet.” And unlike sugar-free Red Bull, 10-calorie Monster Energy Lo-Carb, which is sweetened with Splenda, does have a little bit of glucose because “We think you need some to achieve the effect consumers are after.”
But for the really, really health conscious, Monster Energy just introduced Monster Energy Khaos, an energy drink-juice hybrid. Like a similar product called Lost Five-O (because it contains 50 percent juice) offered by Monster’s sister company, the item is designed to expand the category to “those consumers still afraid of energy drinks,” Hall says.
Something for everyone
Like the energy drinks category, the sports drink segment also is dominated by one mega-brand. Occupying eight of the Top 10 spots, Gatorade and its various permutations own a staggering 84.2 percent of total category dollar sales. While six of the seven sub-brands on the market posted sales gains (the lone exception, Gatorade Ice, has all but disappeared from retailers’ shelves), the biggest jumps were recorded by X Factor (up 70.9 percent) and All Stars (up 35.5 percent).
While X Factor features the brand’s most popular original flavors “with a fruity twist” and All-Stars offers bolder, sweeter flavors in 12-ounce bottles specially designed for the Little League set, the newest addition to the Gatorade stable is more than just a new flavor. According to a press release, the company’s Endurance Formula, is designed to “meet the needs of athletes during longer, more intense workouts and competitions when fluid and electrolyte losses become substantial” (think two-a-day football practices, marathons and triathlons, or all-day soccer tournaments). Introduced in March, the new item features a “specialized five-electrolyte blend,” which includes nearly twice the sodium and three times the potassium of Gatorade Thirst Quencher, as well as chloride, calcium and magnesium. Offered in 34-ounce bottles, Endurance Formula comes in Lemon-Lime, Fruit Punch and Orange.
Despite Gatorade’s domination of the sports drink segment, competitors aren’t throwing in the towel. In fact, one of the most intriguing new introductions of the past year came from the No. 2 player, Powerade, which seeks to fill one of the few niches not yet addressed by Gatorade.
Introduced in July, Powerade Option “offers the hydration benefits of a sports drink without the calories,” says Michael La Kier, senior brand manager, sports drinks. It’s designed for “non-jocks” who lead active lives “but don’t want to put back the calories they just worked off.”
“Historically,” he explains, “new packaging and flavors have driven [growth in] this category. Going forward, however, consumers are likely to look to sports drinks to fulfill more functional needs.”
At just 10 calories per 8-ounce serving, Option is currently available in Lemon, Black Cherry and Strawberry flavors. BI