While energy drinks are often marketed at young millennials - associating themselves with sports, extreme activities and nightlife – a lifestyle shift for older millennials demands energy and gives the category a prime opportunity to evolve.
The US energy drink and shot category saw 56% growth between 2009 to 2014. Having recovered from a knock back in 2013 (when the category came under fire for ingredient safety), Mintel expects the category to increase by 52% from 2014 – 2019.
It also says that safety concerns and negativity about the category does not influence consumers as much as is often believed.
Loyal consumer base
Defined as those aged 27-37, older millennials have changing priorities as they settle down, find a partner and have families. Interests also shift to family orientated hobbies and interests.
Mintel quizzed consumers on their recent consumption of energy drinks had changed. 29% of older millennials said they had been drinking more energy drinks (as opposed to 16% among 18 – 26 year olds) and 18% had been consuming more energy shots (compared to 9%).
More respondents in the younger category reported a decline in use than in the older millennials category.
Elizabeth Sisel, beverage analyst, Mintel, told BeverageDaily.com the younger millennial category is still important – but the older millennials category is one to look out for.
“The percentage of younger millennials consuming energy drinks is the same as older millennials, so there is still a significant following with that consumer base,” she said.
“The difference we are seeing is in consumption volume. Older millennials are more likely increasing their usage, where younger millennials are more likely decreasing.
“Companies should be mindful when pushing nightlife or other marketing to attract young adult consumers, that it may not be as relevant to their more loyal consumer base.”
The presence of children drastically increases energy drink consumption, particularly among women: mothers consumer more energy drinks than men or women without children.
“Our Marketing to Millennials report finds that 80% are more likely to remember an ad if it’s funny, which also really resonates with mothers,” said Sisel. “Millennials parents may respond to ads that recognize the struggles of parenting, but use humor to add some levity.”
Natural resonates with millennials
Older millennials are the top users of natural energy drinks and shots.
However, consumers are not substituting regular for natural: they are drinking both. This suggests that the negativity around regular energy beverages and concerns about the safety of ingredients is not as strong as media reports imply, said Sisel.
“Consumers perceive natural as healthier, which is likely driving natural energy drink/shot consumption, rather than safety concerns,” she said.
“As millennials age, their interest in healthier products will intensify. Starting families will also encourage them to seek healthier products as they look to set good examples for their children.
“But I would not single out younger or older millennials as a greater influence on natural trends. The majority of millennials’ number one goal is to live a healthier lifestyle (actually, younger millennials are slightly more likely than older millennials).
“Millennials are aging, and while the presence of children may encourage energy drink consumption for older millennials, an equal percentage of younger and older millennials have the personal goal of having a child or having more children in the next three years.”
Energy shots woes
Energy drinks held a chunky 89% market share of the energy drink / shot category in 2014, meanwhile, shots are stumbling with continued declines predicted.
“Energy shots struggle with being seen as a supplement, rather than a beverage,” said Sisel.
“The segment has also been struggling with taste, which we are seeing some companies like 5-Hour Energy addressing.
“Consumers are looking for beverages that not only provide them energy but also are refreshing and hydrating, which is harder for energy shots to accomplish. It will be interesting to see consumer responses to recent flavor improvements and segment innovation, and its reflection on segment sales.”