After surveying the flood of energydrinks introduced over the pastfew years, Living Essentials noticeda weakness in the category. Themajority of drinks continued to grow in packagesize and contained too much sugarand herbal stimulants.
To fill the void of people looking for the sameenergy rush without consuming an enormousamount of liquid, Living Essentials introduced itscompact energy supplement, 5-Hour Energy.
Energy for the Working Adult
Since the product launched three yearsago, 5-Hour Energy has become popular withconsumers from all walks of life. Because of its small 2-oz. sizeand lack of sugar, the energy shot appeals to working adults andbusy young people.
Dennis Lane, owner of a 7-Eleven franchise store in Quimby,Mass., has stocked 5-Hour Energy for the past two years since hewas first introduced to the product at a trade show. He sees the 18-to 45-year old male demographic make up the majority of 5-HourEnergy customers. The remaining 25% of the product’s consumersare women who need an energy boost on the way home from thegym or work.
A shot of 5-Hour Energy allows people to get an energy boost withoutloading up on 20-oz. of sugar and empty calories. The productcontains only eight calories, zero carbohydrates and no sugar. Theconvenient 2-oz. size bottle is easily transported and requires no refrigeration,unlike traditional energy drinks.
The typical crash associated with energy drinks is lost when consumersswitch over to 5-Hour. The combination of vitamins, aminoacids and enzymes allows for a steady energy cycle without a caffeinerush and subsequent crash.
Many energy drinks are marketed towards a younger, moreadventurous demographic through hip music and extreme sports.Carl Sperber, marketing director for Living Essentials, realizes that5-Hour Energy is able to capture a wider audience with simple word-of-mouth and new television ads.
“Five-Hour Energy is a functional product for adults,” said Sperber.“People who work for a living and need to stay sharp and focused fora long timethose are our target consumers.”
Many of Lane’s employees at his 7-Eleven location use 5-HourEnergy themselves and are knowledgeable about the product. If curiousconsumers have questions, Lane makes sure his staff can pushthe product and vouch for its quality.
“We communicate with our customers and are educated aboutall of our products,” said Lane. “When someone asks if 5-Hour reallyworks, we can give them accurate, personal information. That’s a bigplus to selling more product.”
Stacking up the Sales
Theoretically, 5-Hour Energy is categorized as an energy supplementbut can be merchandised in a number of different ways. Sinceany liquids under 8-oz. cannot be considered a beverage by NielsenMedia Research, 5-Hour is able to be cross-marketed across multiplecategories, which helps the product’s exposure in c-stores. Forexample, some retailers stock 5-Hour in the health and diet sets, whileothers choose to put the product on the front counter to encourageimpulse purchases.
“We display the boxes right next to the registers,” saidLane. “People pick it up and are curious about theproduct. I move 60 to 70 bottles a week with thatdisplay technique.”
While new products are constantly fightingfor prime space at the front counter,5-Hour Energy arrives packaged six bottlesto a box that measures about6-square inches. The compact sizeand self-displaying lid allows retailersto stack the boxes on top ofeach other to minimize counterspace used.
Lane stocks both the Berryand Lemon-Line flavors onhis counter, and sees excellentmargins on each unitsoldmaking more thana dollar a bottle.
“I ordered 18 boxeswhen I was first introducedto 5-Hour,”said Lane. “Mysupply sold outin two days. Weliterally can’tkeep the productin stock.”