If there’s one area worth retailers putting their energy into, it’s energy drinks. It is one of the best-performing sectors in the soft drinks category, according to IRI Marketplace. In fact, the sector has grown by 5.3% (Nielsen) in the past year thanks to the huge amount of NPD around low-sugar formulations and new flavours pulling in a wider audience.
“This is a very important category for us,” says Jason Sichel, store manager of Spar Holmer Green, in Aylesbury, Buckinghamshire. One of the reasons for its importance, Jason explains, is that energy drink consumers tend to buy lots of them, and regularly, too.
“We will get customers who buy two or three cans at a time, or even do more than one trip in a day to buy energy drinks,” he says.
Mace retailer Louise Hammond, of AW&D Hammond, in Halesworth, Suffolk, couldn’t agree more. “Energy drinks, for us, are very important – the most important drink after Coke.
“We have a lot of football players and joggers around, and body builders who go to the gym down the road, so they tend to pick up the energy drinks. But they’re not only for sporty people – energy drinks are the kind of drinks people buy on a day-to-day basis.”
David Wyatt, site manager of Costcutter service station in Copthorne, West Sussex, believes that energy drinks, and in particular Red Bull, are key items for him to stock at his forecourt store. “Red Bull outsells any other drink we sell, after Coke and water. Eight of the top 20 lines are energy drinks, seven are carbonated drinks such as Coke or Pepsi Max, four are water and one is Ribena.
“Needless to say energy is a massive category representing 33% of total drinks sales based on our top 20 best-sellers. Also nine of the top 20 lines are diet drinks.
“Because we are a garage people are often on the road and many are builders, so they are looking for something to wake them up and help them concentrate.”
What with all the news around sugar tax and health concerns, much of the industry’s new product development has been focusing on low- or zero-sugar variants. As a result, 60% of low-calorie soft drinks growth has been seen in energy (Nielsen Scantrack).
Sweet on sugar-free
Jason is planning to increase his range of zero-sugar energy drinks. “With the sugar tax we have got to start thinking about providing more options, because in the future sugar-free could be the main bulk of the category.”
Soft drinks giant Coca-Cola Enterprises (CCE) has been busy working in this field. Trade communications manager Amy Burgess explains: “At CCE, we have been focusing heavily on our low- and zero-calorie ranges for some time, and have invested £15m in the reformulation of our products across our soft drinks portfolio since 2012.”
The focus on lower-calorie drinks has seen CCE launch a range of new variants, including Monster Energy Absolutely Zero, the Relentless Zero range and the Monster Energy Ultra range. The latter contains no calories and comes in three different flavours: Monster Energy Ultra white has a light sparkling citrus flavour; Ultra sunrise has a citrus and orange twist; and Ultra red blends the original Monster Energy blend with a drink that’s refreshing, light and crisp.
“With demand for zero-calorie drinks higher than ever before, retailers may wish to consider focusing on these sugar-free products to help maximise their sales of energy drinks,” Burgess points out.
AG Barr head of marketing Adrian Troy agrees that the low-sugar segment is where growth is at, adding that 49% of all carbonated soft drinks sold now are either low- or no-calorie variants (IRI), meaning the low-calorie energy market is currently worth £47m and growing at 14% to 6 December 2015 (IRI).
The firm recently added a punched guava flavour to its Pure Zero range.
“By introducing punched guava – the best-selling flavour in the Rockstar line-up – to the Rockstar Pure Zero range, we are giving retailers an added opportunity to profit from this fast-growing sector,” says Troy, adding that it is flavoured energy which is driving much of the sector’s sales increase.
“Rockstar’s wide range of 12 flavours is the biggest in the energy drinks category and is a key motivator for shoppers and consumers to choose Rockstar as it doesn’t define how an energy drink should taste.”
South-East Asian brand hits the UK
South-East Asian drinks brand Carabao has introduced a new energy drinks range to the UK.
