Over the past 10 months, c-store retailers have seen no fewer than 12 entrants to the energy shots market hit their counters in an attempt to corner this new sub-category.

The shots invasion began in May this year when US brands Target, Voltz, X8 and Focus were released here in a matter of weeks of each other and attracted attention from both the public and media. These brands were soon followed by the likes of Go Fast!, Pocket Rocket and Ubershot.

The big three names when it comes to energy drinks Red Bull, Lucozade Alert and Coca-Cola's Relentless have left it later to release their shots, however they do have the advantage of being renowned brands and so could afford to take their time a little to get their marketing ducks in a row.

The US energy shots market boasts 250 different products and is worth $0.5bn. In the 12 weeks to May 17, 2009, sales of shots in the US grew by a massive 84.5% (IRI). The top-selling energy shot there is currently 5-Hour Energy. Produced by Living Essentials, the shot accounts for 78% of sales in the category (IRI) and outsells its closest rival by almost 600%. The brand has also recently released extra-strength and decaf variants of the product.

Mike Sears of Go Fast! says that big names don't necessarily mean big sales when it comes to energy shots. "5-Hour energy was the first to enter the US market and has really cornered it," he says. "It pushed the product towards the adult market for busy people on the go and has been hugely successful. Some of the other big names haven't had a look in yet."

Voltz UK chief executive Rob Arnold says that brands which have a unique selling point will do well regardless of brand history. "Consumers are more aware now of ingredients and are asking which product is best for them," he says. "The product that has no added sugar or lowers cholesterol will fare better than others as consumers are more health-conscious and will stick with a brand that isn't loaded with sugar or chemicals."

Getting noticed

With the competition for the energy shots market hotting up, brands are using different methods to attract sales, from targeted marketing to unmissable packaging. Due to the diminutive size of the shots the best place to put them is close to the till, but as counter space is limited manufacturers have to make themselves as attractive as possible to retailers.

The big three companies Red Bull, GSK and Coca-Cola are banking on brand awareness to push their energy shots.

GSK category controller Mark Sterratt believes that consumers will be drawn to the brands they know. "Energy shots is a category for the future the format and functionality of shots meet the needs of soft drinks consumers and present a massive sales opportunity for retailers," he says. "The presence of trusted brands such as Lucozade in the market will rapidly accelerate consumer awareness and demand, as well as drive overall category growth."

Matt Hollier, head of off trade at Red Bull, agrees that name recognition will help certain products stand out from the crowd. "Red Bull is synonymous with energy and we think that retailers and the public will gravitate towards our shot."

Hollier adds that retailers and consumers need to be educated about energy shots. "People need to realise that they're not a substitute for a traditional energy drink," he says. "They're for people who don't want a full can of Red Bull or any other drink, and those who want a boost quickly. If retailers realise that shots are not here to replace energy drinks then they will understand the potential for incremental sales that shots provide."

He adds that shots are ambient and therefore won't take up space in the fridges, so retailers won't have to sacrifice any other chilled products. "Shots can be placed anywhere in the store, although the best place is beside the till as the impulse potential is huge," he says.

Another benefit for retailers is the margin offered compared with the amount of space taken up. A box of energy shots offers a margin of almost 50%, making it a lucrative enough product to justify its prime spot beside the till.

Brand loyalty

According to Chris Onslow, managing director of Target, the energy shots market is broken up into three stages. Stage one is the impulsive stage when people will try the product for the first time and not worry about which brand. Stage two will be when they actively go to buy it on a repeat basis; and stage three is when consumers have a favourite individual brand.

"Currently, the UK is at stage one," says Onslow. "It's a level playing field for all brands, so now is the time for them to be making their mark and preparing for the pushes to stages two and three. America is now at stage two, where people are buying energy shots as part of their everyday shopping. It won't take long for the UK to hit this stage. The introduction of brands such as Relentless and Lucozade has really moved it along. The sub-category is being taken more seriously now."

Onslow believes that the next six months will be interesting for the numerous brands of the energy shots sector. "I think retailers will favour UK companies rather than those from the USA. If a retailer wants a certain type of display unit it's going to be easier for a UK company to adapt existing units to suit. Availability will also be a factor a UK company can supply a UK retailer quickly. With a US supplier there is potential for delay due to having the product shipped over."

Arnold predicts that the market will thin out over the next 12 months. "A lot of people have jumped on the bandwagon and the market will be pared back to just five or six core brands over the next year," he says. "I believe that those manufacturers that can establish a point of difference and create some brand loyalty will be those that will survive."