The 2004 West Europe Energy Drinks report from drinks consultancy Zenith International, shows that energy drink sales in 2003 showed a healthy 6.5 per cent increase to 311 million litres, translating into a market value of some €2.34 billion.
Solid growth, if a far cry from the 75 per cent increase in sales registered between 1999 and 2001, but one which should be maintained, and indeed improved upon, for several years to come, according to Zenith.
The market analysts predict that total western European energy drink sales in 2005 will reach around 368 million litres, an 18 per cent increase on 2003, rising to 425 million litres (a 15 per cent gain) in 2007, driven by a new wave of new products which try to differentiate from, rather than copy, market leaders such as Red Bull.
An estimated 64 per cent of 2003 volume was generated by away from home consumption through bars, clubs and petrol stations, with the remaining 36 per cent coming from retail outlets, which are becoming increasingly important as the consumer base broadens. Due to their price premium, away-from-home sales accounted for 79 per cent of value, while retail outlets took the other 21 per cent, Zenith said.
"Strong marketing, wider distribution, the targeting of new consumer groups and occasions, packaging innovation and the arrival of better differentiated new products have been key contributors to current growth," commented Zenith research director Gary Roethenbaugh.
"Although Red Bull's supremacy remains unchallenged, supermarket own labels have begun to build a significant presence and a handful of other brands are carving out their own niche," he added.
Austria-based Red Bull still holds sway as the biggest energy drink by far, with two thirds of overall volume across west Europe. The brand is present in 13 west European countries and holds the lead in 12 of these.
The rest of the top 20 brands took a combined 17 per cent share, the Zenith report shows. This indicates that the market is highly concentrated, with a long tail of numerous small brands.
Shark, also from Austria, has strengthened its position as the number two player, while third placed brand Battery, from Carlsberg's Finnish arm Sinebrychoff, retains the distinction of being the only product to outsell Red Bull head-to-head - if only in Finland.
Fewer new brands are being launched compared with the 1990s, and there has clearly been a shakeout of brands with many falling by the wayside. The major soft drink multinationals such as Coca-Cola and PepsiCo have also struggled to make headway in this sector, but are evidently determined to fight on. For example, Coca-Cola's Burn and BPM Energy Focus are both in the top 20, but not yet in the top five.
At a national level, the share of more mature markets, such as the UK and Germany, is gradually being eroded as medium and smaller sized markets expand more rapidly. The largest markets in 2003 were the UK, with 26 per cent of total volume, followed by Germany, with 20 per cent, and Spain, with 13 per cent.
German sales fell by over 20 per cent during the year, however, in the wake of new packaging deposit legislation which hit cans particularly hard. Cans command a share of 86 per cent of the total west European market, followed by glass and PET with nearly 7 per cent each, the Zenith report showed.
In fourth place on 11 per cent was Austria, which has the longest established energy drinks tradition and the highest consumption per person at 3.9 litres, well above the west European average of 0.8 litres.
Ireland and Switzerland also have high per capita consumption levels (2.9 and 2.2 litres respectively), while the Dutch drink 1.7 litres a year. Consumers in the UK and Belgium have an annual intake of 1.4 litres, just ahead of their counterparts in Spain (1.0 litres). Finland and Portugal also have above average consumption (0.9 litres), while Germany rounds out the top 10 with per capita consumption of 0.8 litres.
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