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Energy drinks market continues to sparkle

By staff reporter , 24-Nov-2006

West Europe's energy drink sales accelerated by 15 per cent to a volume of 383 million litres and a value of over €3 billion in 2005, according to drinks consultancy Zenith International.

A further 12 per cent rise is expected in 2006, taking volume to 428 million litres, which equates to an average of 1.5 litres per person.

The three largest markets in 2005 were the United Kingdom, Germany and Spain, which together accounted for well over half of the West European total. Albeit from a much smaller base, France was the fastest growing market, followed by Norway, Finland and Ireland all registering growth in excess of 20 per cent.

 

"Strong marketing, wider distribution, the challenge of newer brands and increasing consumer acceptance have been key contributors to recent growth," said Zenith research director Gary Roethenbaugh.

 

"Although Red Bulls supremacy remains, it has witnessed some erosion of market share. Various other brands and supermarket own labels have now been available long enough to have carved out their own niche and secure their presence."

 

Nevertheless, Red Bull still commands just over 60 per cent of West European volume. The only brands to claim the distinction of outselling Red Bull head to head are Hartwall's ED and Carlsberg's Battery in Finland.

 

This sector is especially lucrative as consumers appear to be prepared to pay a relatively high price per litre for single-serve units of convenience and energy boosting drinks. In the UK, some £12 million was spent on advertising energy and stimulant drinks above the line in 2004, according to Nielsen Media Research, 95 per cent of which was invested by Red Bull and GSK (Lucozade).

 

Consumption of sports drinks is also rising fast in many Asian markets. Zenith International estimated earlier this year that China's sports drink market grew by 20 per cent during 2005 to reach 1,500 million litres, while the Vietnamese market is also seeing rapid growth albeit from a small base.

 

It grew by around 17 per cent to 10.5 million litres during 2005, according to Zenith.

 

Other key findings of the 2006 Zenith Report on West Europe energy drinks include the fact that the top five brands accounted for 71 per cent of volume in 2005, with the top 20 adding up to 84 per cent, indicating a highly consolidated market.

 

Some 63 per cent of volume was for away from home consumption, with 37 per cent sold through retail outlets. Due to their price premium, away from home generated 77 per cent of value, while retail took 23 per cent.

 

Concluding with detailed forecasts, Zeniths report projected annual growth rates averaging at around 8 per cent over the next five years, taking West European energy drinks consumption to more than 565 million litres by 2010.

 

The 2006 Zenith Report on West Europe Energy Drinks contains 227 pages, 31 market overview tables/charts, 16 detailed country profiles and a full market analysis.

 

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