EXAMPLE OF RAW MARKET RESEARCH MATERIAL -
This is an example of research performed for a business who wanted to launch an energy drink within the US market.
Leading energy drink brands in the United States in 2016, based on sales (in million U.S. dollars)
This ranking shows the leading energy drink brands in the United States in 2016, based on sales. In that year, the leading energy drink brand in the United States was Red Bull, based on generated sales of about three billion U.S. dollars.
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Leading 5 energy drink brands worldwide in 2016, based on sales (in billion U.S. dollars)*
This ranking shows the leading energy drink brands worldwide in 2016, based on sales. In that year, Red Bull continued to be the category leader with a massive lead over its competitors. The brand generated sales amounting to 10.9 billion U.S. dollars.
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Dollar sales of energy drink beverages and shots in the United States from 2011 to 2016 (in billion U.S. dollars)
Sales of energy drink beverages and shots in the United States in 2011 and provides a forecast for 2012 to 2016. In 2011, dollar sales of energy drink beverages and shots in the United States amounted to about 8.1 billion US dollars. According to research company Mintel, it is estimated that category sales will increase to 13.5 billion US dollars by 2016.
Bright Future for Energy Drinks in U.S.
The energy-drink market in the United States will continue its double-digit growth trend for at least another four years, according to a new report by British market-research company Technavio.
The beverage category "is expected to grow at a CAGR of almost 12% from 2015-2019," according to the report.
The report--Energy Drinks Market in the U.S.--identifies primary market growth drivers as changing consumer lifestyles and rising public awareness of energy drinks. It identifies market challenges as stringent government regulations and health concerns. And market trends include a growing demand for healthier ingredients and the introduction of energy drinks with natural ingredients.
“Innovations in energy drinks have a direct impact on the consumption pattern of consumers, as consumers are seeking new, efficient drinks which are more suitable to their needs and lifestyles," said Faisal Ghaus, vice president of Technavio. "Additionally, health-conscious Americans are opting for low- or no-calorie energy drinks.
“Manufacturers are introducing energy drinks like Scheckter's organic energy, which is a 100% organic energy drink and contains natural ingredients,” he added.
Technavio’s report analyzes the solutions and products offered by market vendors and presents a comprehensive breakdown in terms of market segmentation for different products, including canned/PET bottled energy drinks, energy shots and energy drink mixes.
Top Selling Energy Drink Brands In U.S
The energy drink market continues to grow even in light of the tough economy and increased health scrutiny. Soda sales have been declining steadily over the same period, while energy drink sales have been booming.
Despite recent FDA scrutiny regarding the safety of these beverages, 2013 energy drink sales are up 6.7% over last year in the USA alone. src.
Did your favorite energy drink make the list?
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Energy Drink Brand Market Share
Growth and Trends in Energy Drink MarketIn U.S
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Strong growth In US energy drink market
Based on a recent survey, global research firm Mintel expects the US energy drink market to grow by an estimated 52% from 2014 to 2019. As we discussed previously in this series, older Millennials and US parents are key energy drink consumers. Mintel expects the energy drink market to touch $10.8 billion in 2015.
The US energy drink and shots market grew by 56% between 2009 and 2014, even though the category was entangled in litigation and had negative publicity in 2013. Monster Beverage (MNST) and Red Bull were under fire in 2013 for marketing their products to children, despite concerns about the perceived health implications like seizures caused by the energy drinks’ high caffeine content.
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Growth in US energy drink volumes
According to Beverage Marketing Corporation, volumes of US energy drinks rose by 6.4% in 2014—compared to 5.5% in 2013 and 14.3% in 2012. The rapid growth in this category is attracting new players. In 2015, leading direct selling company Amway acquired the XS Energy drinks brand.
With the completion of its strategic partnership with Coca-Cola (KO), Monster Beverage is now better positioned to capture international growth opportunities and fight its closest rival Red Bull. PepsiCo (PEP) is also expanding its energy drink portfolio under the Mountain Dew Kickstart and AMP Energy drink brands.
Together, Coca-Cola, PepsiCo, and Monster Beverage account for over 1.7% and 14.8% of the portfolio holdings of the iShares Core S&P 500 ETF (IVV) and the Consumer Staples Select Sector SPDR Fund (XLP), respectively.
Weakness in the energy shots category
Energy shots are concentrated forms of energy drinks. They account for 11% of the market share, while energy drinks hold 89% of the US market share. According to Mintel’s survey, Millennials and parents have consumed less energy shots. Energy shots sales are expected to fall in 2015. This is the third straight year with a fall in the category.
Energy Drinks and Shots: U.S. Market Trends
Health and wellness-related beverage products are seeing increased consumer penetration. In sharp contrast to this classic beverages—especially colas—are seeing consumer attrition. Functional ready-to-drink (RTD) beverages, namely energy drinks, sports drinks, and tea, have increased consumer penetration over the past few years.
While the energy drinks and shots market may be a small component of the non-alcoholic beverage industry, it is perhaps the most dynamic market. This market grew between 60% from 2008-2012 according to Packaged Facts estimates in the all-new research report Energy Drinks and Shots: U.S. Market Trends. In 2012, total U.S. sales for the energy drinks and shots market was worth over $12.5 billion.
Intense competition surrounds the beverage industry as marketers seek to increase market penetration and consumption frequency. This is accomplished through positive alignment as a healthy and/or functional beverage. Thirst quencher/sports drinks remain the most formidable competitor for energy drinks. This type of beverage attracts a large constituency of energy drink users. Additionally, energy drinks are subject to competition from other energy-boosting beverages such as coffee and tea beverages. An increasing number of new product innovations that tap into the energy trend but are outside of the beverage industry are also competitors in this area.
At present, energy drinks have the lowest consumption rates of any RTD beverage. This point reflects the market’s relative infancy and also its growth potential. Experian Simmons analysis shows the growth trend of this market, with the incidence of energy drink usage among adults rising from nearly 13% in 2006 to 17% in 2012. A modest segment of heavy users also exists:
5% of adults consume energy drinks 5-7 times per month and less than 2% drink energy drinks 10 or more times.
