Energy Drinks and Shots: U.S. Market Trends

Jan 29, 2013
137 Pages - Pub ID: LA4873762
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Health and wellness-related beverage products are seeing increased consumer penetration. In sharp contrast to this classic beverages—especially colas—are seeing consumer attrition.  Functional ready-to-drink (RTD) beverages, namely energy drinks, sports drinks, and tea, have increased consumer penetration over the past few years.

While the energy drinks and shots market may be a small component of the non-alcoholic beverage industry, it is perhaps the most dynamic market. This market grew between 60% from 2008-2012 according to Packaged Facts estimates in the all-new research report Energy Drinks and Shots: U.S. Market Trends. In 2012, total U.S. sales for the energy drinks and shots market was worth over $12.5 billion.

Intense competition surrounds the beverage industry as marketers seek to increase market penetration and consumption frequency. This is accomplished through positive alignment as a healthy and/or functional beverage. Thirst quencher/sports drinks remain the most formidable competitor for energy drinks. This type of beverage attracts a large constituency of energy drink users. Additionally, energy drinks are subject to competition from other energy-boosting beverages such as coffee and tea beverages. An increasing number of new product innovations that tap into the energy trend but are outside of the beverage industry are also competitors in this area.

At present, energy drinks have the lowest consumption rates of any RTD beverage. This point reflects the market’s relative infancy and also its growth potential. Experian Simmons analysis shows the growth trend of this market, with the incidence of energy drink usage among adults rising from nearly 13% in 2006 to 17% in 2012. A modest segment of heavy users also exists:
5% of adults consume energy drinks 5-7 times per month and less than 2% drink energy drinks 10 or more times.
Consumers 18-34, men, Hispanics, Pacific region residents, and adults with children in the household are demographics that over index in energy drink usage.

Packaged Facts estimates that energy drinks account for a 78% market share, followed by 18% for energy shots, and energy drink mixes (roughly 4%) in 2012. A few select marketers dominate the energy drinks and shots market. This report demonstrates the first mover advantage in each category. The result is a market that is highly dependent on a handful of key brands, namely Red Bull, Monster Energy, 5-Hour Energy, and Rockstar Energy.

Retail distribution of energy drinks and shots continues to expand at a fervent pace. These products are accessible at nearly any retail outlet from major grocery outlets to dollar stores to smoothie shops to sporting goods outlets. Packaged Facts estimates that convenience stores hold the largest share of market sales (59%), followed by mass merchandisers (13%), supermarkets (10%), club stores/warehouse (5%), and drug stores (2%). In aggregate, all other retailers contribute a significant 11% to market sales.

Overall growth of energy drinks and shots is influenced positively by new product launches and expanded retail distribution. Economic factors and shifts in the U.S. adult population by age and ethnicity/race are also factors to market growth. An increasingly competitive market for “energy-boosting” products is perhaps the market’s greatest threat.

