Global Sports and Energy Drinks Industry
Markets and Markets predicts worldwide demand for sports and energy beverages will record yearly growth in excess of 10% for the five-year period ending 2016. Market growth is fuelled by increasing health awareness among consumers who have less time and energy, and are eager to combat day-to-day fatigue with energy-boosting drinks.
Industry players are diversifying their product portfolios with diet drinks and sugar-free drinks to appeal to female and health-conscious consumers. Marketing approaches for sports and energy drinks differ as the former are used to replace fluid used up during physical activity, while the latter concerns drinks used to gain energy.
- The world energy food and drinks market recorded almost 7% growth between 2009 and 2010 to exceed $30 billion, reports Business Insights. The market is forecast to reach close to $39 billion in 2014, with a decline in yearly growth rate to less than 6%. Energy drinks represent the leading segment in the global functional drinks market, with almost 58% market share, reports MarketLine.
- The sports drinks market is well established whereas energy drinks represent a market segment recording rapid growth and holding vast potential. BizAcumen points to the role of health awareness in the sports and energy drinks market, with marketing of sports drinks geared specifically towards athletes. Companies are responding to increasingly well-informed consumers by investing in research regarding factors such as sports nutrition.
China’s sports and energy drinks market faced stiff competition from alternative beverages like fruit juices, bottled water, tea and other soft drinks in 2010, reports Euromonitor International. Leading companies operating in the sports and energy drinks market have expanded their distribution networks.
Leading companies operating in the sports drink market segment include Powerade and Gatorade. Red Bull, a leading name in the energy drinks market segment, sold more than 4,600 cans in 2011, representing 11% market growth year-on-year. The company’s revenue rose more than 12% to exceed $5.5 billion. Sales grew over 10% in the US and Germany, and more than 60% in Japan and 35% in France. Red Bull is developing in the US and the EU, but also in markets with large potential such as India, China, Japan and Brazil. Red Bull has almost 8,300 employees spanning close to 165 countries.
Gatorade is a leading sports drink, available in more than 8 varieties, including a lower calorie variety to cater to weight-conscious consumers. The drink replenishes electrolytes and provides a quick boost of calories, sodium, potassium and chloride levels after physical activity. Coca-Cola’s still isotonic sports drink, Powerade, also replenishes fluids and minerals, including magnesium, sodium, calcium and potassium.
The global sports and energy drink market is likely to benefit from moving into untapped markets and marketing toward an older population, according to research from Markets and Markets. Following consumer trends will prove equally important, with leading companies including natural and organic ingredients in their products. Parents concerned about the rising rate of child obesity are also likely to respond to lower sugar and caffeine content product offerings.
Other ingredients, such as B vitamins and fruit antioxidants, will boost brand image in answer to health concerns regarding the sugar or caffeine content of some energy drinks, reports Datamonitor. This should appeal to women consumers in particular, who are normally more aware of the health aspect of such products. As consumers try to cut down on sugar and caffeine, they are also becoming more receptive to plant-based ingredients like chlorella, wheatgrass and spirulina.
Energy drinks will continue to record the strongest growth in the functional drinks market over the coming years. Companies will try to set themselves apart by changing their packaging, flavors and promoting brand names.
Leading Industry Associations