Consumers 18-34, men, Hispanics, Pacific region residents, and adults with children in the household are demographics that over index in energy drink usage.
Packaged Facts estimates that energy drinks account for a 78% market share, followed by 18% for energy shots, and energy drink mixes (roughly 4%) in 2012. A few select marketers dominate the energy drinks and shots market. This report demonstrates the first mover advantage in each category. The result is a market that is highly dependent on a handful of key brands, namely Red Bull, Monster Energy, 5-Hour Energy, and Rockstar Energy.
Retail distribution of energy drinks and shots continues to expand at a fervent pace. These products are accessible at nearly any retail outlet from major grocery outlets to dollar stores to smoothie shops to sporting goods outlets. Packaged Facts estimates that convenience stores hold the largest share of market sales (59%), followed by mass merchandisers (13%), supermarkets (10%), club stores/warehouse (5%), and drug stores (2%). In aggregate, all other retailers contribute a significant 11% to market sales.
Overall growth of energy drinks and shots is influenced positively by new product launches and expanded retail distribution. Economic factors and shifts in the U.S. adult population by age and ethnicity/race are also factors to market growth. An increasingly competitive market for “energy-boosting” products is perhaps the market’s greatest threat.
Packaged Facts projects sales of energy drinks and shots will grow to a value of $21.5 billion by 2017. This growth will be driven by continued economic recovery, expansion in retail distribution, and strong potential in new product development. Market opportunities are evident through product innovation (especially in energy drink mixes), the ability to increase consumption frequency, the targeting of older consumers, and leveraging interactive packaging.
Energy Drinks Are Still Going Strong In U.S
Scanning the shelves today, it’s hard to imagine that there was once a time when energy drinks were not part of the beverage landscape. But while the energy drinks market gained traction early on in Japan and in other parts of Asia, it was only at the dawn of this century when energy drinks really began commanding the attention of the U.S. mainstream soft drinks market. Heavy promotion and expansion by the pioneering Red Bull brand during the decade that followed brought the concept of energy drinks to Western markets for the first time, initially to Europe and then to North America. Fast-forward, and today energy drinks are firmly established within the food and beverage culture.
In the late 1990s, U.S. energy products were most commonly found in the isotonic/sports drinks market. As this category grew stronger, energy drinks emerged as their own, separate standalone category, driven as much by a trendy image as consumers’ desire to boost their energy levels amidst increasingly busy lifestyles.
Current market-size estimates vary depending on the source and how one defines the category, but generally the global energy drinks market is projected to be worth approximately $10 billion annually. Energy drinks have continued to exhibit good growth rates in recent years, even against the backdrop of an overall relatively static soft drinks market.
As of this March, energy drinks accounted for 6.2% of the total U.S. soft drink launches Innova Market Insights recorded. Energy drinks are now growing at a faster rate than the global soft drinks market as a whole, where annual growth is at just under 4%. Red Bull, Monster, and Rockstar are still the leaders. Most of their products are non-aseptic and primarily canned drinks.
New Moves by Market Leaders
Red Bull still leads the energy drinks market both in the U.S. and globally, but critics have questioned the brand’s relatively limited portfolio. With this in mind, Red Bull began expanding its product range in recent years with new launches such as Red Bull Total Zero in 2012, featuring no calories, sugar, or carbohydrates.
Red Bull is also using limited editions to keep consumers engaged. The company introduced Summer Edition Tropical last summer and has since renamed the product Red Bull: The Yellow Edition; in spring 2015, the company made it a permanent brand offering. The drink joined the brand’s already existing Red Bull Red (cranberry) and Red Bull Blue (blueberry). At the same time, Red Bull added Orange and Cherry Editions under the Red Bull Total Zero umbrella.
Red Bull rival Monster Energy launched a Monster Energy Zero edition in the United States in 2012. Marketed as less sweet, lighter tasting, zero-sugar, and zero-calorie, the drink is sweetened with erythritol, sucralose, and acesulfame-K. It joined other “light” versions of Monster, including Monster Energy Lo Carb and Monster Energy Absolutely Zero.
The Monster brand also moved closer to the sports drinks market in recent years, extending its range with performance lines such as Monster Rehab for refreshment, rehydration, and revitalization, and Muscle Monster Energy Shakes with protein. Monster Rehab is based on tea flavors, and Monster also has a Java Monster range of “coffee plus” drinks.
Organic Picks Up
The energy drinks market continues to explore new flavors, formats, and functions, and high levels of competition are resulting in growing segmentation. Marketers are also now focusing on additional benefits such as hydration, endurance, mental focus, immune support, and protein content, bringing the sector more in line with the general health and wellness category.
Marketers should also note ongoing activity in organic energy drinks—most notably by the number-three player in the energy drinks market, Rockstar, which launched the Rockstar Organic Island Fruits drink in 2014 featuring organic sugar and caffeine from organic green coffee beans. More specialized introductions include Mamma Chia’s Chia Vitality energy drinks with chia seeds, guayusa, and fruit juices; Natural Motive’s EnerBee with honey, bee pollen, and royal jelly; and Marquis O3 from Marquis Beverages.
Chia, meet guayusa: Mamma Chia’s Chia Energy beverage line launched last summer.
We are also seeing hybrid soft drinks in other beverage categories now adding an energy element. Take Celsius’s Sparkling carbonated drinks, which include cola, orange, and wild berry. The drinks are marketed not only as “negative-calorie drinks” with ingredients to “increase fat loss, boost energy, and burn more calories,” but also as delivering “lasting energy.”
Launched in June 2005, Celsius is sold as a “negative-calorie” drink with thermogenic properties.
There is also activity in caffeinated waters, both plain and flavored. Avitae, for example, extended its original line of unflavored natural caffeine waters made with purified water, caffeine from natural green coffee beans, natural flavors, and citric acid. The brand launched a range of four flavored drinks in its Caffeine + Water range early this year.
Meanwhile, Rockstar launched an horchata line in 2014 as a traditional-style, cinnamon-flavored dairy beverage. Another interesting launch last year was Sunny Delight’s SunnyD X range, which leverages the established Sunny D juice drinks brand while positioning the new products as alternative energy drinks for teens. The drink delivers energy from a combination of vitamins and carbohydrates rather than more usual ingredients like caffeine and taurine.