Packaged Facts projects sales of energy drinks and shots will grow to a value of $21.5 billion by 2017. This growth will be driven by continued economic recovery, expansion in retail distribution, and strong potential in new product development. Market opportunities are evident through product innovation (especially in energy drink mixes), the ability to increase consumption frequency, the targeting of older consumers, and leveraging interactive packaging.
Chapter 1: Executive Summary
Scope of Report
Methodology
Energy drinks still have modest consumption rates
Table 1-1 RTD Non-Alcoholic Beverage Usage, 2006-2012(percent of U.S. adults)
Innovative beverages
Healthy beverages
Customizable and portable beverages
Relaxation beverages
Innovation opportunity
Encourage more frequent consumption
Target older consumers
Interactive packaging could remedy labeling concerns and more
Industry context
Energy drinks and shots deliver impressive growth
Table 1-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions and percent change from previous-year period)
Explosive growth from 2011-2012
Mass-Market Category Performance
Figure 1-1 Percent Growth in SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (percent change from previous-year period)
Product performance: Three core energy drink brands steer category growth
Product performance: Living Essentials dominates energy shots
Product performance: Kraft Foods’ enters category with well-known brands
Convenience stores capture largest share of energy market sales
Market Innovation
“Diet” energy drinks
Proliferation of “natural” energy
Cross-pollination of energy drinks
Sales of energy drinks/shots projected to reach $21.5 billion by 2017
Table 1-3 Projected U.S. Sales of Energy Drinks and Shots, 2012-2017 (in millions of dollars and percent)
Top Marketers Dominate Energy Drink and Shot Sales
Figure 1-2 Top Marketers of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012
Energy Drink Usage
Table 1-4 Energy Drink Usage Rates, 2006-2012 (percent of U.S. adults)
Young adults are core users of energy drinks
Frequency of Energy Drink Usage
Energy drink brand usage
Table 1-5 Energy Drink Usage Frequency by Selected Brands, 2012 (U.S. adults)
Energy drink consumers strive to be youthful and health-minded
Table 1-6 Energy Drink Consumer Agreement Index for
Selected Health and Nutrition Statements, 2012 (U.S. adults)
Chapter 2: Competitive Context for Energy Drinks
Highlights
Scope
Market Definition
Methodology
Energy Drinks in RTD Beverage Context
Energy drinks still have modest consumption rates
Table 2-1 RTD Non-Alcoholic Beverage Usage, 2006-2012 (percent of U.S. adults)
Energy drinks vs. colas
Figure 2-1 Usage Rates for Energy Drinks vs. Colas, 2006 vs. 2012 (percent of U.S. adults)
Energy drinks vs. sports drinks
Figure 2-2 Usage Rates for Energy Drinks vs. Sports Drinks, 2006 vs. 2012 (percent of U.S. adults)
Figure 2-3 Consumption Frequency of Energy Drinks vs.
Sports Drinks in last 30 Days, 2012 (in percentage of users who drank each beverage in last 30 days)
Energy drinks vs. coffee/tea beverages
Figure 2-4 Starbucks, DoubleShot Energy
Figure 2-5 Usage Rates for Energy Drinks vs. RTD Coffee and Tea, 2007 vs. 2012 (percent of U.S. adults)
Figure 2-6 Napco Inc., Versanto Force 3X Hyper-Caffeinated Coffee
Table 2-2 Coffee and Tea Usage, 2006-2012 (percent of U.S. adults)
Energy Drink Users’ Consumption of Other Beverages
Energy drink users also enjoy other RTD beverages
Table 2-3 Indexes Among Energy Drink Consumers for Use of Selected Other Beverage Types, 2012 (U.S. adults)
Competitive Context: Beverage Innovation
Innovative beverages
Healthy beverages
Figure 2-7: Pinnacle Drinks, SoReal
Customizable and portable beverages
Figure 2-8: Kraft Foods, MiO Liquid Enhancers
Figure 2-9 Coca-Cola Company, Dasani Drops
Relaxation beverages
Figure 2-10 Marley’s Ventures Inc., Marley’s Mellow Mood
Market Opportunities
Innovation opportunity
Table 2-4 Usage Rates for Selected Types of Beverage Mixes, 2006-2012 (percent of U.S. adults)
Table 2-5
Index Among Energy Drink Consumers for Use of Selected Beverage Mix Types, 2012 (U.S. adults)
Encourage more frequent consumption