Carabao, which will be a top-tier sponsor of Chelsea FC and Reading FC from next season, offers consumers a more carbonated and full-flavoured alternative to other energy drinks.
Established 15 years ago in Thailand, Carabao will initially be available in the UK in two variants – original and sugar free – in a 325ml can (rrp £1.19), with further flavour launches planned for later in the year.
Partner company Intercarabao will be managing the product distribution in the UK, before embarking on a global rollout.
The energy drink is said to take its inspiration from ‘the Carabao’, the revered Asian water-buffalo admired for its strength, stamina and spirit. Styled with “energetic” typography and the ‘Bring It On’ tagline, the sleek can has been designed to bring to life the heritage and story of the Carabao brand, the company says.
Intercarabao CEO Peter Gutierrez says: “Our UK research demonstrates that there is a huge community of consumers that feel energy drinks do not speak to them, or are not relevant for their lifestyle. It’s clear to us that the category could be doing a much better job of appealing to a broader audience, reaching beyond the niche of thrill-seeking young men.
“That’s why we’re bringing Carabao to the UK. We want to give consumers with stressful and busy lives a great-tasting energy boost that they feel speaks to them.”
Carabao’s launch will be supported by a multi-million pound integrated marketing campaign kicking off from August 2016.
Flavours in favour
Binny Amin of Blean Village Londis and Binny’s in St George’s Centre, Canterbury, Kent, has high hopes for the new launch, noting that the guava Rockstar is one of the most popular flavours among customers.
Red Bull is also driving growth by increasing the choice of flavours through its Editions range, helping it to grow at 5.1% value and 5.7% volume year on year (IRI).
Category development manager Rich Fisher says: “The success of Red Bull Tropical Edition has meant it was the biggest new energy SKU to launch in 2015 and has become the best-selling Edition in the UK (IRI).”
Louise says that flavoured variants are growing in popularity. “Monster and Relentless do a great variety of different flavours which people seem to be picking up more often now.”
Binny agrees: “Relentless is more popular than it used to be with the addition of the new flavours and the new pack design. The flavoured drinks are going better than the originals now. Customer reaction to the additions has been positive.”
In response to the low-sugar requirement, Lucozade Zero – a low-calorie version of the original variant – has been launched in orange and pink lemonade flavours.
The launch of Lucozade Zero is being backed by a £5m consumer media campaign, with retail support including POS material and eye-catching display units.
Lucozade Zero is available in 380ml pricemarked and non-pricemarked bottles, 500ml bottles, plus 380ml multipack and 1ltr format.
Lucozade Energy has relaunched its 250ml slimline can range with a sleek new look.
The redesign is being supported by in-store activation, which will include a suite of pos material to catch the attention of consumers in-store.
Following the launch of the new Lucozade Zero range in May, the low-calorie orange variant will also be available in the 250ml can format later in the year.
The new look will be available in orange, original and pink lemonade variants.
Lucozade Energy senior brand manager Ashleigh Roberts says: “For consumers, these single-serve cans provide an easy ‘grab and go’ option for those moments throughout the day when we all need a refreshing break. More and more consumers are seeking out drink-now canned soft drinks, and with strong sales to date we’re confident that the new-look cans will be a successful addition to the Lucozade Energy range”.
The slimline cans have an rrp of 59p in pricemarked packs and 69p (non-pricemarked).
Lucozade’s pink lemonade flavour has been the brand’s most successful new product to date, boosted by the fact it appeals strongly to a female audience.
Louise agrees: “The most popular energy drinks for female shoppers are the Lucozade flavours, such as the pink lemonade. Red Bull has pretty much an entirely male audience.”
Boost Drinks sales director Al Gunn says flavours were a “huge success story” for the brand last year and this trend looks set to continue, along with the increase in demand for sugar-free options.
In line with this trend, Boost Drinks – a brand which is not available in multiples – has added a summertime limited-edition sugar-free tropical guango, with guava and mango (250ml cans pricemarked at 49p, in cases of 24).