Each Avitae drink provides 90 mg of caffeine, roughly the same amount provided by a cup of coffee.
Market Going Strong
Increasingly busy lifestyles are boosting demand for products that give consumers either an instant boost or sustained energy. Now firmly entrenched in the mainstream, energy drinks are opening up whole new areas of opportunity as they focus on increasing their spectrum of consumers and usage occasions and offering a variety of innovative, healthier, and convenient options targeted at modern lifestyles.
Energy Drinks Could Be The Growth Driver For Coca-Cola In The Domestic Market
Since early last year, shares of the beverage giant The Coca-Cola Company have fallen around 3.5%, hurt by poor performance in the core carbonated soft drinks category. Although global volumes for Coca-Cola rose 2% in the first quarter, this result mainly reflected the 8% growth in still beverage volumes. CSDs, which formed almost three-fourths of the net volumes in 2013, continue to suffer negative consumer perception owing to health and wellness concerns regarding high calorie content. Domestic soda volumes declined by 3.2% last year, but still form the largest category of the U.S. liquid refreshment beverage market. While CSDs constitute around 43% of the overall market, energy drinks represent just over 2% by our estimates. However, energy drinks have outpaced the growth in carbonates in the last few years, and present a solid opportunity for beverage manufacturers to extract further growth from.
CSD makers such as C0ca-Cola, PepsiCo and Dr Pepper Snapple already compete in this budding segment but face stiff competition from major energy drink companies such asRed Bull and Monster Beverage MNST +0.21% Corp., which together form over 80% of domestic energy drink volumes by our estimates. With sugary sodas and their diet variants in free fall, energy drinks could be a crucial growth driver for beverage companies in the next few years. Coca-Cola in particular might be relatively better placed in the energy drinks sector going forward, as compared to PepsiCo PEP +0.05% or Dr. Pepper.
We estimate a $40.99 price for Coca-Cola, which is roughly in line with the current market price.
Energy Drinks Take Away Shelf Space From CSDs
Dollar sales for energy drinks grew almost 6% to $6.67 billion in measured channels in 2013, which propelled sales growth for convenience stores (C-stores) despite lukewarm sales for CSDs. A surprising trend in the last few years has been the surge in sales of these caffeine-fueled drinks amid looming health concerns that have contracted sales of sugary sodas.
Energy drinks have managed to grow due to attractive packaging, product innovation and by targeting millennial customers. Growing popularity of energy drinks has even prompted C-stores to increase shelf space allotted to this category from around 20% presently. According to a survey conducted by Wells Fargo, retailers plan to expand shelf space for energy drinks to over 30% in the near term, taking away space from ailing diet CSDs.
Energy drinks have not only been outperforming the U.S. LRB market sales-wise, but also carry fatter margins. Compared to around 30% margins for CSDs, margins for energy drinks are around 40%, primarily due to higher pricing. This acts as an added incentive for retailers to promote energy drinks over other beverages and provide larger shelf space to this category.
Coca-Cola’s Energy Drinks Fare Well In The U.S.
As compared to PepsiCo’s 11.5% and Dr. Pepper’s 28% unit sales decline in energy drinks in the fiscal year ended April, Coca-Cola witnessed an almost 14% volume growth. In fact, Coca-Cola’s energy drink portfolio consisting of NOS and Full Throttle grew more than every other brand in this category during this period. Retail sales for NOS rose nearly 7% in the U.S. in 2013 to $243 million, selling less than only Red Bull and Monster in the domestic market. However, both Red Bull and Monster dwarf sales of Coca-Cola’s energy drink portfolio at present. These two companies together generated almost $4 billion in dollar sales last year. But the positive for Coca-Cola here is its distribution deal with Monster, adding to its reach and presence in the budding energy drink segment.
Monster Volumes Could Be Crucial For Coca-Cola’s Growth
Around half of Monster’s beverages, mainly Monster Energy, are distributed in certain U.S. and Canadian territories by Coca-Cola. In addition, Coca-Cola’s bottlers also distribute Monster Beverages in some international markets. According to Stifel, the Coca-Coca-Monster partnership will constitute 3% of Coca-Cola’s net operating profits and roughly 13% of the company’s North American operating profits in 2015. Coca-Cola had considered acquiring Monster in early 2012, but eventually dropped the deal in April. Monster’s market value has grown over three times since 2010 to reach ~$11.1 billion presently. According to Bloomberg, the company’s sales are expected to swell by 53% through 2017, beating every other beverage company in the U.S. valued at above $50 million. Given the already established Coca-Cola-Monster relationship, acquiring the energy drinks company could further boost Coca-Cola’s top line.
As part of its 2020 vision, Coca-Cola aims to double its revenues from 2010 levels. However, in the last couple of years, category headwinds and structural changes have allowed only a 1% growth in its sales between 2011 and 2013. Monster generated over $2.2 billion in sales in 2013, up 9% year-over-year. A possible acquisition would not only boost Coca-Cola’s top line but also give the company a strong foothold in the fast growing energy drinks segment. In the last twenty years, Coca-Cola has spent around $29 billion on acquisitions, trailing PepsiCo’s $45.4 billion spend.
The beverage giant could in fact lose its present deal with Monster if the energy drinks maker is bought out by another beverage company. A possibility could be Anheuser-Busch, which also has a distribution deal with Monster in Brazil. Coca-Cola could also look to acquire Monster due to vast international opportunities in the energy drinks segment. Around 70% of energy drink sales globally are outside the U.S., but Monster sells only 21% of its drinks in international markets. Coca-Cola’s widespread distribution channels and marketing muscle could help generate meaningful growth for Monster internationally.
Marketing To Energy Drinkers In U.S
When marketing to energy drinkers, men and women should be viewed differently. More than three-quarters of women ages 18–34 (79%) who drink energy beverages agree that companies should include recommended daily consumption limits on the packaging of their energy drinks versus 71% of men. In addition, 62% of women ages 35+ say they worry about the safety of energy drinks and shots compared to only 51% of their male counterparts.
