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Tuesday, January 29, 2013

Energy Beverages Keep Their Edge by Losing It

What we at least believe to be increasingly hectic lifestyles has served as a trigger for a bevy of new consumer products promising  to help consumers keep up the pace.  The popularity of energy drinks or shots, in particular, has expanded at a torrid rate, tracking consumers' real or perceived need for more energy. 

Packaged Facts estimates that total U.S. sales for energy drinks/shots exceeded $12.5 billion in 2012, up 60% since 2008, notwithstanding a recession-influenced slowdown in 2009.  That’s impressive.    

Alongside the functional attributes of energy drinks, a rebellious, trendy image helped these products gain traction with the all-important 18- to 24-year-old consumers.  At least in their Western product incarnations, energy drinks have from the start been associated with raves and college cocktails. The karma of energy drinks is an update on sex and drugs and rock ’n roll, with extreme sports and auto racing thrown in, along with subsequent niche musical genres.
 
Energy shots then arrived with their own significantly divergent positioning.  If energy drinks are about loving the nightlife, energy shots are about getting through the daily grind.
A loss of edge came with a gain in audience:  traditional or non-traditional students with full-time jobs on top of course loads or vice versa, soccer moms, late-shift workers, how-to-survive-the-recession moonlighters, long-distance commuters and truckers--all were lining up to buy 24-packs of 5-Hour Energy shots at Costco.

So a  shift from edgy to everyday transpired.  Much to the chagrin of rebels without a cola, energy drink marketers reined in the party vibe to broaden their consumer base, even as energy drinks have become accessible at nearly any type of retail outlet for packaged foods and beverages, from major grocery outlets and disounters to dollar stores and sporting goods chains and smoothie shops.

For every sympathizing-with-the-devil brand such as Monster Beverage--a leader in the energy drink market that is adventurous in everything from product innovation (Uber Monster) to its brand tagline (“Unleash the Beast!”)--there are many New Kids on The Block.  And while the energy drink market may not be ready for boy bands in its prime time advertising, vanilla has infiltrated the energy drink market, both literally and figuratively.

The good news is that there’s room for greater diversity in energy drink and shot products.  As the energy drinks and shots market defies the odds (and the controversy) by continuing to prosper, sales-tracking figures confirm that the market is dynamic enough to allow for all-around opportunity rather than just bull-eat-dog dynamics. The energy drink category experienced 42% growth from 2008-2012, while energy shots grew 168%, and energy drink mixes jumped 480%.

In the energy drinks market as elsewhere,  brand line extension and new marketer entry are both important to meeting varied consumer needs and keeping consumers engaged.  Energy drink marketers can leverage several growth areas and positioning strategies, particularly targeted marketing.  For example, women may be a good audience for natural nutrition and low-sugar energy drinks, golfers may be drawn to well-manicured “sports-enhancing” energy drinks, and seniors keeping up with their apple-of-my-eye grandkids may desire products from trusted brands.

At the same time, energy drink purveyors who are so determined can retain their edginess by taking brand imaging, product innovation, contrived flavors, packaging technology, and marketing tactics to a new level of extremity—creating a next-generation beverage that’s not your mother’s energy drink.

To read more about Packaged Facts’ latest report on the energy drinks and shots market in the U.S., please visit http://www.packagedfacts.com/Energy-Drinks-Shots-7124908/

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