Target older consumers
Interactive packaging could remedy labeling concerns and more
Chapter 3: The Market
Highlights
Industry context
Table 3-1 SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (in millions and change from previous-year period)
Figure 3-1 Growth in SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2011 vs. 2012 (percent)
Market Size and Growth
Energy drinks and shots deliver impressive growth
Figure 3-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions of dollars)
Table 3-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions and percent change from previous-year period)
Market Composition
Dynamic market allows for growth across all categories
Energy drinks a $9.8 billion market
Table 3-3 Total U.S. Sales of Energy Drinks and Shots by Product Category, 2008-2012 (in millions)
Energy shots and energy drink mixes steadily increase market share
Figure 3-3 Share of Total U.S. Sales of Energy Drinks and Shots by Product Category, 2008-2012
Explosive growth from 2011-2012
Figure 3-4 Total U.S. Sales of Energy Drinks and Shots by Percent Growth, 2008-2012
Mass-Market Category Performance
Table 3-4 SymphonyIRI-Tracked Sales of Energy Drinks and Shots by
Product Category, 2012 (in millions and change from previous-year period)
Figure 3-5 Percent Growth in SymphonyIRI-Tracked Sales of Energy
Drinks and Shots, 2012 (percent change from previous-year period)
Sales performance for energy drinks
Table 3-5 Total U.S. Sales of Energy Drinks, 2008-2012 (in millions of dollars and percent)
Product performance: Three core energy drink brands steer category growth
Figure 3-6 Leading Brand Shares of SymphonyIRI-Tracked Sales of Energy Drinks , 2012
Table 3-6 SymphonyIRI-Tracked Sales of Energy Drinks by Marketer and Brand, 2012 (in thousands of dollars and percent)
Table 3-6 [cont’d.] SymphonyIRI-Tracked Sales of Energy Drinks by
Marketer and Brand, 2012 (in thousands of dollars and percent)
Sales Performance for energy shots
Table 3-7 Total U.S. Sales of Energy Shots, 2008-2012 (in millions and percent change from previous-year period)
Product performance: Living Essentials dominates energy shots
Figure 3-7 Leading Marketer Shares of SymphonyIRI-Tracked
Sales of Energy Shots, 2012
Table 3-8 SymphonyIRI-Tracked Sales of Energy Shots by
Marketer and Brand, 2012 (in thousands and percent
change from previous-year period)
Energy drink mix
Table 3-9 Total U.S. Sales of Energy Drink Mix, 2008-2012 (in millions of dollars and annual percent change)
Product performance: Kraft Foods’ enters category with well-known brands
Figure 3-8 Leading Brand Shares of SymphonyIRI Sales of
Energy Drink Mix, 2012
Table 3-10 SymphonyIRI-Tracked Sales of Energy Drink Mix by Marketer and Brand, 2012 (in thousands of dollars and change from previous-year period)
Retail Distribution
Convenience stores capture largest share of energy market sales
Retail expansion of energy drinks and shots
Figure 3-9 Share of U.S. Sales of Energy Drinks and Shots by Retail Channel, 2012 (in percent)
Table 3-11 Total U.S. Sales of Energy Drinks and Shots by Retail Channel, 2012 (in millions of dollars and percent share)
Factors to Market Growth
Market Innovation
“Diet” energy drinks
Proliferation of “natural” energy
Figure 3-10 Campbell Soup Company, V8 Energy Shots
Figure 3-11 Starbucks, Refreshers Energy Drinks
Figure 3-12 Jamba Inc., Jamba All-Natural Energy Drinks
Cross-pollination of energy drinks
Convenience store channel store growth
Table 3-12 Number of convenience stores, 2006-2012
Economic conditions
Median income
Figure 3-13 Median Household Income in Inflation-Adjusted Dollars, 2006-2011
Unemployment and underemployment
Figure 3-14 Unemployment and Underemployment Rates in the U.S., 2007-2012
Consumer confidence
Figure 3-15 Consumer Confidence Index, 2007-2012
Shifts in population of key demographics
Young adult population
Figure 3-16 U.S. Adult Population by Age, 2011
Hispanic population
Figure 3-17 U.S. Adult Population by Race/Ethnicity, 2011
Linking energy drink/shot consumption with health risk
Competitive energy products
Figure 3-18 PureBrands, Sheets Energy
Figure 3-19 Rocasuba, Inc., Spot On Energy