Retail distribution In Energy drink market In U.S
The breakdown of U.S market sales by distribution are as follows.
1. Convenience Stores – 59%
2. Mass Merchandisers – 13%
3. Retailers – 11%
4. Supermarkets – 10%
5. Club Stores/Warehouses – 5%
6. Drug Stores – 2%
The energy drink industry is being forced to change their marketing strategies and methods due to the targeting of a younger audience that are at risk for over consumption. There have been cases in the past of teenagers dying from the effect of over consumption of energy drinks that increase their heart rate and cause them to go into cardiac arrest. An increase of emergency room visits have also brought about pressure onto the industry.
Energy Drink Brand Market Share in 2016
Red Bull – 43%
Monster – 39%
Rockstar – 10%
Amp – 3%
Nos – 3%
Full Throttle – 1%
Xyience Xenergy – 1%
Global Market share of Energy drinks
1. Red Bull – $2.76 trillion
2. Monster Energy – $1.45 trillion
3. Rockstar – $493 million
4. Nos – $244 million
5. Java Monster – $210 million
6. Monster Mega Energy – $209 million
7. Amp – $148 million
8. Rockstar Recovery – $147 million
9. Full Throttle – $97 million
Energy drinks Consumption In U.S
1. Energy drink consumption has been seeing a quick rise in recent years.
2. 5% of adults are considered heavy users consuming 5-7 times per month.
3. 2% of energy drinks are consumed by adults 10 or more times a month.
4. Consumer demographics are men between thee ages of 18 and 34.
SEE ATTACHMENT 6
What age group generally consumes these energy drinks?
Energy drinks are very popular among youth and are regularly consumed by 31% of 12- to 17-year-olds and 34% of 18- to 24-year-olds.
Do energy drinks market to children?
Yes. By their own admission, most energy drink companies market their products to children as young as 12 (sixth graders). According to the Center for Science in the Public Interest, energy drink companies define “minors” as children under the age of 12, for marketing purposes. And an internal Monster Energy marketing document dated in 2009 lists the company’s target audience as those born as late as 2000—nine-year-olds. Consider, too, the “Monster Army,” a program for 13-to-21-year-old athletes who receive sponsorship deals in exchange for representing the Monster brand.
It should come as no surprise, then, that in 2010, children saw more television ads for 5-Hour Energy than for any beverage but Capri Sun. Or that in 2011, a whopping 35% of eighth graders reported consuming an energy drink in the previous year. Or that the number of emergency room visits by 12-to-17-year-olds increased from 1,145 in 2007 to 1,499 in 2011. Some of these children—including a 14-year-old girl named Anais Fournier—died from caffeine poisoning.
In May 2013, the city attorney of San Francisco, Dennis Herrera, sued Monster Energy for targeting children in its marketing, calling it “the industry’s worst offender.”
In 2015—in response to dozens of fatalities, and echoing the American Academy of Pediatrics, the American Medical Association, and lawmakers like Dick Durbin—a consumer advocacy group called the Rudd Center for Food Policy and Obesity argued that, like tobacco, energy drinks such as Monster and Red Bull should be sold only to adults 18 and older. The Rudd Center cited a comprehensive 2013 Yale University study, “Energy drinks: An emerging public health hazard for youth,” which states:
A comprehensive analysis of marketing practices and youth exposure to this marketing in the United States confirmed that several energy drink manufacturers market their products using media and techniques aimed at adolescents.4 In 2010, US adolescents saw on average 124 television ads for energy drinks and shots, which is the equivalent of one ad every 3 days.4 This is similar to adolescents’ viewing of regular soda ads (122), and more ads for energy drinks and shots than seen by adults.4 Adolescents viewed 9–16 per cent more ads than adults for three energy drink brands.28 The majority of energy drink ads viewed by adolescents appeared on youth-targeted cable networks including Adult Swim (80–90 per cent more adolescent than adult viewers), MTV and MTV2 (88–199 per cent more adolescent viewers), and Comedy Central (20–30 per cent more adolescent viewers).
The study also noted that energy drink manufacturers frequently sponsor extreme sports events and have a robust presence on digital media—both platforms have a disproportionately strong appeal to adolescents versus adults. “As a result,” the authors note, “children in the United States saw on average 62 energy drink and shot ads in 2010, which is on par with the number of ads they saw for the children’s drinks Capri Sun and Kool-Aid.
In February 2016, Orlando-based law firm Morgan & Morgan launched an official petition at WhiteHouse.gov calling for more federal regulation of the way energy drink companies market and sell highly caffeinated beverages to minors.
HOW ENERGY-DRINK COMPANIES IN U.S PREY ON MALE INSECURITIES
The global team of athletes sponsored by Monster Energy, the caffeinated-beverage company, is a roster of super bros. Conor McGregor, of Ireland, is a densely tattooed mixed-martial-arts champion who trained in Tae Kwon Do, karate, capoeira, and kickboxing while working as a plumber, prior to turning pro in M.M.A. Tom Schaar, of Malibu, became, at the age of twelve, the first person to land a 1080-degree airborne rotation on a skateboard, and was the youngest-ever gold medalist at the X Games, ESPN’s annual extreme-sports competition.
And Josh Brookes, an Australian motorbike racer, whose job Monster describes as “ripping through the tarmac at 150 mph,” spends his downtime wakeboarding, snowboarding, and jet skiing. To convey the idea that its drinks can help any guy “unleash the beast,” Monster produces slick video compilations of dizzying stunts performed by these and other athletes. It also hosts events that feature “Monster Girls” with names like Bradi, Rhi Rhi, and Magnollia, and such personalities as the Dingo, a snowboarder-turned-emcee, and the actor Wee Man, of “Jackass” fame.
Monster isn’t the only energy-drink company to adopt this kind of approach: its primary competitors, Red Bull and Rockstar, also use male-centered marketing. The strategy has worked. Over the past two decades, as U.S. soft-drink consumption has declined—full-calorie-soda sales dropped twenty-five per cent during that period, according to a recent Times report—the energy-drink market has been thriving. The beverages are consumed regularly by thirty-one per cent of kids between the ages of twelve and seventeen, and by thirty-four per cent of those aged eighteen to twenty-four. U.S. sales for energy drinks and shots now total more than twelve and a half billion dollars—a number that the market-research firm Packaged Facts predicts will grow by another nine billion dollars by 2017.
