Energy Drink Trends
Trends in the US energy drink space include Healthy Products and Product Distribution. The increasing popularity of energy drinks among athletes and millennial has seen an increase in the number of fitness facilities and hence, a change in product distribution.
1) HEALTHY PRODUCTS
- According to Bevnet, "Consumer demand for products that contain less sugar and are made with natural ingredients is rising, as interest in drinks that can offer different functional benefits than typically seen in energy products."
- Many brands in the energy drink space are either creating cross-functional products or adding natural ingredients like ribose and green tea/reducing sugar and caffeine due to health concerns.
- According to MarketWatch, there is a rising demand for natural energy drinks in the market. This has made manufacturers to launch products in a similar category.
- According to Bevnet, "though the market for natural energy remains less than one percent of the total category — around $64.9 million annually, compared to approximately $10.8 billion for conventional — it is growing at a much faster rate".
- Year over year conventional growth remains flat at 1.8% while that for natural energy is 16.2%.
- Companies at the forefront of the trend include Redbull. The company has responded by expanding its sugar-free SKUs range.
- Other companies that have also responded to the demand are 5-Hour, Amp Energy, and Rockstar.
2) PRODUCT DISTRIBUTION
- The popularity of energy drinks among "individuals and athletes who are involved in physical fitness activity" is increasing. "The Millennial population drives the market as they are showing a keen interest in sports, inclination towards fitness, more buying capacity and willingness to purchase healthy products."
- According to Mintel, "two-thirds of older Millennial consumers believe that energy drinks and shots are good alternatives to coffee and sodas." This is in correlation with an increase in the percentage of Millennials consuming energy drinks from 55% in 2015 to 61% in 2016, as well as a forecast that the US energy drinks/energy shots market will be worth "$19.2 billion in sales by 2021, a 47% increase over 2016."
- There has been an increasing inclination of individuals toward physical fitness, the number of health clubs and fitness centers is on the rise. One of the drivers for the energy drink industry is the increasing amount of fitness facilities.
- Manufacturers of energy drinks have to come up with product distribution channels to match the trend. One of the companies at the forefront of the trend includes MatchaBar, the company "has ingrained itself with youth culture, and welcomed rap superstar Drake as an investor and landing on the menu at Coachella Valley Music and Arts Festival."
To identify trends in the US energy drink space, we searched for industry-related articles, market research reports, press releases, and media publications on related topics. After going through numerous articles published by Grand View Research, Mordor Intelligence, Nutritional Outlook, MarketWatch, Forbes, New York Times, Financial Times, Business Insider, among others, we were able to identify distinct trends. These trends were identified based on discussions about them in at least two articles/industry reports.