Scheckter’s Organic Energy is using more unusual flavours to change consumer perceptions of what energy drinks can be like. “Our products are great tasting and full of organic energy that doesn’t bring about the dreaded jitters or crash,” says Scheckter’s Organic Energy chief executive officer Charles Philips.
“This opens up the energy drinks market to those consumers whose focus is on cleaner eating and drinking.
“Some 62% of the UK do not drink energy drinks mainly due to their dislike of the ingredients and the taste (Degusta Box UK). Adding drinks such as Scheckter’s Organic Energy will add incremental value and volume to retailers’ energy drink sales,” he claims.
Scheckter’s Original and Lite drinks are available in pomegranate, elderberry & lemon juice with organic energy from guarana; green tea, ginseng and raw coffee bean extract; green tea & ginger; and green tea & mint.
Picking pack sizes
As if there wasn’t enough choice of flavours, retailers also have a plethora of pack sizes and price points to choose from.
David says he sells three different sizes of Red Bull – 250ml, 330ml and 500ml – and all sell well, but he claims that the 250ml is the most popular and an absolute must-stock for c-store retailers. “We sometimes do the Red Bull four-pack if they are on promotion. People will fork out for those if the price is right.”
Despite Red Bull being the top seller in his range, David says the category is very much driven by price, not just what’s on the label. “Costcutter’s own-brand energy drinks, which are pricemarked in line with Boost at 49p, sell very well and, clearly, the sales of these are price driven.”
Burgess recommends stocking the £1 PMP 500ml cans of Relentless and £1.19 500ml cans of Monster Energy.
Jason backs up this advice, stating that the 500ml cans of Relentless and Monster are very important sellers for his store, along with the 250ml cans of Red Bull.
Louise has noticed that the larger format cans are giving Red Bull a run for its money.
“The 500ml formats have started to squeeze Red Bull a little. I think some customers see Relentless and Monster as a much better deal and they do better promotions. While Red Bull is sometimes on offer at two for £2, the others have that deal on a lot more often and in bigger bottles.”
Pricemarked packs are another important offering for c-store retailers. Some 44% of shoppers are more likely to buy a product if a pricemark is visible on it (HIM CTP 2015) and 76% of shoppers have said PMPs help a convenience store’s price image (HIM CTP 2015).
Costcutter retailer Chris Mitchener, of Swan Street Stores, Kingsclere, Hampshire, says: “Nearly all the drinks in my fridge are pricemarked. I’ve chosen to stock these packs as they are good sellers. They give customers confidence that they are not paying an extra store margin.”
Retailers and brands agree that the energy drinks category is one of the most important categories for the sector and that it is growing, both in terms of sales and variety. The only problem retailers have now is which products to pick.
Jason says: “The difficulty is that a lot of the brands are very keen on us stocking every variant in their range. While I would love to do that, we simply don’t have the space. It’s all about gauging which lines are most popular, which are likely to stick, and keeping up with new trends such as demand for sugar-free variants.”
How to maximise energy drinks spend
Follow these simple steps to maximise energy drink sales:
Some 30% of sports and energy products purchased are for on-the-go consumption so stock energy drinks in the chiller to meet this shopper demand (Nielsen)
Shoppers look at only 40 items when in a store, so market the category clearly depending on the size of the store
Consumers shop by shape and colour and navigate the fixture by brand. Spend for functional products averages £4.06 per year, compared with refreshment at 53p (Kantar World Panel). Red Bull is the number one functional energy drink (IRI) so should be used to signpost the category
Block brands vertically within a product category and double-face best sellers, maximising stand-out in-store
Merchandise energy drinks in the centre of the chiller to meet shopper need states, and from left to right: refresh, stimulate, hydrate. Lucozade recommends retailers create a second siting close to newspapers or confectionery
Multipacks offer a take-home option for shoppers on a top-up mission, or for those looking for sharing at home. These shoppers are key to convenience stores as they spend more than the average convenience store shopper (£10.20 vs. £6.39) and visit more frequently, according to HIM Research & Consulting.