A new study, published in the November issue of Health Psychology, suggests that appeals by energy-drink companies to the thrill-thirsty male id are coming at a psychological and physical cost, however. The researchers sought to trace a cascade effect leading from beliefs about manliness and the efficacy of energy drinks, to the consumption of those beverages, to potentially harmful sleep disturbance. They found that the more a man bought into masculine ideals, the more he believed that energy drinks made him manly—and the more he drank them, the more his sleep was troubled. (The F.D.A. doesn’t require that quantities of caffeine be listed on labels, but a Consumer Reports story from 2012 found that energy drinks and shots contain between six and two hundred and forty-two milligrams per serving. Health experts tend to regard four hundred milligrams per day as safe for most adults, and no more than a hundred milligrams as safe for adolescents.)
While the connection between unrealistic standards of beauty and low self-esteem, body dissatisfaction, and disordered eating among girls and women has been widely researched and discussed, this study is one of the few to establish a link between marketing to male insecurity and unhealthy habits. A team of researchers led by Ronald F. Levant, a professor of psychology at the University of Akron, asked four hundred and sixty-seven men between the ages of eighteen and sixty-two to fill out two questionnaires probing the degree to which they agreed with statements about traditional masculinity (“A man should prefer watching action movies to reading romantic novels”) and the benefits of energy drinks (“If I consume energy drinks, I will perform better”). They were also asked about the quantity of their energy-drink consumption and the quality of their sleep.
The study builds, in part, on a 2013 Taiwanese paper showing that college-age men used the drinks to “regulate their personal sense of masculinity” and that they will drink more of them if they perceive their masculinity to be threatened. Levant told me that energy-drink marketing operates on young men in much the same way that diet-food marketing preys on young women’s anxieties about their attractiveness. Young men, he said, “haven’t yet accrued enough of what we call ‘masculine capital’ and are anxious to prove that they are real men.” Older men weren’t as vulnerable to the messaging, likely because they’re more confident. (Men of color were also unaffected, though the results of the study were inconclusive about why. Levant suggested that it may be because they are rarely featured in energy-drink ads.)
While psychologists and health-care professionals may find the identification, among young men, of manliness with caffeinated drinks concerning, for the beverage industry it’s the equivalent of nailing a 1080. Darren Seifer, an analyst at the market-research firm N.P.D. Group, told me that when energy drinks entered the highly segmented U.S. non-alcoholic-beverage market, in the nineteen-nineties, they needed to find a niche. “There were already behemoths—soft drinks that had vast mass appeal and then their line extensions, like diet versions, which attracted specific consumers,” he said. So, companies like Red Bull and Monster tried to set themselves apart by appealing to the emotions of an impressionable demographic.
“Energy drinks needed to establish a base with a particular group and then expand from there,” Seifer said. “So the message was, ‘Hey young guys, put down those soft drinks, you want this.’ ”
Pitching caffeinated beverages to pubescent boys might seem like an obvious match, but Lisa Wade, a sociology professor at Occidental College, in Los Angeles, who writes frequently about gender issues, told me that energy-drink companies had to overcome a built-in bias in food marketing. Sugar is what Wade calls “a feminized calorie.” Women tend, in advertising, to be depicted as consumers of sweet things, like chocolate and fruity drinks, while men are more associated with red meat and savory snacks, like spicy tortilla chips. The challenge for sweet energy beverages, Wade said, “was to figure out how to man them up. So you associate them with extreme sports and extremely good performance.” (Gatorade and Mountain Dew took this approach, as well.)
Women also consume caffeinated beverages, of course, but companies play on different emotions, desires, and values when marketing to them, instead pitching more ladylike diet sodas, nutritious smoothies, and soothing hot teas. The result has been that family fridges now often contain multiple varieties of drinks, devised to reassure the demographical identity of each member.
The pervasiveness of gender-specific beverage marketing, and especially of the targeting of energy drinks to teen-age boys, contrasts with mounting resistance to the practice in industries like children’s clothing and toys, where parents have expressed concern that pink-versus-blue, princess-versus-superhero divisions reinforce sexist and homophobic stereotypes. Wade, who writes a blog called Sociological Images and maintains a Pinterest account devoted to “pointlessly gendered objects,” said that companies can sell more products if they convince consumers to divide their purchases by gender—so that, for example, husbands and wives can’t share a shampoo. Though Wade’s blog often focusses on the absurd lengths to which marketers will go—think Kleenex for Men or Bic for Her (“A ball pen essentially for women!”)—she also argues that, at a time when women and men are increasingly leading similar lives, needless reminders of gender in the items we buy are “a ubiquitous and aggressive ideological force.”
Retailers of toys and children’s clothing have begun to respond to the critiques. Target recently announced that it would be phasing out gender-based signs in the children’s section of its stores. Amazon has eliminated its gender-categorization option for toys.
And this past Halloween, the Disney Store made its costume collection gender-neutral. But in the beverage industry, the incentive to emphasize and exploit gender norms—and, more powerfully, gender anxieties—remains strong. Energy-drink producers have lately been focussing their attention on “gaming-fuel” beverages, such as Monster Energy Gaming and G Fuel, which are aimed at younger boys who play video games, and which promise to boost focus and endurance. Gamma Labs, which makes G Fuel, promotes a popular clan (or team) of professional Call of Duty players, even moving them into a house and live-streaming their activities, which include guzzling G Fuel products.
The American Academy of Pediatrics and the American Medical Association have both advocated a ban on the marketing of energy-drinks to children, citing health risks, but a Senate committee studying regulation of the industry reported earlier this year that of the sixteen companies they approached, only four said that they avoid marketing their products to children. There have been several fatalities in the U.S. related to the use of energy drinks and shots, and last year, a fourteen-year-old boy in Norway was hospitalized with kidney failure after consuming four liters of energy drinks during a sixteen-hour Call of Duty session. When consumed over a long term, Levant’s study confirmed that, in college-age men, the drinks can cause anxiety, dehydration, insomnia, and cardiovascular vascular problems. A separate study, released earlier this month by the American Heart Association, found that consuming just one sixteen-ounce energy drink elevates blood pressure and stress-hormone responses in young, healthy adults.
