Isotonics and Energy Drinks

TOP PERFORMERS
  • Red Bull
  • Monster (Hansen Beverage Co.)
  • Gatorade (PepsiCo)

HONORABLE MENTIONS

  • Powerade (Coca-Cola Co.)
  • Full Throttle (Coca-Cola Co.)

Gulf Oil General Manager Terri Murray sums this category up about as sweetly as you can.

“When energy drinks first came out, I don’t think any of us were sure what was going to happen,” Murray said. “Then, when they continued to grow, we were all in awe. Their strength in the marketplace is still impressive, but they just aren’t growing the way they used to, and it was unrealistic for anyone to expect them to increase at that rate forever.” 

The point remains, of course, that energy sales continue to grow, even if the upward slope isn’t as steep as it was just five years ago. 

“Don’t get me wrong,” Murray said. “Energy is a very big category that puts a lot of money into the bottom line.”

Data from The Nielsen Co. shows energy drink sales were up 15% last year, and they’re still expected to grow by about 12% annually for the next three years, until they become a $9 billion industry. Just seven years ago, sales in this category were at $1.2 billion.

New energy drink manufacturers are springing up each month, and some are glomming onto health-and-wellness trends by introducing blends made of natural ingredients. Brands that emerged early in this category, however, continue to be market leaders, including the No. 1 selling Red Bull, which holds 42% market share.  

Isotonics manufacturers are also keeping pace with consumers who are seeking added benefits in their beverages. Gatorade enhanced its brand lineup not just with new packaging, but blends that promote specific health benefits. “Gatorade Shine On” has more vitamin C, for instance, while “Gatorade Bring It” offers more B vitamins to help metabolize energy.

There’s plenty of competition in this category, too, as suppliers are working diligently with retailers to introduce new programs and promotions.

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.”

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.

Of 95 key decision makers from 95 chains that participated in Isotonics/Energy Drinks portion of the 2009 CSD Brand Preference Study, 53% said they were contacted by five or more suppliers in the past 60 days. Roughly one in five retailers said they haven’t been contacted by any of the 12 isotonics or energy-drink companies in that period. 

Retailers identified Red Bull, Monster (Hansen Beverage Co.) and Gatorade (PepsiCo) as top performers, while Powerade (Coca-Cola Co.) and Full Throttle (Coca-Cola Co.) were given honorable mentions.

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