Energy continues to be a booming category for the beverage industry.
Today’s beverage trends are being shaped by three main forces - health and wellness, generational shifts and digital discovery – and the energy drink category illustrates these key shifts perfectly.
Energy used to be about masculine, adrenaline-packed drinks: today they’re about exploring the natural sources of energy. And people are increasingly discovering the energy drinks for them online.
Energy demand
Functional drinks are booming. 65% of US consumers say they consume functional beverages at least fortnightly: that rises to a huge 80% of Gen Z (and 75% of millennials), according to the newly released EY Consumer Beverage Survey
That ranges from beverages for gut health to immune system and support... and energy.
Overall, 34% of US consumers drink energy drinks at least fortnightly, according to the EY Consumer Beverage Survey. But that’s even higher for the most important Gen Z demographic: where that figure rises to 53%.
Energy is a category that has been growing strongly over the last few years, and will continue to do so. And while the category was once defined by the big, adrenaline-fuelled brands, today the category is increasingly about better-for-you entrants.
That ‘better-for-you’ or ‘natural’ energy category is increasingly defining the category: with lower sugar, cleaner ingredient lists and healthier positioning.
What’s going to shape the category now is how brands can hone in on, and expand, key areas of opportunity. That’s going to mean thinking beyond the drink and about how it can fit into the lives of consumers.
“Energy will continue to be in focus,” says Sean Harapko, EY Americas Beverage Leader. “And what’s interesting with energy is we’ve started to see social media really take a big role there.”
The social media mega-brands
Brands are finding their niche: and working out how to scale up that specialism thanks to carefully focused marketing, branding and social media.
There’s Ghost: which started off as a brand for gamers; C4, which was athletes, and Alani Nu, which has built up a female following, observes Harapko.
“So we’re seeing that differentiation: not just on calories or wellness but a little bit of consumer specific groups as well,” he said.
Social media allows them to reach a very targeted audience of followers: yet from across the world.
And what’s now becoming particularly important is lifestyle branding. Here, top energy drink brand Celsius is a perfect example.
Celsius started out as a brand in the nutrition space: but re-branded from weight loss to energy. But what took that to national superstar success?
“It was social media that really amped it up,” notes Harapko.
Then there’s brands like Tenzing: which has focused its efforts on building up communities in areas such as climbing and bouldering.
Energy drink consumption still skews strongly towards male consumers; leaving a lot of white space to attract women.
Celsius’ acquisition of Alani Nu last year looks to carve out this opportunity: taking Alani Nu’s work in building up a female audience and scaling that up.
Enhanced energy
Now enhanced energy is the next frontier. Vitamins and minerals have been a key add-on in the energy drink category for years. But now electrolytes are a natural add-on: bringing sports, hydration and energy categories together.
Nootropics are another area of innovation, bringing energy and focus together.
And energy drinks could go beyond drinks. GateDrop, an energy gummy brand, is launching in the US. Again, it taps into a niche but promising audience: inspired by motocross culture.
The brand has set out to challenge the energy drinks category with a product that’s ‘cleaner, more flexible and easier to carry’, as Tim Near, Co-Founder and CEO of GateDrop, puts it: a format that can thrive where bulky energy liquids may not.
Energy drinks show no signs of slowing down: but their future will be very different to their past.