Levant told me that adherence to traditional ideas about masculine behavior is generally associated with negative health outcomes. “Manly” men—or men who want to appear that way—are more likely to abuse alcohol and less likely to be tested for H.I.V., for instance. Energy-drink use has become only the latest example. “There are so many men who still struggle with the belief that they are obligated to perform traditional masculinity or they’re worthless,” Levant said. “That’s the vulnerability that marketers and advertisers tap into.”
Target Group for Energy Drink: Ads and the Market
Because the energy drink is still part of a new and developing industry, the energy drink target market is different than in some of the other beverage industries. Energy drinks have become a very popular, “hip” part of society, but the market at which they are aimed is not as wide and expansive, or diverse, as some might think. Early in energy drink history, when they were first being sold in the United States, athletes were the primary consumers. This shows that even initially energy drinks were directed at a select crowd, a group of people with specific interests. Although the consumer base for energy drinks has now expanded beyond that of simply athletes, the target market is still more particular than in other industries.
Energy Drink Target Market: Who Is Buying
When thinking about the energy drink target market, it is important to consider who is most receptive to the purported effects of the beverages. Although everyone is susceptible to the fatigue of the super-charged, over-worked lifestyle, young people are especially vulnerable to persistent exhaustion and insufficient energy. This group of people, more specifically male teenagers and people in their 20s, are also most likely to believe in the veracity of the energy drinks’ claims. As a result, the majority of energy drinks are developed for and advertised to this younger generation.
In addition to focusing on a specific age group, many energy drink companies are even more exclusive in their marketing efforts, gearing their products and advertising to appeal to very specialized groups, such as gamers, extreme sports enthusiasts, and the hip-hop crowd. The effects of this emphasis on such a target market can be seen in the advertising campaigns of the energy drinks. Many of the names of the beverages, such as Crunk or GoFast!, appeal to these specific consumers and the marketing strategies that revolve around sponsoring public events or celebrity endorsements reflect this focus.
The design and packaging of many energy drinks also relates to the target market. For example, Energy Fizz, which is sold as a powder that is mixed with water to create the drink, is easy to store and carry, so it is convenient for people continually on the go. Although the energy drink industry currently caters to a very specific target market, as it continues to grow and develop, it is likely that marketing efforts and the focus consumer base will be more diverse and expansive.
In the fast-paced world we currently live in, an extra boost to your energy levels cannot be a bad thing – something that will enable you to keep up with deadlines as well as the demands of your personal life. What is the one thing you as athlete or non-athlete can use for that instant energy hype? Energy drinks, of course and if you would rather just prefer replacing lost fluids and electrolytes, why not grab a sports drink!
Most energy drinks are targeted to kids, young adults, or parents. What is surprising about the energy drink demographics, however, is that every age, ethnic group, and even religious perspective is engaging in these highly caffeinated drinks.
A 16 fluid ounce energy drink typically contains between 160 and 240 milligrams of caffeine, while the same size coffeehouse coffee contains around 300 to 330 milligrams.
Energy Drink Demographics
The issue isn’t necessarily the amount of caffeine that is being consumed, but the combination of other ingredients. Coffeehouse coffee doesn’t contain the same levels of B vitamins and other energy products that can be found in an energy drink. When vitamins are consumed in amounts that are too high, they can be just as dangerous as a drug overdose.
· 44%. That’s the percentage of active duty US military members who consume at least one energy drink per day.
· 13.9% of active duty military members consume 3 or more energy drinks every day.
· The percentage of adults who drink more than 10 energy drinks in a single month outside of the military: 2%.
· Just 5% of adults will consume 5-7 energy drinks over the course of the next 30 days.
· In the United States, more than 200 million gallons of energy drinks are consumed annually.
· On any given day in the world, 1 in 2 people are going to consume at least one sugary beverage during the day.
· 1 in 4 Americans consume at least 200 calories from drinks like energy drinks. 5% of Americans get 25% of the caloric intake from the consumption of energy drinks.
· 34% of 18 to 24-y-olds self-identify as being regular energy drink users.
· 50% of college students consume at least 1 energy drink per month in the hope to increase their energy level.
Energy drinks are generally seen as a young person’s drink and generally this is true. What isn’t necessarily documented is the fact that serving in the military increases the chances of someone in the target demographic being a heavy energy drink consumer by more than 6x that of the general population. With over 10% of active military personnel consuming 3 or more energy drinks every day, potentially consuming nearly 1g of caffeine daily depending on their energy drink of choice [Wired 344 offers 344mg of caffeine per can], the health needs of those serving should likely be addressed. Is it a cultural phenomenon that is causing them to consume high levels of these beverages? Or is it because of extended tours of duty and other service requirements?
It’s Not Just For The Younger Demographics
· The percentage increase in energy drink consumption in the over 40 age demographic in the past decade: 279%.
· Convenience is what drives energy drink sales. 59% of all sales occur at convenience stores around the world.
· Besides parents, older adults who have a Hispanic or Pacific Islander background consumer more energy drinks when compared to other demographics.
· Energy shots, have become increasingly popular among a wider range of age groups, including older adults.
Why are the older population demographics consuming more energy drinks than ever before? Part of it has to do with having children. Older adults are more likely to have children of their own and they feel like they need the caffeine in order to keep up with their charges. This may also translate into child-related careers, such as teaching. The most common reason to consume an energy drink is to make up for a lack of sleep, so older adults and those in certain ethnic demographics use them to compensate for lifestyle demands. Although the demographics of energy drink consumption may seem to be slowly changing, the fact remains that energy drinks aren’t a new player in the caffeinated world.
Energy Drinks Have Been Around for a Long Time
· Energy drink products first appeared in Europe and Asia in the 1970s. They didn’t appear in the United States until the 1990s.
· teens and young adults in the 14-21 age demographic consume, on average, approximately one-third the amount of caffeine as people over 21.
