As more people seek an active, healthy lifestyle, the sports drinks category will continue to expand, the consultancy predicts. But it sees a shift not only in the products themselves (which are now increasingly using natural ingredients), but also in the branding and marketing behind them (with new consumer groups opening up).
MyDrink Beverages, a development consulting company, has analyzed 10 successful sports drinks launches in the US and Europe from recent years.
Functional sports drinks are sought for their health benefits and have become multi-functional: valued for rehydration, nutrition and recover to help the body before, during and after exercise.
Brands to watch
These drinks are among those analyzed in the report:
Bodyarmor SuperDrink: a US premium sports drink containing electrolytes, vitamins, coconut water and natural flavors, colors and sweeteners. Its website offers a section for athletes and a section for parents.
Overly: UK hydration drink made with all natural ingredients, created by school friends Will Hammersley and Chris Hannaway. The beverage is a blend of spring water, juices, agave and electrolytes; is low in calories, and contains no added sugar.
NOCCO BCAA: From Sweden’s No Carbs Company, NOCCO BCAA is a functional beverage enriched with BCAA (branched chain amino acids), L-carnitine, green tea with EGCG, caffeine and vitamins.
Most sports drinks in the past have contained electrolytes such as sodium, potassium and chloride, and a high amount of sugar. Now more sports drinks are turning to natural ingredients to appeal to health-conscious consumers.
“With the rising concerns about high sugar intake, new sports drinks tend to shift towards some healthier, low-calorie [ingredients], but still use natural alternatives, like stevia or agave syrup/nectar,” Juste Akmenskyte, Partner Marketing Consultant at MyDrink Beverages, told BeverageDaily.
“Whey protein is also gaining its popularity among sports drinks producers as it helps with weight-loss, as well as having some other health benefits. Plant waters like coconut water are still booming too, so it is no surprise they are used in some of the sports drinks as well.”
In the report, it was shown that successful sports drinks launches have targeted a specific niche, rather than the mass market. Therefore, finding the right consumer segment for a brand is a vital element in marketing.
Under 34s are a key market for functional sports drinks, says the report.
Functional sports drinks are usually relatively expensive, thanks to high production and marketing costs.
But an increasing number of Millennials and Generation Z (the group following millennials, generally born in the 1990s or 2000s) are health-conscious and willing to pay a premium for products that are better for them.
And there’s another consumer group that is opening up, with the report finding that it’s increasingly viable to market drinks as suitable for children. In the past, artificial ingredients like color and flavor additives have made them unsuitable for children. This is changing as beverages turn to natural and organic ingredients.
There are also more brands on the market that are targeting women rather than men, which was less common before, said Akmenskyte.
Companies have, however, found success in promoting their brand by educating consumers en masse. TV shows, health blogs, social media and product packaging all have a role to play in conveying the benefits of functional sports drinks for health and sports performance.
Akmenskyte also advises integrating different forms of communication and media for the best results.
International established sports drinks brands remain focused on maintaining their brand image and growing market share, said Akmenskyte.
Meanwhile, there’s the opportunity for newer, entrepreneurial brands to make their mark in the beverage scene.
But it’s a competitive industry, and extensive research into the market and target consumer is essential.
“The biggest challenge probably common to many brands is to get the necessary funds to start and run the business,” said Akmenskyte. “We analyzed a case where the product is strong, of great interest to various retailers and so on, but lacked the necessary capital to fully implement its marketing strategy.
“And on strategy, it's obviously a challenging part too, as competition is high and it requires extensive research and consumer knowledge in order to stand out and reach the target,” she added.
“Some of the brands we covered in this report have learned some of the lessons only after they first launched the products, so they have put quite a lot of effort in repositioning and rebranding the products, so that they would be appealing and accessible to those consumers they are actually meant for.”