Energy Drinks and Shots: U.S. Market Trends

  • January 2013
  • -
  • Packaged Facts
  • -
  • 137 pages

In broad strokes, health and wellness-related beverage products are seeing increased consumer penetration, while classic beverages—especially colas—are seeing consumer attrition. Specifically, functional ready-to-drink (RTD) beverages, namely energy drinks, sports drinks, and tea, have increased consumer penetration over the past few years.



While the energy drinks and shots market may be a small component of the non-alcoholic beverage industry, it is perhaps the most dynamic market—growing 60% from 2008-2012 according to Packaged Facts estimates in the all-new research report Energy Drinks and Shots: U.S. Market Trends. In 2012, total U.S. sales for the energy drinks and shots market was worth more than $12.5 billion.



Intense competition surrounds the beverage industry as marketers seek to increase market penetration and consumption frequency through positive alignment as a healthy and/or functional beverage. Thirst quencher/sports drinks remain the most formidable competitor for energy drinks as this type of beverage attracts a large constituency of energy drink users. Energy drinks are subject to competition from other energy-boosting beverages such as coffee and tea beverages, as well as an increasing number of new product innovations that tap into the energy trend but are outside of the beverage industry.



At present, energy drinks have the lowest consumption rates of any RTD beverage—a point which reflects the market’s relative infancy but also its growth potential. Experian Simmons analysis shows the growth trend of this market, with the incidence of energy drink usage among adults rising from nearly 13% in 2006 to 17% in 2012. In addition, there is a modest segment of heavy users: 5% of adults consume energy drinks 5-7 times per month and less than 2% drink energy drinks 10 or more times. Consumers 18-34, men, Hispanics, Pacific region residents, and adults with children in the household are demographics that over index in energy drink usage.



Packaged Facts estimates that energy drinks account for some 78% market share, followed by 18% for energy shots, and energy drink mixes (roughly 4%) in 2012. A few select marketers dominate the energy drinks and shots market. This demonstrates the first mover advantage in each category. The result is a market that is highly dependent on a handful of key brands, namely Red Bull, Monster Energy, 5-Hour Energy, and Rockstar Energy.



Retail distribution of energy drinks and shots continues to expand at a fervent pace—making these products accessible at nearly any retail outlet from major grocery outlets to dollar stores and smoothie shops to sporting goods stores. Packaged Facts estimates that convenience stores hold the largest share of market sales (59%), followed by mass merchandisers (13%), supermarkets (10%), club stores/warehouse (5%), and drug stores (2%). In aggregate, all other retailers contribute a significant 11% to market sales.



Overall growth of energy drinks and shots is influenced positively by new product launches and expanded retail distribution. Economic factors and shifts in the U.S. adult population by age and ethnicity/race are also factors to market growth. An increasingly competitive market for “energy-boosting” products is perhaps the market’s greatest threat.

Table Of Contents

Chapter 1: Executive Summary

Scope of Report

Methodology

Energy drinks still have modest consumption rates

Table 1-1 RTD Non-Alcoholic Beverage Usage, 2006-2012(percent of U.S. adults)

Innovative beverages

Healthy beverages

Customizable and portable beverages

Relaxation beverages



Innovation opportunity

Encourage more frequent consumption

Target older consumers

Interactive packaging could remedy labeling concerns and more

Industry context

Energy drinks and shots deliver impressive growth

Table 1-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions and percent change from previous-year period)

Explosive growth from 2011-2012

Mass-Market Category Performance



Figure 1-1 Percent Growth in SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (percent change from previous-year period)

Product performance: Three core energy drink brands steer category growth

Product performance: Living Essentials dominates energy shots

Product performance: Kraft Foods’ enters category with well-known brands



Convenience stores capture largest share of energy market sales

Market Innovation

“Diet” energy drinks

Proliferation of “natural” energy

Cross-pollination of energy drinks



Sales of energy drinks/shots projected to reach $21.5 billion by 2017

Table 1-3 Projected U.S. Sales of Energy Drinks and Shots, 2012-2017 (in millions of dollars and percent)

Top Marketers Dominate Energy Drink and Shot Sales

Figure 1-2 Top Marketers of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012

Energy Drink Usage

Table 1-4 Energy Drink Usage Rates, 2006-2012 (percent of U.S. adults)

Young adults are core users of energy drinks

Frequency of Energy Drink Usage

Energy drink brand usage

Table 1-5 Energy Drink Usage Frequency by Selected Brands, 2012 (U.S. adults)

