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CommentaryEnergy Drinks & Shots

Beverage Beat: In search of acceptance and understanding

By Jennifer Zegler
Jennifer Zegler
August 15, 2011

Last month, market research firm Nielsen outlined its new platform of 12 criteria for new product success during an “Innovation Revelation” webinar. In addition to outlining the dozen steps, Vicki Gardner, senior vice president of product innovation North America for the New York-based company, noted that traditionally successful product launches often offer benefits previously unavailable in the marketplace.

The Nielsen executive highlighted Red Bull as one product that was unique at the time that it launched. In this month’s Category Focus on energy drinks and shots, SymphonyIRI data show that Red Bull continues to dominate the energy drink category with nearly $2.4 billion sales in supermarkets, drug stores, gas and convenience stores and mass merchandise outlets, excluding Walmart, for the 52 weeks ending June 12.

With more than $912 million in sales in measured channels, according to SymphonyIRI data, this month’s cover story company, Living Essentials LLC, also remains at the top of the market that it pioneered with its 5-Hour Energy brand.

In its 20,000 tests of new product success metrics, Nielsen found that one of the main areas where new products struggle is “findability,” which is a term for describing consumers’ ability to locate a product in the store. Manoj Bhargava, founder and chief executive officer of Living Essentials, explains that 5-Hour Energy’s small format allows the product to be sold near the cash register alongside candy, key chains and batteries instead of competing with beverages for shelf space.

However, the ubiquity of energy products at retail was cited by U.S. Sen. Dick Durbin of Illinois when he introduced the Dietary Supplement Labeling Act in late June. The act, which would regulate many products in the energy category, proposes that the U.S. Food and Drug Administration (FDA) establish a definition of “conventional foods,” which would distinguish between food products and health aids, according to the senator’s official statement on the legislation.

“The average person may understand the impact of vitamin C, vitamin D, vitamin B, whatever it might be, but when you get into new versions of dietary supplements, you cannot possibly as a lay person understand what the impact of that combination might be on your body,” Durbin said at a July press conference in Chicago.

The proposed legislation would require manufacturers to register dietary supplement products with the FDA and provide a description of each product, a list of ingredients and a copy of the label. In addition, manufacturers would have to disclose the known risks of ingredients and display a mandatory warning if the product contains a dietary ingredient that could cause potentially serious adverse effects.

“My goal is to take the decision about how a product will be regulated out of the hands of the manufacturer and put it in the hands of the FDA where it belongs,” Durbin said, in a statement. “Consumers who don’t scour the fine print on the back of the products may never know the difference, but they will be safer as a result of this bill.”

KEYWORDS: dietary supplements energy drinks energy shots

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Jennifer Zegler is a contributor for Beverage Industry magazine.

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