· Groups that are at risk, such as women of reproductive age and children, should limit their daily consumption of caffeine to a maximum of 300 mg.
· 1g of guarana is nearly equal to 40 mg caffeine, a common ingredient in energy drinks that is not always included in total caffeine content.
· Adverse effects associated with caffeine consumption in amounts of 400 mg or more include nervousness, irritability, sleeplessness, increased urination, abnormal heart rhythms.
· One 16 ounce energy drink contains the same levels of sugar as two regular soft drinks.
· Energy drinks also contain numerous unusual ingredients, such as glucuronlactone and inositol which may or may not contribute to the drink’s side effects.
For the most part, limited caffeine consumption is safe. Most energy drinks have, in fact, less caffeine than the average cup of coffee of the same size. What is not always taken into account, however, is the fact that coffee doesn’t always contain the same sugar content, vitamins, and other ingredients that an energy drink contains. With the exception of guarana, inositol, and yohimbine to a limited extent, insufficient data exists to determine if they are safe for human consumption. Since adults 18-34 are the primary demographic who is consuming these drinks, the results of their consumption and any long-term effects have yet to really be studied. That isn’t stopping every demographic, however, from using energy drinks as a method to increase their overall performance in some way.
Should Energy Drinks Be Consumed Before Exercise?
· The International Olympic Committee bans caffeine consumption because it is known to increase a person’s endurance.
· Research has found consumption of caffeine prior to heavy exercise to be safe.
· In adolescents, caffeine consumption has been associated with an increase in blood pressure, especially before exercise.
· 42.3%. That’s the average percentage of youth aged 11-18 who say that they regularly consume an energy drink.
Energy drinks are popular before exercise not just because of the caffeine content, but also because they often contain carnitine. This supplement is regularly taken because it increases the amount of muscle energy that can be consumed during a workout. By combining the two ingredients, people are typically able to work out harder and longer. The danger in doing so, however, is that caffeine can also rob the body of water. Most high caffeine supplements recommend that people drink 32 ounces of water when 300 mg of caffeine are consumed. Without that extra water, dehydration, cramping, and other physical issues may begin to arise from the consumption of energy drinks.
How Popular Have Energy Drinks Become?
· Even though energy drinks have experience a considerable growth in popularity, they still account for just 1% of the non-alcoholic beverage market.
· 92 % of total caffeine for adults and 87 % of caffeine for adolescents come from other caffeine sources than energy drinks.
· Energy drinks in have experienced an impressive growth of more than 240% in the United States.
· Kids in the 12-18 age demographic were actually drinking fewer caffeinated products in 2010 than they were in 2008.
· There are more than 300 varieties of energy drinks representing more than 200 brands in the United States.
· 2013 energy drink sales are up 6.7% over 2012 numbers in the United States.
· The percentage of people who say that Red Bull is their favorite energy drink: 43%.
· $3.43 billion. That’s the amount of sales that Red Bull energy drinks had in just the United States in 2013. Their global sales in 2013 were $10.9 billion.
· Just 2 other energy drink brands have reached the billion dollar mark in global sales: Monster [$3.8 billion globally] and Rockstar [$1.1 billion globally]. 5 Hour Energy would also be included [$1.1 billion in US sales in 2013] if shots and energy drinks are combined.
· Global energy drinks sales have grown by more than 50% since 2005 and represent the fastest growing segment of the beverage industry.
· Approximately 90% of adults report regular caffeine use, with an average daily intake of 227 mg.
Although the figures seem like a lot, the beverage market for non-alcoholic beverage is a trillion dollar market from a global perspective. When those kinds of figures are being used, a $10 billion sales figure for Red Bull seems like a drop in the bucket. Why is Red Bull such a popular energy drink compared to every other brand? The evidence is in the marketing. Xyience energy drinks spent more on marketing in 2013 than ever before and it helped them crack the Top 15 in sales for 2013 for the first time. Red Bull branding is everywhere. They sponsor sports events. They own sports teams, like the New York Red Bulls of Major League Soccer. Because of the branding, people recognize the name when they want an energy drink and so that’s what customers purchase.
Are Kids At Risk When They Consume an Energy Drink?
· Researchers found that 40% of the 5,156 calls to poison centers for energy drink exposure involved children under age 6.
· 73%. That’s the percentage of children in the United States who do not consume caffeine at all.
· Children and adolescents are the fastest growing population of caffeine users with an increase of 70% in the past 30 years.
· Caffeine consumers ages 12–17 years have a mean intake of 69.5 mg per day. This is double the amount of caffeine consumed in this age demographic from 1982 data.
· When caffeine intake is examined relative to body weight, children ages 2–11 consume 0.4 mg/kg and those ages 12–17 consume 0.55 mg/kg compared to the average adult caffeine intake of approximately 1.3 mg/kg.
Kids and caffeine don’t generally mix. Ask any parent who has accidentally given their child a caffeinated beverage when they don’t normally consume one and you’ll get instant agreement from most of them. Many kids when exposed to caffeine will ping off of the walls with crazy high levels of energy. The life of caffeine in the child’s body can also be as long as 12 hours, which means a noon soda can very well keep that child up to midnight – a parent’s worst nightmare. The occasional caffeinated beverage for younger children isn’t generally going to hurt them and the demographics show parents are keeping young kids away from energy drinks… but the poison control information also shows that this is a trend that is changing.
Are Energy Drinks Dangerous?
· According to adverse event reports collected by the FDA since 2004, a total of 34 deaths have now been linked to energy drinks.
· 22 out of the 34 deaths have been linked to 5 Hour Energy.
· 11. That’s the number of fatalities that have been linked to Monster energy drinks.
· The number of annual hospital visits involving the drinks doubled from 2007 to 2011, resulting 20,783 reported visits.
· 42%. That’s the percentage of people who go to the ER because of energy drink related problems and have mixed the drinks with other substances, such as alcohol, Adderall, or Ritalin.
· Some of the ingredients in an energy drink can interact with prescription medications – especially medications taken for depression.