Energy drink consumers strive to be youthful and health-minded

Table 1-6 Energy Drink Consumer Agreement Index for

Selected Health and Nutrition Statements, 2012 (U.S. adults)

Chapter 2: Competitive Context for Energy Drinks

Highlights



Scope

Market Definition

Methodology



Energy Drinks in RTD Beverage Context

Energy drinks still have modest consumption rates

Table 2-1 RTD Non-Alcoholic Beverage Usage, 2006-2012 (percent of U.S. adults)

Energy drinks vs. colas

Figure 2-1 Usage Rates for Energy Drinks vs. Colas, 2006 vs. 2012 (percent of U.S. adults)

Energy drinks vs. sports drinks

Figure 2-2 Usage Rates for Energy Drinks vs. Sports Drinks, 2006 vs. 2012 (percent of U.S. adults)

Figure 2-3 Consumption Frequency of Energy Drinks vs.

Sports Drinks in last 30 Days, 2012 (in percentage of users who drank each beverage in last 30 days)

Energy drinks vs. coffee/tea beverages

Figure 2-4 Starbucks, DoubleShot Energy

Figure 2-5 Usage Rates for Energy Drinks vs. RTD Coffee and Tea, 2007 vs. 2012 (percent of U.S. adults)

Figure 2-6 Napco Inc., Versanto Force 3X Hyper-Caffeinated Coffee

Table 2-2 Coffee and Tea Usage, 2006-2012 (percent of U.S. adults)



Energy Drink Users’ Consumption of Other Beverages

Energy drink users also enjoy other RTD beverages

Table 2-3 Indexes Among Energy Drink Consumers for Use of Selected Other Beverage Types, 2012 (U.S. adults)



Competitive Context: Beverage Innovation

Innovative beverages

Healthy beverages

Figure 2-7: Pinnacle Drinks, SoReal

Customizable and portable beverages

Figure 2-8: Kraft Foods, MiO Liquid Enhancers

Figure 2-9 Coca-Cola Company, Dasani Drops

Relaxation beverages

Figure 2-10 Marley’s Ventures Inc., Marley’s Mellow Mood



Market Opportunities

Innovation opportunity

Table 2-4 Usage Rates for Selected Types of Beverage Mixes, 2006-2012 (percent of U.S. adults)

Table 2-5

Index Among Energy Drink Consumers for Use of Selected Beverage Mix Types, 2012 (U.S. adults)

Encourage more frequent consumption

Target older consumers

Interactive packaging could remedy labeling concerns and more



Chapter 3: The Market

Highlights

Industry context

Table 3-1 SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (in millions and change from previous-year period)

Figure 3-1 Growth in SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2011 vs. 2012 (percent)



Market Size and Growth

Energy drinks and shots deliver impressive growth

Figure 3-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions of dollars)

Table 3-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions and percent change from previous-year period)



Market Composition

Dynamic market allows for growth across all categories

Energy drinks a $9.8 billion market

Table 3-3 Total U.S. Sales of Energy Drinks and Shots by Product Category, 2008-2012 (in millions)

Energy shots and energy drink mixes steadily increase market share

Figure 3-3 Share of Total U.S. Sales of Energy Drinks and Shots by Product Category, 2008-2012

Explosive growth from 2011-2012

Figure 3-4 Total U.S. Sales of Energy Drinks and Shots by Percent Growth, 2008-2012

Mass-Market Category Performance

Table 3-4 SymphonyIRI-Tracked Sales of Energy Drinks and Shots by

Product Category, 2012 (in millions and change from previous-year period)

Figure 3-5 Percent Growth in SymphonyIRI-Tracked Sales of Energy

Drinks and Shots, 2012 (percent change from previous-year period)

Sales performance for energy drinks

Table 3-5 Total U.S. Sales of Energy Drinks, 2008-2012 (in millions of dollars and percent)

Product performance: Three core energy drink brands steer category growth

Figure 3-6 Leading Brand Shares of SymphonyIRI-Tracked Sales of Energy Drinks , 2012

Table 3-6 SymphonyIRI-Tracked Sales of Energy Drinks by Marketer and Brand, 2012 (in thousands of dollars and percent)

Table 3-6 [cont’d.] SymphonyIRI-Tracked Sales of Energy Drinks by

Marketer and Brand, 2012 (in thousands of dollars and percent)

