Functional and Natural Ready-to-Drink Beverages in the U.S.: Energy Drinks, Sports Drinks, Functional Waters, RTD Tea and Coffee, Yogurt Drinks and Smoothies

May 1, 2011
242 Pages - Pub ID: LA2806017
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Packaged Facts’ Functional and Natural RTD Beverages in the U.S.: Energy Drinks, Sports Drinks, Functional Waters, RTD Tea and Coffee, Yogurt Drinks and Smoothies offers a comprehensive look at the $23 billion market for single-serve, ready-to-drink (RTD) beverages across three categories and several competing product segments: (1) energy drinks/shots, sports drinks, and nutrient-enhanced waters, in itself a $15 billion category; (2) RTD tea and coffee, and (3) refrigerated yogurt drinks and juice/fruit smoothies. A 7% aggregate compound annual growth rate for these products over the most recent five-year period is a testament to the strength of the market before 2007 and since 2010. In the recessionary years of 2008 and 2009, most of these product segments flat-lined in sales growth, in keeping with the overall sales slump in foods and beverages as well as in the U.S. consumer economy overall. By 2010, nonetheless, energy/sports drinks and RTD tea/coffee showed renewed dynamism, signaling the onset of a new cycle of sales growth for these convenience, refreshment and re-charge beverages. However controversial some energy drinks may be, this lively product segment continues to call the shots in the market, accounting for 44% of the total product introductions in 2010. Many new product introductions in rival “pick up, pick me up” beverage segments are clearly marching to the beat of energy drinks or energy shots, and the newest product segment in this market, nutrient-enhanced waters, competes as a lighter re-mix of energy/sports drinks.

Functional and Natural RTD Beverages in the U.S. examines sales and trends across the retail spectrum, using proprietary primary data from Packaged Facts' March 2011 food shoppers Insights survey as well as retail sales-tracking data from Information Resources, Inc. InfoScan Review for mass channels and SPINSscan Review for the natural channel. This report tabulates market composition by product category and retail channel, as well as marketer/brand shares within and across product segments. The analysis pays special attention to cross-category trends in new product development, drawing on comprehensive new product data from Datamonitor’s Product Launch Analytics database, and analyzes consumer usage (including demographic and psychographic context) based on current and five-year-trended Experian Simmons national consumer survey data.


Additional Information

Market Insights: A Selection From The Report


Convenience Stores Claim Half of Category

Convenience stores are the leading channel for the energy drinks, sports drinks, and functional waters category, according to Packaged Facts estimates, accounting for half (50%) of overall sales. Supermarkets and mass merchandisers/supercenters follow with about 19% of sales each. [Figure 1-3]

A Boost from Antioxidants

Antioxidants have a reputation of protecting against cellular damage and a variety of ailments as well as promoting bodily defenses against aging. Antioxidant ingredients are present in numerous products in the market, and tea especially is naturally high in antioxidants. In a Packaged Facts 2011 online survey of consumers who had shopped for groceries within the last 24 hours, 8% indicated that they had purchased grocery products with high antioxidant claims, making high antioxidants a top ten consumer nutritional concern, and one that consumers either purchase more avidly or remember more vividly than the traditional high vitamin/mineral claim, checked off by 6% of grocery shoppers. Obviously, this strong level of consumer interest this is a plus for the RTD beverage market. [Figure 2-3]

Functional Water: Like Water, Only Better

Traditional bottled water did not weather the recession unscathed, but another type of water beverage has taken off despite the economic conditions. Functional water gives consumers a reason to buy water again, providing benefits that they can't get out of the tap. While many functional waters provide flavor enhancement, their main value-added benefit is health-oriented. The segment is characterized by the addition of strategic ingredients or claims of nutraceutical benefits. Varieties include vitamin additives, energy boosters or calming ingredients. Although there are plenty of "enhanced" waters and"infused" waters available, Packaged Facts defines this segment as bottled water products that are marketed on the basis of some added health benefit or promise a "function" beyond simple hydration or flavor. Functional waters are typically lighter alternatives to products in the energy or sports beverage segments, although they may contain similar ingredients.

In the News

Energy Drinks Provide Jolt to U.S. Market for Functional and Natural Ready-to-Drink Beverages

New York, May 3, 2011 — Energy drinks - the “bad boys” of the beverage world - have become a driving force behind a resurgence in the beverage market, according to market research publisher Packaged Facts. Sales of energy drinks—along with the performance of ready-to-drink (RTD) teas and sports drinks—have helped functional and natural RTD beverage market grow to $23 billion.

Packaged Facts’ Functional and Natural Ready-to-Drink Beverages in the U.S. reveals that the sales growth of energy drinks isn’t conjured up by counterculture or cool-hunting marketing, but instead is due to offering consumers a distinctive benefit that they want and need (i.e., more energy). The reality is that energy drinks are uniquely and provably delivering that benefit, and are at times delivering it with ingredients other than common caffeine and sugar.

“Energy drinks have been the focus of much industry discussion in recent years. That’s partly because of the controversy surrounding energy drink formulations as a result of the bad boy image deliberately and very profitably cultivated by Red Bull, and then by me-too energy drink marketers in its wake in an effort to capture the attention of a youthful target market that is moving into prime consumption years,” says Don Montuori, publisher of Packaged Facts. “Mostly, however, the attention to the energy drink segment is because of the sales growth energy drinks and energy shots continue to deliver.”

During the height of the recession between 2008 and 2009, the three functional and natural RTD beverage categories covered by the report—energy drinks, sports drinks, and functional waters; ready-to-drink tea and coffee; and yogurt drinks and smoothies—flat-lined in sales growth, keeping with an overall slump in the beverage market due to the stagnant economy and reduced consumer spending. Nevertheless, by 2010 energy drinks/shots, sports drinks, RTD teas, and fruit/vegetable smoothies all showed renewed dynamism, signaling the onset of a new cycle of sales growth for the market. All had gains of at least 5%, with energy drinks/shots experiencing the highest gain at 10%. Sports drinks and RTD teas finished with gains of 8% and 7%, respectively. Lastly, fruit/vegetable smoothies had gains of 5%.

Packaged Facts estimates that aggregate retail sales of the three functional and natural categories exceeded $23 billion in 2010, up from $19 billion in 2006, for a compound annual growth rate (CAGR) of almost 6%, the intervening recession notwithstanding.

Functional and Natural Ready-to-Drink Beverages in the U.S. offers a comprehensive look at the market for single-serve, ready-to-drink (RTD) beverages across three categories and several competing product segments. The report examines sales and trends across the retail spectrum, using proprietary primary data from Packaged Facts' March 2011 food shoppers Insights survey as well as retail sales-tracking data from Information Resources, Inc. InfoScan Review for mass channels and SPINSscan Review for the natural channel.

About Packaged Facts - Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products. Packaged Facts also offers a full range of custom research services.

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