Anything that is consumed in unhealthy amounts is going to be dangerous. Poor eating habits can lead to obesity, for example, or drinking too many non-caffeinated soft drinks can lead to insulin resistance and Type II diabetes. The point being made here through the demographics is that the simple consumption of an energy drink isn’t generally going to provide much harm unless someone is naturally sensitive to caffeine in the first place.
Swot analysis of the Industry
High profitability and revenue
High growth rate of the Market
Highly Experienced Owner-operators
Very High Gross Margins
Increased Demand of Energy Drinks in U.S
Small business units
Investments in research and development
Future debt rating
Limited flexibility in pricing
Growth rates and profitability
Expansion in Demand of Energy drinks Globally and in U.S
Affiliate relations with related vendors
Hot Market to enter
Rising cost of raw materials
External business risks
Increasing rates of interest
Changes in acquisitions can impact the business
Increases in price inputs can cause upward pricing
How To Market Energy Drinks
Branding, advertising and event promotion make up the essential components of any successful marketing campaign. When marketing a new product, you need to create a brand that people recognize and want to learn more about. Through advertising and marketing, you can educate, entice and compel consumers to purchase your new drink product. With so many drink products on the market, it is important to utilize as many marketing avenues as possible to reach your target markets. These venues include direct mail marketing, social media marketing, email marketing and person-to-person marketing.
1. Develop a company brand before attempting to market a new drink
product. A brand is your company and product "identity." It is how consumers perceive your products and, ultimately, may determine whether they choose your drink product above all the others on the shelf. Developing a brand can help you determine target markets and allow you to design a profitable marketing strategy. To create a company brand, list the benefits of your drink product. For example, promote its health benefits, how will customers be perceived if they drink it and ingredients that set it apart from others. Choose one or two benefits to create a company brand and marketing plan.
2. Write a marketing plan that includes a description of your target markets.
These are people most likely to purchase your drink product. List ways to reach these target markets through advertising and marketing, which typically includes placing ads in magazines, billboard advertising and online advertising on websites your target markets frequent. You can also build a website and engage directly with customers through social medial platforms, set up tasting booths in grocery stores and other public places to encourage people to try your new drink product or create direct mail and email marketing campaigns.
3. Build a website that includes information about the product, where it is available, ingredient information and contact information. Create fan pages on websites, such as Facebook, to start marketing your new drink product online. Post interesting information about your drink product, entertaining stories, comments and other items to continually draw interest from consumers. Place ads on Facebook to attract even more consumers to your website and fan page. You can target certain markets using the keyword tools provided. Update your website and fan pages often. Add fun games, surveys, contests and customer testimonials.
4. Create a direct mail marketing campaign to send targeted consumers information and coupons. Create materials such as a postcard or flier that include basic information, a catchy slogan and a product picture. Purchase a mailing list of those that fit your target market from a reputable marketing company. Visit the Better Business Bureau before paying for a mailing list to determine if the company is legitimate. You can also build your own list through mail and delivery services like the U.S. Postal Service and Fedex. Both websites have mailing list building tools that allow you to send direct mail to specific areas and zip codes. Select a location, such as a city or neighborhoods known for having younger or older crowds, depending on your target market.
5. Create an email contact list through your website or fan pages. Encourage consumers to sign up to receive free samples, discount coupons or other free prizes. Send periodic emails to consumers that includes fun or valuable information or additional discounts to increase sales.
6. Create brand awareness by participating in charity events, sponsoring a sports team, starting a foundation or charitable organization or organize events throughout the year, such as a summer barbecue or concert series at a local park. Print banners and other promotional materials to hang in sponsorship areas, booths at charity events or on concert stages to promote your product.
Keys to Running an Energy Drink Business
Though businesses can reap high profits due to the strong demand for such drinks, companies must have an understanding of the industry to succeed. Before designing a product, study the best-selling drinks of competitors. Assess if you want to become an energy drink distributor and piggy-back off of established companies or design, license and manufacture your own drink recipe. Consider tapping into overseas markets: Sahand Wahid Far explains in his book, “Business Plan for a Fictional Energy Drink Without Chemical Additives,” that the Asian market is one of the fastest-growing for this industry, citing a 58 perecnt increase in sales in 2004.
The saturated nature of the energy drink industry requires the business to develop a strong brand identity. Energy drinks shape their image based on their intended audience. A company competing for the dollars of nutritionally minded college students may brand its drink as one with added vitamins, no artificial flavorings and herbal caffeine enhancements. On the other hand, a business vying for the attention of high school boys may focus more on packing a sugary punch to the drink and developing a colorful liquid in bright blue, red or green. Thus, the key to running an energy drink business requires assessing which demographic you wish to target and designing flavors and packaging that appeal to this group.
Behemoth companies such as Coke, Pepsi and Starbucks aggressively compete for shelf space in both grocery and convenience stores. One of the keys to running a drink business is assessing how to get the beverage in stores. Andrew Tuefel explains in the book, “Fisher Investments on Consumer Staples,” that large companies simply substitute new products on the shelves. Tuefel elaborates that newer companies with no pre-existing relationship with the store have a significantly more difficult time. Though new drink companies may not have immediate access to larger grocery chains, smaller niche grocery stores may be more receptive to stocking a product in alignment with its store items. However, business owners should anticipate paying a “slotting fee” within stores. This fee should be added in calculation of the product’s profit margin.
Small companies unable to get a prominent shelf spot in grocery stores can utilize other ways to promote their drink. Partnering with events attended by large droves of the intended audience is one way to achieve this. Some businesses host extreme sports competitions as a way of reaching out to the teen and college audience. Others promote their drinks at festivals and concerts. Designing viral videos with a witty message is another way to gain product recognition. A grassroots effort of issuing beverage samples on campuses and in stores is another method.
Information in Powerpoint format -
The below link is to a presentation broken into the following segments which can be used for any product in any category.
Our business looks forward to working and providing you with the necessary information required for your products and business to be a success in whatever market you operate.
1.) STRATEGIC EVALUATION
2.) COMPETITIVE POSITIONING
3.) MARKET ASSESSMENT
4.) CATEGORY AND GEOGRAPHIC OPPORTUNITIES
5.) BRAND STRATEGY