Sales Performance for energy shots

Table 3-7 Total U.S. Sales of Energy Shots, 2008-2012 (in millions and percent change from previous-year period)

Product performance: Living Essentials dominates energy shots

Figure 3-7 Leading Marketer Shares of SymphonyIRI-Tracked

Sales of Energy Shots, 2012

Table 3-8 SymphonyIRI-Tracked Sales of Energy Shots by

Marketer and Brand, 2012 (in thousands and percent

change from previous-year period)

Energy drink mix

Table 3-9 Total U.S. Sales of Energy Drink Mix, 2008-2012 (in millions of dollars and annual percent change)

Product performance: Kraft Foods’ enters category with well-known brands

Figure 3-8 Leading Brand Shares of SymphonyIRI Sales of

Energy Drink Mix, 2012

Table 3-10 SymphonyIRI-Tracked Sales of Energy Drink Mix by Marketer and Brand, 2012 (in thousands of dollars and change from previous-year period)



Retail Distribution

Convenience stores capture largest share of energy market sales

Retail expansion of energy drinks and shots

Figure 3-9 Share of U.S. Sales of Energy Drinks and Shots by Retail Channel, 2012 (in percent)

Table 3-11 Total U.S. Sales of Energy Drinks and Shots by Retail Channel, 2012 (in millions of dollars and percent share)



Factors to Market Growth

Market Innovation

“Diet” energy drinks

Proliferation of “natural” energy

Figure 3-10 Campbell Soup Company, V8 Energy Shots

Figure 3-11 Starbucks, Refreshers Energy Drinks

Figure 3-12 Jamba Inc., Jamba All-Natural Energy Drinks

Cross-pollination of energy drinks

Convenience store channel store growth

Table 3-12 Number of convenience stores, 2006-2012

Economic conditions

Median income

Figure 3-13 Median Household Income in Inflation-Adjusted Dollars, 2006-2011

Unemployment and underemployment

Figure 3-14 Unemployment and Underemployment Rates in the U.S., 2007-2012

Consumer confidence

Figure 3-15 Consumer Confidence Index, 2007-2012

Shifts in population of key demographics

Young adult population

Figure 3-16 U.S. Adult Population by Age, 2011

Hispanic population

Figure 3-17 U.S. Adult Population by Race/Ethnicity, 2011

Linking energy drink/shot consumption with health risk

Competitive energy products

Figure 3-18 PureBrands, Sheets Energy

Figure 3-19 Rocasuba, Inc., Spot On Energy

Figure 3-20 Spotonenergy.com Comparison Chart, November 2012

Figure 3-21 AeroDesigns Inc., AeroShot Energy

Figure 3-22 Aeroshots.com, Tedeschi Food Shops Promotion November 2012

Figure 3-23 PepsiCo Frito-Lay., Cracker Jack’D

Figure 3-24 Jelly Belly Candy Company, Sport Beans



Market Forecast

Sales of energy drinks/shots projected to reach $21.5 billion by 2017

Figure 3-25 Projected U.S. Sales of Energy Drinks and Shots, 2012-2017 (in millions of dollars)

Table 3-13 Projected U.S. Sales of Energy Drinks and Shots, 2012-2017 (in millions of dollars and percent)



Chapter 4: The Marketers

Highlights

Top Marketers Dominate Energy Drink and Shot Sales

Figure 4-1 Top Marketers of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012

Top Energy Drink and Shot Marketers by Category

Figure 4-2 Share of SymphonyIRI-Tracked Sales of Energy Drinks and Shots by Category, 2012

Red Bull and Monster Beverage continue to grow market share

Living Essential losing ground as energy shot category matures

Kraft Foods experiences strongest growth via energy drink mixes

Figure 4-3 Kraft Foods Inc, MiO Energy

High Performance Beverage performs well; Soda manufacturers’ brands falter

Table 4-1 Top Marketers and Brands of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012 (in millions of dollars and change over previous-year period)

Figure 4-4 Top Marketers of Energy Drinks and Shots by Share of SymphonyIRI-Tracked Sales, 2012

Top Brands

Red Bull launches Total Zero

Name change by Monster Beverage Corp. reflects powerhouse brand

Rockstar International churns out new products that go beyond energy

Figure 4-5 Rockstar International, Rockstar Relax

Table 4-2 Top Marketers and Brands of Energy Drinks and Shots

by SymphonyIRI-Tracked Sales, 2012 (in millions of dollars and percent share)

