Having enough energy to get through the day has fueled consumer interest in the energy drinks and energy shots category, which is steadily growing, experts say. In fact, the energy drinks category saw dollars sales of nearly $11 billion in multi-outlets for the 52 weeks ending May 20, a 4.1 percent increase over the prior-year period, according to data from Chicago-based Information Resources Inc. (IRI).
However, the energy shots category didn’t fare as well. Energy shots experienced a 4.1 percentage-point contraction and sales of just over $1 billion for the same time period, IRI data suggests.
In 2016, wholesale dollar sales for energy drinks grew 7.3 percent to $7.8 billion, stated Roger Dilworth, senior editor at New York-based Beverage Marketing Corporation (BMC) in Beverage Industry’s August 2017 issue. Energy shots, on the other hand, experienced 2 percent wholesale dollar sales growth in 2016, to reach $651 million. However, as the market begins to mature, growth is expected to slow.
“Energy drinks have already performed better than anyone could have expected, so inevitably their growth will slow to the 4.5 percent to 5 percent annual range in the next five years,” Dilworth said.
(Individual brands)
| Dollar Sales | % CHANGE VS. PRIOR YEAR | MARKET SHARE | % CHANGE VS. PRIOR YEAR | |
| Red Bull | $2,899,770,112 | -0.8 | 26.4 | -1.3 |
| Monster Energy | $1,667,573,248 | 9.1 | 15.2 | 0.7 |
| Red Bull Sugar Free | $741,633,600 | 1.3 | 6.8 | -0.2 |
| Monster Energy Zero | $636,118,016 | 13.1 | 5.8 | 0.5 |
| Nos | $442,601,920 | 3.9 | 4.0 | 0.0 |
| Monster Rehab | $302,554,496 | -3.7 | 2.8 | -0.2 |
| Monster Energy Lo-Carb | $293,891,360 | -4.2 | 2.7 | -0.2 |
| Monster Mega Energy | $241,212,144 | -2.2 | 2.2 | -0.1 |
| Rockstar | $224,019,840 | -11.4 | 2.0 | -0.4 |
| Red Bull Blue Edition | $207,766,688 | 2.1 | 1.9 | -0.04 |
| Category total* | $10,965,677,056 | 4.1 | 100.0 | — |
Source: Information Resources Inc. (IRI), Chicago. Total U.S. supermarkets, drug stores, gas and convenience stores, mass merchandisers, military commissaries, and select club and dollar retail chains for the 52 weeks ending May 20.
Los Angeles-based IBISWorld also forecasts a decrease in growth for the energy drinks/shots segment in its October 2016 “Energy Drink Production in the US” report.
“The energy drink production industry has experienced substantial growth over the past five years,” it stated in the August 2017 issue of Beverage Industry. “While the industry attained double-digit growth during parts of this period, its growth has significantly decelerated from the previous decade. This deceleration is characteristic of a growing industry that is approaching saturation.”
In its September 2016 “The U.S. Energy Drink Market” report, BMC notes that growth is expected to continue through 2020.
“Wholesale dollar sales are anticipated to advance at a 7.6 percent compound annual growth rate (CAGR) to finish 2020 at $10.5 billion,” it stated in Beverage Industry’s August 2017 issue. “Although retail dollars won’t grow as fast from a percentage standpoint, 2020’s anticipated sales of $18.5 billion would not be anything to sneeze at.”
Category growth has largely been a result of the energy drinks segment, according to Chicago-based Mintel’s May 2017 “Energy Drinks – US” report. The energy drinks segment makes up approximately 90 percent of the total energy market, it states.
The energy drinks segment remains dominated by Austria-based Red Bull GmbH and Corona, Calif.-based Monster Beverage Corp., which maintain 38.3 percent and 26.8 percent of the market, respectively, according to IBISWorld’s report.
Making up 27.5 percent of the market, energy shots are expected to continue to grow through 2021, the report states. The success of Farmington Hills, Mich.-based Living Essentials LLC’s 5-Hour Energy, which dominates the market, has drawn competitors into the energy shots market, it notes.
(Individual brands)
| Dollar Sales | % CHANGE VS. PRIOR YEAR | MARKET SHARE | % CHANGE VS. PRIOR YEAR | |
| 5 Hour Energy | $965,795,584 | -4.7 | 90.6 | 0.6 |
| Tweaker | $19,951,392 | 20.4 | 1.9 | 0.4 |
| Private Label | $16,296,745 | 13.9 | 1.5 | 0.2 |
| Stacker 2 Extra | $15,482,870 | 7.8 | 1.5 | 0.2 |
| Stacker 2 | $9,168,946 | -27.1 | 0.9 | -0.3 |
| Rhino Rush | $8,875,247 | 8.1 | 0.8 | 0.1 |
| Stacker 2 Extreme | $8,393,623 | 4.6 | 0.8 | 0.0 |
| EE | $5,308,722 | 20.5 | 0.5 | 0.1 |
| Vital 4U Screamin | $3,064,649 | 4.5 | 0.3 | 0.0 |
| Rip It Energy Fuel | $2,554,080 | -12.6 | 0.2 | -0.2 |
| Category total* | $1,066,254,080 | -4.0 | 100.0 | — |
Source: Information Resources Inc. (IRI), Chicago. Total U.S. supermarkets, drug stores, gas and convenience stores, mass merchandisers, military commissaries, and select club and dollar retail chains for the 52 weeks ending May 20.
“Energy shot products differentiate themselves from the larger energy drinks segment by providing a drink that is quickly consumed and provides immediate energy,” it states. “5-Hour Energy also attempts to differentiate itself by marketing itself as a healthier alternative than larger energy drinks, and it also emphasizes the lack of sugar and caffeine in its products.”
Added health benefits or functionality also could be advantageous for energy drinks and shots, according to Mintel’s “What’s Next?” report. In the report, Mintel highlights that 48 percent of consumers would be more interested in category products that contain antioxidants and 23 percent would be in those containing superfoods. It highlights the success of Mamma Chia’s energy line, which offers 90 mg of natural caffeine from guayusa, antioxidants, fiber and protein.
Mintel’s research shows that energy drinks are widely associated with caffeine, sugar and artificial ingredients, which creates challenges in a context in which many consumers are drawn to better-for-you beverages.
In addition, the report notes that one-fifth of consumers say that they’re “overwhelmed” by the amount of choices available for energy enhancement Therefore, addressing consumers concerns and innovating new product offerings with value-added traits can help the category grow, Mintel’s report stated. BI
