Energy Drink Category Makes Savvy Moves

There’s plenty of vigor in the energy drink category. It’s not only being fueled by core category loyalists, but also by new users attracted to better-for-you options boasting natural ingredients, noncaffeinated formulas, added dietary supplements, zero sweeteners and a variety of new flavors. As a result, Caleb Bryant, associate director of food and drink reports at Chicago-based Mintel, notes that the appeal of energy beverages is broader than ever, particularly among younger female consumers.

Celsius, a line of energy beverages made with energy-boosting ingredients, essential vitamins and zero sugar, is one of the fastest-growing energy drink brands among that new user group of younger female consumers, according to Mintel. The Boca Raton, Fla.-based brand’s positioning as an alternative energy drink focused on healthy energy and aspirational fitness lifestyle marketing is a growing segment in the category. Celsius recently expanded its line with a new Green Apple Cherry flavor. 

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“A new generation of consumers is embracing better-for-you options across the beverage landscape, and the continued need for clean energy is rising to meet these new energy drinkers,” says Anne Wilcox, SVP, innovation and insights at Preston, Wash.-based Talking Rain Beverage Co. “Additional research has shown that more and more women are joining the ranks of energy drinkers to manage busy lifestyles including work and home.  These consumers are not looking for exotic muscle-building ingredients; rather, they are looking for great flavor and cleaner options.” 

Talking Rain recently debuted its own answer to that need: Sparkling Ice +Energy, a line of energy drinks positioned as an approachable option for consumers seeking cleaner and better-for-you energy sources.

The three-flavor line of beverages, available in 12-ounce and 16-ounce cans, is sugar-free and delivers a boost of caffeine along with B vitamins for added immunity support, and L-theanine to help improve concentration. The line is being test-marketed in Northern California and the Midwest.   

On the Functional Front

Energy drink makers are also targeting older Millennials with products positioned to address their particular health interests (low-sugar, healthy-aging claims) and energy requirements (sustained energy, energy to accomplish work and health goals), according to Mintel’s Bryant.

“When it comes to trends in functionality, consumers are looking for options that meet their specific needs, whether it’s energy, hydration, relaxation, or vitamins and minerals,” notes Kyle Harrington, senior director of marketing at West Chicago, Ill.-based Jel Sert, maker of Pure Kick Drink Mix functional powdered drink sticks. “The right formulation is critical in delivering the desired functionality and taste.”

“On the trend front, we are seeing an uptick in health-conscious consumers looking for balanced products with ingredients that provide added benefits and satisfying flavors,” adds Harrington. “By increasing functionality in drink mixes, we are delivering a well-rounded product with added benefits. When you add in the ease of use of a stick pack formula, the product becomes even more appealing.”

Robert Zajac, chief marketing officer at Austin, Texas-based Nutrabolt, notes that 68% of energy drinkers want to boost mental focus with products that feature better-for-you ingredients and clinically proven benefits. The Nutrabolt brand recently rebranded its C4 Energy line with six new flavors and a refreshed look to create C4 Smart Energy, a line of drinks formulated to sharpen mental focus and elevate alertness. The products are available at Albertsons, Safeway, H-E-B, Publix and Hy-Vee. “With the C4 Smart Energy rebrand, we are providing consumers with the product they really want,” says Zajac. 

Other brands are entering the segment as well. Atlanta-based Up To Good Energy, a three-flavor line of caffeinated sparkling beverages, is crafted from upcycled cascara, the fleshy fruit surrounding the coffee bean that is higher in antioxidants and other nutrients and is credited with boosting brain memory and alertness.

Good Sports

The sports energy drink segment is also booming, with co-branded products and sports celebrity connections becoming more common.

Megabrand Gatorade, a division of Purchase, N.Y.-based PepsiCo, made category news when it introduced Fast Twitch, the first-ever caffeinated energy drink designed for athletes. The drinks contain a whopping 200 milligrams of caffeine, along with electrolytes, 100% of the daily value of vitamins B6 and B12, zero sugar, and no artificial flavors or colors. Fast Twitch debuted with an exclusive NFL deal that gave players access to the new product before launch — a move that created plenty of buzz for the new product. 

Fort Lauderdale, Fla.-based Splash Beverage Group followed with an expansion of its TapouT Hydration into the energy drink category. Formulated by elite performance nutritionist Sanjeev Javia in collaboration with TapouT ambassador and former NFL player Drew Brees, the product features a zero-sugar, all-natural ingredient mix to deliver enhanced cognitive performance, mental focus and antioxidant health, in addition to physical benefits.  

Sports nutrition and lifestyle brand Bucked Up, based in American Fork, Utah, expanded its energy drink lineup with LFG Burn, a performance energy drink modeled after the brand’s LFG Burn Pre-Workout supplement powder. This expansion also includes four new candy-inspired flavors available in Bucked Up’s original energy drink line.

While sport-centric products are making inroads in the category, Mintel also sees a niche opportunity for gamer energy drinks. Currently a small segment of the total market, brands such as West Babylon, N.Y.-based G FUEL and Green Bay, Wis.-based Rogue Energy are poised for strong growth, “considering gaming’s ubiquity among young consumers,” a recent Mintel report observes. 

What’s New

If increased segmentation isn’t enough to crowd supermarket shelves, manufacturers are also continuing to add new flavor profiles and limited-edition flavors to hold consumers’ interest. Category leader brands are rolling out limited-edition flavors with a seasonal spin. Most recently, Red Bull, whose North American headquarters is in Santa Monica, Calif., added a Summer Edition Juneberry flavor, while Corona, Calif.-based Monster Energy debuted a Kiwi Strawberry addition to its signature Monster Reserve line.

“While traditional flavors like lemonade and fruit punch are popular among consumers, creating unique and elevated twists on the classics or exploring new flavor trends can set a product apart from the competition,” says Jel Sert’s Harrington. “We’re seeing true fruit flavors and emerging fruit confections trending, with flavors such as Dragon Fruit, Elderberry, Jackfruit and Blue Raspberry becoming more popular, so we are developing new products that incorporate these flavor profiles.” Recent offerings from the brand include Jolly Rancher Green Apple and Jolly Rancher Blue Raspberry flavors.

Product proliferation is certainly an issue for retailers. Talking Rain, for one, is making an effort to control new introductions and zero in on products that will prove to be winners.

“With the proliferation of so many new beverage options, distributors and retailers want more proven products,” says Wilcox. “They are looking to reduce the risk of new brands and products, increasing the odds of maximizing on-shelf revenue.”

To that end, the company launched I.C.E. Labs last year, a “test and learn” program that moves product from limited store trials to multimarket tests using in-store sampling and consumer “voting.”

“Through detailed in-store feedback, we are able to make adjustments to our products and put them back out in the market to gauge the impact,” explains Wilcox. “The key benefit of this program is a more pressure-tested and proven product.”