Coke accelerates into energy drinks market

Related tags Energy drinks Coca-cola

Coca-Cola, which until now has struggled to make its mark in the
profitable energy-drink market, hopes to rectify the situation with
the launch of Full Throttle early next year in the US.

Coke said it is targeting young men with the lightly-carbonated, citrus-flavored drink with extracts of ginseng and guarana, caffeine and B-vitamins. It will be available in convenience stores starting in January in 16-ounce cans at a cost of around $2.

Energy drinks continue to show strong growth with the US market alone now worth over $1 billion. Last year, the combined sports and energy drinks market far outpaced soft drinks in general with a 7 percent increase, according to beverage industry analysts Canadean. Indeed, the market has grown by over 50 percent in the last six years, even though volume remains fairly small.

Globally, the business is dominated by Asia and North America markets, which account for more than 80 per cent of consumption. Asia is the leading region, but still remains one of the most under-developed with weak demand in a number of countries. Japan, however, is the jewel in the crown and is bettered only in volume terms by the US.

Growth is expected to slow a little in all regions except Asia, but it is estimated that volume will advance by around 24 per cent by 2006.

Yesterday, NutraIngredientsUSA​ reported how these ever-increasingly health conscious times are proving tricky for the soft drinks' companies to navigate.

Last week, Coca-Cola and PepsiCo announced they would comply with FDA recommendations and from the end of this year start rolling out 20 ounce bottles of their fizzy drinks with more detailed nutritional labeling.

The modified packaging labels will provide expanded nutritional information -including calories, fat, sodium, carbohydrates, sugars and protein - to help consumers choose the beverages that are right for them, according to the company.

Partly due to concerns about calorie content, sales of sugary, fizzy drinks have been on the decline in per capita consumption since a peak in 1998.

Meanwhile, comparatively smaller categories such as water, energy drinks and juice-based drinks have been growing. Some attribute this growth to the health benefits consumers believe they reap from such products.

In May - no doubt with this in mind - Coca-Cola and Pepsi launched low-calorie and low-carb versions of their well-known brands in the form of C2 and Pepsi Edge.

In the past two years, moreover, three out of four of Coca-Cola's new cola products have been 'diet' drinks - Diet Vanilla Coke, Diet Coke with Lemon and most recently, Diet Coke with Lime.

However, despite these innovations, Coca-Cola took the unusual step last month of indicating that its second half results for 2004 - due to be issued on Thursday - will be below expectations, with third quarter 2004 worldwide unit case volume growth expected to be in the range of flat to one percent.

Pepsi's drinks division (Pepsico Beverages North America) also saw a total volume decline of one percent for the third quarter of 2004 and the volume of carbonated soft drinks declined by 4 percent.

"Revenue growth of three percent for the third quarter is driven largely by the continued favorable mix shift to non-carbs,"​ said the company in a statement, noting that on a year-to-date basis, PBNA volume was up 3 percent, with carbonated soft drinks flat and non-carbs up over 10 percent.

Related topics R&D Energy & Sports Carlsberg

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