Energy and sports drinks have been the driving forces behind the soft drinks sector and their success shows little sign of slowing down.
The energy sub-category saw 12% growth in 2008 and became the third largest sub-category when it comes to value in the soft drinks market. The biggest gains in this sub-category came from Relentless, which saw 110% growth compared with 2007, and Red Bull, which had 7% growth. Lucozade Energy remained the market leader and its sales grew by 4% to £228m during this period.
The sports drinks sub-category showed growth for the third year in a row. After an average increase of 22% a year for 2006 and 2007, the sub-category saw a rise of 7% in 2008. While this is not as high as previous years, it’s enough to make it the second fastest-growing sub-category in soft drinks in 2008. Products that saw growth in this sector were Powerade, which grew by 15%, and Lucozade Sport, which saw a 5% growth.
Lucozade senior brand manager Danielle Blanchard says that people are looking for sports and energy drinks that do more that just refresh them. “Functional drinks such as Lucozade Energy are popular because people want to get something extra,” she says.
Red Bull communications manager Tom Smith is of the same opinion. “People want functional drinks that offer energy as well as hydration,” he says.
Even though the energy category has grown massively, Smith believes that there is room for further expansion. “There is still opportunity for the category to grow, leading to better returns for retailers,” he says. “Availability is key to driving sales - retailers should have a full selection available, especially in the chillers.”
Dave McNulty, head of energy at Coca-Cola Enterprises, says the impulse market for energy drinks can be profitable for retailers. “Energy drinks offer a great opportunity to increase impulse sales. They’re convenient and functional - they attract consumers who have an ‘energy need’ as well as tapping into morning coffee or juice occasions. To make the most of this, retailers need to signpost the category with the best-sellers and offer shoppers a choice of flavours.”
If your customers are looking for a quick fix of immediate energy, then it could be worthwhile stocking some of the many energy shot brands that have entered the UK market in the past six months. Brands such as Focus, Target and Quick Energy are all vying for
c-store owners’ attention. In the US, sales of energy shots have grown by 400% year on year, and if the UK is to follow suit then there is plenty of potential for retailers to inject some energy into their profits.
Karen Nunn, sales and marketing director of Focus, says that the main attraction of energy shots is their convenience. She says: “We have all experienced the mid-afternoon energy dip, which research has shown is the time when we are most likely to feel tired and unfocused. Energy shots provide an ideal way to re-energise, be it at the office, in the car or just to boost you ahead of a night out.”
It’s not just shots that have seen innovation - there have been plenty of additions to the stimulants market in the past year, too. Pussy Drinks launched earlier this year and has become popular due to its natural formula, which contains no preservatives or artificial additives.
Own-brand stimulant and sports drinks are also hitting the shelves and their value prices are proving a hit in c-stores. Private label sports drinks grew 33% in value in 2008. The Euro Shopper energy drink was recently voted product of the year by readers of Convenience Store and, with a 35p price tag, it’s not hard to see why.
Landmark Wholesale is also aiming for a larger piece of the action. It has added an isotonic orange variant pricemarked at 49p to its LSV energy drink range.
With so many new brands entering the energy and sports drinks sector, can retailers expect the market leaders to suffer?
“The market has grown so much bigger over the past two years with lots of new brands available,” says Blanchard. “We believe that people will try other brands once or twice, but will come back to Lucozade Energy. The product has a very strong heritage that people know and trust.”
Meanwhile, Red Bull is maintaining its position in the energy drinks market by introducing a larger can. Smith says that this is due to consumer demand for more energy for their money. “Consumers want added value, especially in the current economic climate, so we came up with the 473ml can that caters for all of their energy needs.”
With more choice for consumers and huge sales growth recorded in 2008, the market has great potential for retailers who want to boost sales - it’s just a question of making products available on shelf.
GlaxoSmithKline (GSK), manufacturer of Lucozade, has developed a new range of sports nutrition products. It hopes to attract sports and exercise participants who want to improve their performance but currently use no specialist sports nutrition products.
According to AC Nielsen, the sports nutrition category is worth £250m and GSK believes that the market will grow by 34% over the next three years.
Backed up by an £18m marketing campaign, the range includes drinks, powders, bars, gels and tablets.
The new range is aimed at people in all stages of fitness, from complete beginner to avid athlete.
The Lucozade Sports Nutrition range is available from this month.
ones to watch…
Red Bull has unveiled its new 473ml can that it hopes will consolidate its spot at the top of the stimulation drinks market. The new-size can is designed to offer more energy at better value.
tel: 020 7434 0100
Pussy is a natural energy drink made from crushed grapes and lime juice. It contains guarana and Siberian ginseng, which Pussy believes offers a more natural energy boost.
tel: 020 8962 0759
Coca-Cola has added a new flavour to its Relentless energy drinks range. The new variant, Relentless Juiced Energy Berry, contains 50% strawberry, raspberry and blackcurrant fruit juice in a 500ml can.
tel: 08457 227 222
Gatorade has launched a blackcurrant variant that’s exclusive to the UK. Like the rest of Gatorade’s UK soft drinks the flavour contains no artificial colours, flavours, sweeteners or preservatives.
tel: 0845 758 1781
Lucozade Alert now comes in a streamlined 250ml can. GlaxoSmithKline says the move is designed to bring the product more in line with consumer perceptions of stimulation drinks.
tel: 08702 415132