Energy drinks: more than just a passing fad
market with a 66 per cent share, and it also provides the model for
most of its rival brands. But despite the dominance of one brand,
the market shows no sign of stagnating, according to a new report.
Critics who suggested that energy drinks were just a passing fad and that the rapid growth rates in many European countries would never be maintained appear to have been proved wrong. A new report from drinks consultancy Zenith International shows that energy drink sales in western Europe showed no sign of slowing last year, and predicts that growth will continue some time yet.
The '2002 West Europe Energy Drinks' report claims that energy drink sales grew by 22 per cent 2001 to reach 289 million litres, putting total sales value in western Europe at around €2,775 million.
Most of the energy drinks consumed were done so away from home, with 64 per cent of sales coming from bars, restaurants or petrol stations, according to the report. However, Zenith also noted the growing importance of the retail trade, which now accounts for 36 per cent of energy drink sales as a result of a broadening consumer base.
Energy drinks are not now seen solely as a mixer with spirits which allow drinkers to keep going for longer, or as a means of keeping drivers awake during long journeys - they are also being more widely used as a pick-me-up by the general public. The retail sector also has a price advantage over the on-trade and petrol station sector; the premium prices charged in bars and restaurants means that they accounted for 82 per cent of value sales in 2001.
"Strong marketing, the targeting of key consumer groups such as drivers, wider distribution, packaging innovation and a stream of new entrants have given a lift to most European markets," commented Zenith research director Gary Roethenbaugh. Only the more mature markets of Austria and the UK fell short of double digit growth in 2001. Portugal was the year's fastest climber at 74 per cent. France, Greece and Norway were all up by 50 per cent or more, he said.
The largest market in 2001 was the UK with 30 per cent of total volume, followed by Germany on 26 per cent and Austria on 10 per cent. In fourth place on 9 per cent was Spain, where international brands are of particular importance.
Despite a flood of new products, Red Bull has maintained its lead throughout as Europe's largest energy drink brand by far. With an overall 66 per cent volume share, the brand is present in 13 western European countries and held the leading position in 12 of these.
Battery from Carlsberg's Finnish arm Sinebrychoff, Red Devil, Flying Horse and Cult Energy Activator are also influential, but remain a long way behind at around 2 per cent each. Retailer own labels have risen rapidly to a 6 per cent share.
Cans account for 86 per cent of all energy drink sales, with glass a distant second with 10 per cent and PET accounting for the remaining 4 per cent. Post-mix containers and other formats are also present on a very small scale.
While many energy drink brand names seem to follow a similar pattern (an animal name, a colour, some suggestion of power or movement all seem to figure prominently), there are other similarities between the products. Virtually all energy drinks are carbonated, though small quantities of still and powdered products are also produced, and most (84 per cent) seem to follow the Red Bull design of a caffeine and taurine mix to provide the energy boost.
"Although faced with growing competition from pre-mixed spirits and other functional soft drinks, energy drinks have continued growth potential," Roethenbaugh added. "With Coca-Cola and Pepsi, Britvic and Danone venturing into the category, as well as a range of consumption occasions still untapped, other soft drinks leaders ignore energy drinks at their peril."
Zenith predicts annual growth rates of between 11 per cent and 16 per cent over the next five years, taking western European energy drinks consumption to over 500 million litres by 2006.