Isotonics and sports drinks maintain strong sales and will probably continue to do so, given consumers’ growing demands for healthful food and drink that meets the body’s needs following physical activity.
Energy-drink purchases, on the other hand, are growing exponentially across the country—leading retailers to keep seeking the best strategies for leveraging the category’s popularity.
Information Resources Inc. (IRI) executive vice president Anne Berlack said boosting consumers’ energy and providing health benefits are driving innovation in this category as well as others.
"One of the things that I think is really interesting about the beverage side of the business is how successful some of the new item launches are in c-stores," Berlack said. "There’s a tendency on the part of manufacturers to put beverages into c-stores first. They launch them as single-serve, then in grocery stores, then mainstream across the board."
Of all drink categories in the c-store channel, isotonics and energy drinks showed the strongest overall growth, and the category now appears in seventh position. ACNielsen data showed energy drinks up by 15% in c-stores, with Monster growing 35.2% and Red Bull up 15.7%.
A recent Packaged Facts report predicted that energy drinks will grow annually at 12% with sales that will top $9 billion by 2011, a phenomenal 650% increase from the category’s $1.2 billion in sales in 2002.
In fact, energy drinks have become so popular that even Starbucks is bringing one to market. The first new beverage platform represents Starbucks’ entry into the energy beverage category, which is a multi-billion dollar market segment, CEO Howard Schultz wrote in a note to his partners.
Labelled +Energy, the new drink can be added to any existing Starbucks handmade beverage by saying "plus energy" at the end of the beverage order. Baristas have been trained in how to mix in +Energy, which contains B-vitamins, guarana and ginseng.
"How can we put a better, healthier product in the marketplace that still maintains taste and taste satisfaction for our consumers?" Berlack asked. "It has got to be high in nutrition value, but it has also got to taste good and have good mouth feel."
One way to promote a nutritious image is by going organic. Responding to this, several manufacturers are either investigating organic components for energy drinks or already using them. For example, Guru, which manufactures 100% natural and USDA certified organic energy drinks, has introduced two new flavors: Full On Lemonade and Juicy Superfruit, both available in the producer’s new slim 12-ounce cans designed to contain more energy than the original 8-ounce size while being less filling than 16-ounce varieties.
Sports Drinks Solid
Berlack pointed out that while a product’s convenience for consumers remains important, both convenience and indulgence are giving way to growing desires for healthier and nutritionally enhanced products.
As such, Isotonics, which have been performing well in c-stores long before energy drinks were developed, remain strong in category sales. Gatorade, which continues to introduce new flavors and products like its G2 low-calorie line, held on to the top spot for memorable presentations in a recent survey of c-store retailers.
Powerade bolstered its position with the introduction of a number of new flavors in 2007 including Artic shatter, black cherry, jagged ice and mountain blast.