Figure 3-20 Spotonenergy.com Comparison Chart, November 2012
Figure 3-21 AeroDesigns Inc., AeroShot Energy
Figure 3-22 Aeroshots.com, Tedeschi Food Shops Promotion November 2012
Figure 3-23 PepsiCo Frito-Lay., Cracker Jack’D
Figure 3-24 Jelly Belly Candy Company, Sport Beans
Market Forecast
Sales of energy drinks/shots projected to reach $21.5 billion by 2017
Figure 3-25 Projected U.S. Sales of Energy Drinks and Shots, 2012-2017 (in millions of dollars)
Table 3-13 Projected U.S. Sales of Energy Drinks and Shots, 2012-2017 (in millions of dollars and percent)
Chapter 4: The Marketers
Highlights
Top Marketers Dominate Energy Drink and Shot Sales
Figure 4-1 Top Marketers of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012
Top Energy Drink and Shot Marketers by Category
Figure 4-2 Share of SymphonyIRI-Tracked Sales of Energy Drinks and Shots by Category, 2012
Red Bull and Monster Beverage continue to grow market share
Living Essential losing ground as energy shot category matures
Kraft Foods experiences strongest growth via energy drink mixes
Figure 4-3 Kraft Foods Inc, MiO Energy
High Performance Beverage performs well; Soda manufacturers’ brands falter
Table 4-1 Top Marketers and Brands of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012 (in millions of dollars and change over previous-year period)
Figure 4-4 Top Marketers of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012
Top Brands
Red Bull launches Total Zero
Name change by Monster Beverage Corp. reflects powerhouse brand
Rockstar International churns out new products that go beyond energy
Figure 4-5 Rockstar International, Rockstar Relax
Table 4-2 Top Marketers and Brands of Energy Drinks and Shots
by SymphonyIRI-Tracked Sales, 2012 (in millions of dollars and percent share)
Table 4-2 [cont’d.] Top Marketers and Brands of Energy Drinks and Shots by SymphonyIRI-Tracked Sales, 2012 (in millions of dollars and percent share)
Table 4-3 Top Brands of Energy Drinks and Shots by SymphonyIRITracked Sales, 2012 (in millions of dollars, share, and change over previous-year period)
Company Profile: Red Bull North America
Performance: Continued Growth
Sales analysis
Table 4-4 SymphonyIRI-Tracked Sales of Red Bull North America
Energy Drinks and Shots, 2012 (in thousands of dollars and percent change from previous-year period)
Volume and unit analysis
Table 4-5 SymphonyIRI-Tracked Sales of Red Bull Energy Drinks and Shots, 2011-2012 (in volume and units and percent change from previous-year period)
Brand Qualities
Figure 4-6 Red Bull, Red Bull Editions
Marketing Strategies
The Red Bull Consumer
Table 4-6 Demographic Snapshot of Red Bull Energy Drink Consumers, 2012 (U.S. adults)
Opportunities and Outlook
Company Profile: Monster Beverage Corp.
Performance: Strong Innovation
Sales analysis
Table 4-7 SymphonyIRI-Tracked Sales of Monster Beverage Corp.
Energy Drink, 2012 (in thousands of dollars and change from previous-year period)
Volume and unit analysis
Table 4-8 SymphonyIRI-Tracked Sales of Monster Energy Drinks, 2011-2012 (by volume and unit metrics and percent change from previous-year period)
Brand Qualities
Figure 4-7 Monster Beverage, Monster Energy
Marketing Strategies
The Monster Energy Consumer
Table 4-9 Demographic Snapshot of Monster Energy Drink
Consumers by Age Bracket, 2012 (U.S. adults)
Opportunities and Outlook
Company Profile: Living Essentials
Performance: Slow and Steady
Sales analysis
Figure 4-8 5-Hour Energy, Pink Lemonade
Table 4-10 SymphonyIRI-Tracked Sales of Living Essentials
Energy Shots, 2012 (in thousands of dollars and percent change from previous-year period)
Volume and unit analysis
Table 4-11 SymphonyIRI-Tracked Sales of 5-Hour Energy Shots, 2011-2012 (in volume and units and percent change from previous-year period)
Brand Qualities
Marketing Strategies
Figure 4-9 5-Hour Energy, “Why Do You Want To Walk?”
Sweepstakes
Figure 4-10 5-Hour Energy, 5-Hour Energy Work Day Marathon App
The 5-Hour Energy Consumer
Table 4-12 Demographic Snapshot of 5-Hour Energy Shot
Consumers by Age Bracket, 2012 (U.S. adults)
Opportunities and Outlook
Company Profile: Rockstar International
Performance: Solid Growth Supported by Innovation
Sales analysis
