Business is booming in the energy drink business, with manufacturers eagerly tapping into the latest trend - natural alternatives to appeal to health-conscious millennials.
According to Euromonitor international, global sales of energy drinks hit €38.2 billion in 2015 and are predicted to reach €53.4 billion by 2020.
The report states that the United States is by far the biggest energy drink consumption market, worth approximately €12.4 billion. This is followed by Asia-Pacific at a value of €10.1 billion and Western Europe at €7.3billion.
While ‘energy’ drinks will always have a place in the market, especially with big players such as Red Bull, Monster and V Energy Drinks dominating sales, there has been a definite shift toward flavour innovations, purer ingredients, more functionality benefits, and a growing demand for sugar-free, low-calorie options.
Howard Telfod, senior beverage analysis at Euromonitor International told Beverage Daily that big brands are effectively targetting the millennial market.
“The rise of energy drinks over the past decade has come from the ability of the category to successfully meet that functional demand for energy, and through the targeted way that leading energy brands - Red Bull and Monster - have positioned themselves as lifestyle beverages for millennials,” he said.
Telford further predicts that “the continued success of the category is going to be contingent on how well it adjusts to other products- water, juice, tea – entering their territory through enhanced, functional launches.”
Indeed there has been widespread innovation with regards to ‘energy drinks’ meeting functional requirements for healthier consumers. Below are four key examples of how companies have strongly shifted towards health.
Healthier alternatives for healthier consumers
It’s not just energy drinks that are rising in popularity, but sports drinks too.
“Many consumers perceive sports drinks as healthier than sodas and other carbonated beverages due to their association with sports and physical activity in general,” said David Sprinkle, research director for Packaged Facts told Food Business News.
Recently, Adelaide’s Flinders University even launched a new sports drink, PREP’D, which is aiming for a share of the $17 billion global sports drink market, preparing to launch its game changing, low-sugar product early next year following 20 years of research.
PREP’D has been devised by gastrointestinal health expert Professor Graeme Young, along with Professor Ian Brown and collaborators from the US and India to ensure optimal hydration and other benefits.
“PREP’D uses resistant starch to increase the body’s hydration potential by up to 30%, allowing athletes to perform at their peak for longer,” David Vincent, Manager of Flinders Partners told The Advertiser.
“In an earlier clinical trial with the Adelaide Crows, PREP’D showed significantly better overall hydration compared with sports drinks and water.”
Source: Flinders University.
Sounds cool right? Did you also notice a little orange bottle called Shine+ popping up on social media lately?
Australian's first "smart drink"
The Aussie company behind shine+ says it's created the country's "first smart drink" - formulated to enhance mental function and productivity.
In 2015, when results of a number of studies were released that showed certain ingredients and compounds can increase mental function, Dr Sam Prince and Stephen Chapman began developing Australia's first drink designed to enhance brain function.
The drink contains a number of natural ingredients known as ‘nootropics’, including Ginkgo Biloba, Green Tea Extract (with L-Theanine), Caffeine, Turmeric and other ingredients known to support mental function such as Siberian Ginseng and Vitamins B6 and B12.
Unlike other generic energy, sports or caffeinated beverages, shine+ ingredients supposedly allow people to avoid the well-known ‘caffeine crash’ and maintain a prolonged, clean focus instead.
The company’s Instagram is especially tapping into health conscious millenialls, with 32 thousand followers and many social media ‘influencers’ marketing the product.
Source: Instagram @shinedrink. Keira (@krumble) has been a long-term #ShiningStar of ours. As a busy professional, she knows the value of having a secret weapon that keeps you going and does good by you. Keep #shining Keira ?
Chapman told Australian Ant Hill that “A lack of innovation in the local beverage sector meant the space was ripe for something entirely new like focus drinks. We can’t beat the Cokes and Red Bulls of the world at their own game, so we’ve had to reshape the game entirely.”
Pure ingedients the new buzz word
Popular energy drink ‘V’, owned by Frucor Suntory, is poised to launch a new, healthier alternative: ‘V pure’.
The follows the successful release of the product in New Zealand in May 2016.
CEO Jonathan Moss says consumers are thinking differently about beverages, and shifting away from the traditional Carbonated Soft Drink category.
“What we’re seeing is that total overall beverage consumption is quite stable, but we’re certainly seeing a macro trend as people, on a long term basis, shift away from carbonated soft drinks to other categories,” he told C&I.
“The other categories tend to be less sugar, or functional products [like energy drinks].”
Moss explained that the upcoming ‘V Pure’ will target consumers seeking an all-natural alternative to the original beverage with the beverage said to only contain the simple and ‘healthier’ ingredients: apple juice, sparkling water, guarana and caffeine.
“V Pure is our natural representation of the V Energy product: It has all natural ingredients,” he said.
The official launch of V Pure is expected to come in fourth quarter this year, although samples were circling at the Australian Retail Drinks Conference this week.
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Sneak peak of V PURE.
AB InBev buys orgnanic energy drink range Hiball
The word's largest brewer, Anheuser-Busch InBev NV, has also scored a piece of the energy fizz market.
It's acquiring Hiball Inc, a San Francisco-based company that makes organic energy drinks and carbonated juices and water.
João Castro Neves, chief executive of AB InBev's U.S. subsidiary Anheuser-Busch, said this was a natural progression in the current market climate.
"We're looking for high growth, high margins. Energy drinks and sparkling water fit the bill. Hiball was a natural place to go," Neves told Market Watch.
Hiball’s products include Hiball Energy, a line of caffeinated drinks with ingredients such as guarana and ginseng, and Alta Palla, a line of sparkling juices with organic and fair-trade ingredients.
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