A recent report on the UK market for sports and energy drinks showed that the category has continued to grow at an explosive rate, with more than 20 launches or relaunches in that market alone last year. We spoke to the report's author, Richard Hall of UK-based consultancy Zenith International, to see whether that trend was likely to extend to the rest of Europe as well.
While the UK is certainly not the only market in Europe where energy and sports drinks are big business - nor indeed is it the largest, in per capita consumption terms at least - it is undoubtedly the most dynamic, with a plethora of brands and a vibrant marketing scene.
But the irony of the market is that despite this vibrancy, it is dominated by three brands which have virtually served as blueprints for most of the others: Red Bull, Lucozade Sport and Lucozade Energy.
Lucozade has been around since the 1920s, and was originally sold as Glucozade, a source of glucose energy for sick children. With the arrival of the decadent 1980s, the brand took on a new image which is the basis of most of the other drinks around today - everyday energy replacement. The Red Bull brand of functional energy drink followed in the 1990s after starting out in Austria.
"The UK is the strongest and most diverse market for energy and sports drinks in Europe - one where the message has won through," said Richard Hall, chairman and founder of Zenith International and author of the 2002 Retailer Briefing on UK Energy and Sports Drinks.
British consumers have been aware of the energy drink concept for a long time because of the sheer age of the Lucozade brand, but it was really the arrival of Red Bull that shook the market up. It had to fight against all those old concepts of energy drinks as embodied by Lucozade, and in doing so revitalised the market - Lucozade included, which repositioned its core brand as Lucozade Energy and launched an isotonic variant, Lucozade Sport.
Red Bull still dominates the UK market with 46 per cent of retail sales valued at £323.5 million last year. Lucozade has slightly less - 43 per cent, divided between Energy (31 percent) and Sport (12 per cent) - while all the other brands and own label products combined have a tiny 8 per cent, according to the Zenith report.
Still work to do elsewhere
But despite their dominance in the UK, these brands do not share the same successes elsewhere. "The market for energy and sports drinks across Europe is improving," said Hall. "There are some legal obstacles and other barriers to pan-European sales - countries that object to cans or caffeine or taurine or energy drinks in general - but the concept is increasingly widely known and understood.
"Germany is a big energy market, and is continuing to grow, while I believe both Ireland and Austria have higher per capita consumption than Britain, so it is certainly not an isolated market. Furthermore, it is a market which is driven not only by a marketing push but also by consumer pull - people want to drink these products, independently of whether the marketing people tell them they should."
While the brand names may not always be the same, the pattern of energy drinks consumption and development seems fairly similar across Europe. "There have always been too many brands on the market for them all to survive; very few brands have the staying power. But in most markets a few of the other products will survive and make a name for themselves. A lot depends on distribution - if brands have a good distribution network which is able to help build sales, they have a better chance of surviving," Hall said.
Bars and clubs remain important outlets for energy drinks across Europe - "Many people will try an energy drink brand for the first time in a bar, with or without alcohol" - there is a growing trend towards everyday consumption as a source of energy.
This in itself throws up other challenges - not least how the brands, and the stores that sell them, distinguish themselves from each other. "This has led to a range of new products, which differentiate themselves from Red Bull through packaging, or colour, or taste, or through what they contain," said Hall. "Consumers are increasingly knowledgeable, and they understand more and more about the ingredients in these drinks, so if the science is good, it can be a real selling point."
Sports drinks are perhaps a case in point. They are generally linked with energy drinks, and indeed have a number of similarities in terms of functionality and target audience. Yet they are generally consumed in different situations - they are unlikely to be consumed in a bar, for example - and have different effects on the body.
"I think it's true to say that sports drinks marketing is more dependent on science," Hall said. "PowerAde and Lucozade are pushing the science of sport into the mainstream. Gatorade has not yet achieved that in Europe, but may be helped by the recent change of ownership [it was bought by PepsiCo from Quaker Oats]."
"But if we see a three-way marketing push from these leading brands, then the shape of the European market could change dramatically.
"Though there are differences between sports and energy drinks, they are all about 'topping up', enabling people to get more out of their lives or their activities. The products have a common target audience - young people with lots of spending power - and the opportunities are there for excellent growth."
But there are potential threats as well. There have been stories of adverse reactions to energy drinks, although the drinks have never been categorically linked to the problems.
"The companies have always been quick to respond to potential problems such as these, even if they were certain that the problem was not a result of the drink," said Hall.
"These drinks are constantly pushing the boundaries of science, and there is an argument that says can we ever be totally sure of any product's safety. What we need is a balance of judgement, and for the most part that is what we make.
"In any case, a part of the appeal of these products is the fact that they they are stretching the boundaries. This has been, and is likely to remain, a major attraction of sports and energy drinks to today's increasingly active consumer."