Table 4-13 SymphonyIRI-Tracked Sales of Rockstar International
Energy Drink and Shots, 2012 (in thousands of dollars and change from previous-year period)
Table 4-14 SymphonyIRI-Tracked Sales of Rockstar Energy Drinks, 2011-2012 (in volume and unit metrics and percent change)
Volume and unit analysis
Brand Qualities
Figure 4-11 Rockstar International, Rockstar Recovery
Marketing Strategies
Figure 4-12 Rockstar International, Rockstar Boat Giveaway
The Rockstar Consumer
Table 4-15 Demographic Snapshot of Rockstar Energy Drink
Consumers by Age Bracket/Generation, 2012 (U.S. adults)
Opportunities and Outlook
Competitor Briefs
PepsiCo
Table 4-16 SymphonyIRI-Tracked Sales of PepsiCo Energy Drinks, 2012 (in thousands of dollars and change from previous-year period)
Kraft Foods
Table 4-17 SymphonyIRI-Tracked Sales of Energy Drink Mixes, 2012 (in thousands of dollars and change over previous-year period
High Performance Beverage
Table 4-18 SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (in thousands of dollars and change over previous-year period)
Coca-Cola Company
Table 4-19 SymphonyIRI-Tracked Sales of Coca-Cola Company
Energy Drinks, 2012 (in thousands of dollars and change over previous-year period)
Private Label
Table 4-20 SymphonyIRI-Tracked Sales of Private Label Energy
Drink Products, 2012 (in millions of dollars and change over previous-year period)
Marketers and Brands to Watch
Figure 4-13 Top Marketers and Brands of Energy Drink Products by SymphonyIRI-Tracked Dollar Sales Growth, 2012 vs. 2011 (in millions of dollars)
Energy drink brands by dollar growth
Table 4-21 Top Energy Drink Brands by SymphonyIRI-Tracked
Dollar Sales Growth, 2012 vs. 2011 (in percent and dollar change over previous-year period)
Energy shot brands by dollar growth
Table 4-22 Top Energy Shot Brands by SymphonyIRI-Tracked
Dollar Sales Growth, 2012 vs. 2011 (in percent and dollar change over previous-year period)
Energy drink mix brands by dollar growth
Table 4-23 Top Energy Drink Mix Brands by SymphonyIRI-Tracked
Dollar Sales Growth, 2012 vs. 2011 (in percent and dollar change over previous-year period)
Chapter 5: The Consumer
Note on Experian Simmons Data
Highlights
Energy Drink Usage
Table 5-1 Energy Drink Usage Rates, 2006-2012 (percent of U.S. adults)
Young adults are core users of energy drinks
Table 5-2 Energy Drink Use by Age Bracket and Generational Cohort, 2012 (U.S. adults)
Figure 5-1 U.S. Adult Population by Age, 2011
Men more likely to consume energy drinks
Figure 5-2 Goddess Energy, Inc., Flirt Energy Drink
Table 5-3 Energy Drink Use by Gender, 2012 (U.S. adults)
Energy drinks are popular among minority race/ethnic groups
Table 5-4 Energy Drink Use by Race/Ethnicity, 2012 (U.S. adults)
Figure 5-3 U.S. Adult Population by Race/Ethnicity, 2011
Pacific region residents show uptick in energy drink consumption
Table 5-5 Energy Drink Use by Region of Residence, 2012 (U.S. adults)
Parents of young children more likely users of energy drinks
Table 5-6 Energy Drink Use by Presence and Age of Children in Household, 2012 (U.S. adults)
Figure 5-4 U.S. Adult Population by Presence of Children in Household, 2000-2010
Frequency of Energy Drink Usage
Table 5-7 Energy Drink Usage Frequency, 2006-2012 (percent of U.S. adults)
Energy drink brand usage
Figure 5-5 Hansen Natural, Monster Rehab Protean + Energy Drink
Table 5-8 Energy Drink Usage Frequency by Selected Brands, 2012 (U.S. adults)
Attitudes of the Energy Drink Consumer
Energy drink consumers strive to be youthful and health-minded
Table 5-9 Agreement Indexes Among Energy Drink Users for Selected Health and Nutrition Statements, 2012 (U.S. adults)
Energy drink users seek convenient short cuts
Table 5-10 Agreement Indexes Among Energy Drink Use for Selected Time and Convenience-Related Statements, 2012 U.S. adults)
Energy drink consumers experiment with food flavors and products
Table 5-11 Agreement Indexes Among Energy Drink Users for Selected Food Statements, 2012 (U.S. adults)
Willing to try new beverages, but may prefer alcoholic varieties
Table 5-12 Agreement Indexes Among Energy Drink Users for Selected Beverage Statements, 2012

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