Energy drinks boost US beverage market

By Lorraine Heller

- Last updated on GMT

Related tags Cent Soft drink Coca-cola

Energy drinks last year stormed the US beverage market,
outperforming all other categories, while one sports drink inched
its way into the nation's top five trade marks by displacing a
popular soda brand, according to a new report.

Although carbonated soft drinks still dominated the market in 2006, accounting for more than half of all beverage sales by volume, total sales in the category dipped by just over one per cent during the year.

In contrast, sales of energy drinks shot up by almost 50 per cent, while one sports drink inched its way into the nation's top five trade marks by displacing a popular soda brand.

"The liquid refreshment beverage market is being driven by the health and wellness trend," said Michael Bellas, chairman and chief executive of the Beverage Marketing Corporation, which published the new market report.

"Beverages offering functional benefits are growing two to three times faster than conventional refreshment beverages.

As consumers increase their per capita consumption of beverages in these newer segments, they are putting pressure on carbonated soft drinks and juice, as well as tap water," he said.

According to the report, the "astronomical growth" of the energy drink category is partly because these products "are more successfully tapping into the spirit of the age, which is characterised by a greater emphasis on functional, healthy products."

Total sales by volume of sports drinks increased by almost 12 per cent in 2006.

PepsiCo's Gatorade brand matched this growth rate, displacing the Coca-Cola's Sprite drink, which saw volumes drop 3.5 per cent, to become the fifth top beverage brand.

In terms of volume share, Coca-Cola's flagship Coca-Cola drink remained top of the list, accounting for almost 16 per cent of the market, despite a 2.5 per cent fall in sales from the year before.

PepsiCo's Pepsi drink held second place, with just over a 10 per cent market share, although sales of this beverage also declined by 3.1 per cent compared to 2005.

The third leading beverage was PepsiCo's Mountain Dew, accounting for 4.5 per cent of the market, followed by Cadbury Schweppes' Dr Pepper at four per cent.

Cadbury Schweppes was the sole major company to see growth in carbonated soft drink volume, with its 7UP, Dr Pepper and other soft drink brands experiencing growth of 1.3 per cent in 2006, according to the Beverage Marketing Corporation.

After soft drinks, the second largest beverage category by volume - bottled water - grew by close to 10 per cent in 2006.

The two bottled water brands among the top ten liquid refreshment beverages stood at the bottom of the list in 2006, but are poised to move up in the rankings, said the report.

Fruit beverages were the third largest category in 2006, although overall sales declined 2.4 per cent in the year.

After sports drinks, which held fourth place in the beverage market, ready-to-drink teas came in fifth, experiencing a 26 per cent volume growth.

Energy drinks, with growth of 49.1 per cent, were the sixth largest category, followed by ready-to-drink coffee, which grew by 10.4 per cent.

Overall, the market remained dominated by the big players.

Pepsi led the list in 2006, recording nearly $9.6bn in estimated revenues for the year.

Coca-Cola followed with $7bn, and Cadbury Schweppes' US beverage business generated $4.5bn in the year.

Related topics Markets Energy & sports drinks

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