Jonny Forsyth, senior drinks analyst at research firm Mintel, told BeverageDaily.com that major brand-owners had been a little slow to reposition products to capture this market trend, with many products initially designed to aid ‘sports performance’.
This reflects a new Mintel report, ‘Generation Zzz’: younger consumers kept awake by energy drinks’, which found that energy drinks were key products for 16-24 year-olds in the UK, with a 73 per cent consumption rate, as against 31 per cent for 55+ year-olds.
But while taste was cited as the main reason for buying drinks amongst 16-24 year-olds (the so-called ‘Generation Z’), Mintel found that 70 per cent also bought these products for a “general energy boost” and to improve work or study performance.
Beyond the sports platform
Asked if firms had moved quickly enough beyond a sports platform to capture this general market – by repositioning brands, changing packaging – Forsyth said: “We are seeing a shift towards this with products such as Lucozade Alert, but no-one has cracked it yet.
“Someone will soon, but the big players have been a bit slow off the mark in recognising the opportunity and the young demographic has meant that growth has come easily anyway.”
Forsyth said that Lucozade Focus had not performed well, but Lucozade was better-placed to make this work than anyone else.
This was due to the GSK-owned brand carrying the most trust with consumers, he said, while it was less associated with youth and more with scientific reliability, “and is therefore likely to appeal to a more sceptical older consumer”.
But Forsyth added: “That Lucozade is now chasing a younger demographic feeling its brand has lost its ‘cool’ factor tell its own story.”
Meanwhile, Forsyth said Red Bull's Pay it Forward scheme was “designed to convince over-30s that energy drinks can replace coffee for a boost during the working day”, while Powerade Energy (CCE) was also targeting ‘everyday occasion/older’ consumers.
But since these campaigns were in their infancy it was hard to assess their success, Forsyth added.
Cracking the UK market
He said that energy shots, “a more compact and sustained energy boost (i.e. 5-8 hours)” were supposed to help crack this UK market when they came out en masse in 2009.
“They had done well in the US among workers, but consumers in the UK have unanimously rejected them,” Forsyth said.
Despite an income squeeze during the recession and premium prices, Mintel estimated that the UK energy and sports drinks market would be worth £1.1bn in 2011 (up from £920m in 2008) and £1.8bn by 2016.
New product innovation in the first half (H1) of 2011 saw Europe account for 40 per cent of global launches in the category, Mintel said, followed by the Asia Pacific on 24 per cent.
In terms of global trends, Mintel said producers were targeting diet/low sugar product variants, and were stripping out additives and preservatives from formulations.