Table 4-2 [cont’d.] Top Marketers and Brands of Energy Drinks and Shots by SymphonyIRI-Tracked Sales, 2012 (in millions of dollars and percent share)

Table 4-3 Top Brands of Energy Drinks and Shots by SymphonyIRITracked Sales, 2012 (in millions of dollars, share, and change over previous-year period)



Company Profile: Red Bull North America

Performance: Continued Growth

Sales analysis

Table 4-4 SymphonyIRI-Tracked Sales of Red Bull North America

Energy Drinks and Shots, 2012 (in thousands of dollars and percent change from previous-year period)

Volume and unit analysis

Table 4-5 SymphonyIRI-Tracked Sales of Red Bull Energy Drinks and Shots, 2011-2012 (in volume and units and percent change from previous-year period)

Brand Qualities

Figure 4-6 Red Bull, Red Bull Editions

Marketing Strategies

The Red Bull Consumer

Table 4-6 Demographic Snapshot of Red Bull Energy Drink Consumers, 2012 (U.S. adults)

Opportunities and Outlook



Company Profile: Monster Beverage Corp.

Performance: Strong Innovation

Sales analysis

Table 4-7 SymphonyIRI-Tracked Sales of Monster Beverage Corp.

Energy Drink, 2012 (in thousands of dollars and change from previous-year period)

Volume and unit analysis

Table 4-8 SymphonyIRI-Tracked Sales of Monster Energy Drinks, 2011-2012 (by volume and unit metrics and percent change from previous-year period)

Brand Qualities

Figure 4-7 Monster Beverage, Monster Energy

Marketing Strategies

The Monster Energy Consumer

Table 4-9 Demographic Snapshot of Monster Energy Drink

Consumers by Age Bracket, 2012 (U.S. adults)

Opportunities and Outlook



Company Profile: Living Essentials

Performance: Slow and Steady

Sales analysis

Figure 4-8 5-Hour Energy, Pink Lemonade

Table 4-10 SymphonyIRI-Tracked Sales of Living Essentials

Energy Shots, 2012 (in thousands of dollars and percent change from previous-year period)

Volume and unit analysis

Table 4-11 SymphonyIRI-Tracked Sales of 5-Hour Energy Shots, 2011-2012 (in volume and units and percent change from previous-year period)

Brand Qualities

Marketing Strategies

Figure 4-9 5-Hour Energy, “Why Do You Want To Walk?”

Sweepstakes

Figure 4-10 5-Hour Energy, 5-Hour Energy Work Day Marathon App

The 5-Hour Energy Consumer

Table 4-12 Demographic Snapshot of 5-Hour Energy Shot



Consumers by Age Bracket, 2012 (U.S. adults)

Opportunities and Outlook

Company Profile: Rockstar International

Performance: Solid Growth Supported by Innovation

Sales analysis

Table 4-13 SymphonyIRI-Tracked Sales of Rockstar International

Energy Drink and Shots, 2012 (in thousands of dollars and change from previous-year period)

Table 4-14 SymphonyIRI-Tracked Sales of Rockstar Energy Drinks, 2011-2012 (in volume and unit metrics and percent change)

Volume and unit analysis

Brand Qualities

Figure 4-11 Rockstar International, Rockstar Recovery

Marketing Strategies

Figure 4-12 Rockstar International, Rockstar Boat Giveaway

The Rockstar Consumer

Table 4-15 Demographic Snapshot of Rockstar Energy Drink

Consumers by Age Bracket/Generation, 2012 (U.S. adults)

Opportunities and Outlook



Competitor Briefs

PepsiCo

Table 4-16 SymphonyIRI-Tracked Sales of PepsiCo Energy Drinks, 2012 (in thousands of dollars and change from previous-year period)

Kraft Foods

Table 4-17 SymphonyIRI-Tracked Sales of Energy Drink Mixes, 2012 (in thousands of dollars and change over previous-year period

High Performance Beverage

Table 4-18 SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (in thousands of dollars and change over previous-year period)

Coca-Cola Company

Table 4-19 SymphonyIRI-Tracked Sales of Coca-Cola Company

Energy Drinks, 2012 (in thousands of dollars and change over previous-year period)

Private Label

Table 4-20 SymphonyIRI-Tracked Sales of Private Label Energy

Drink Products, 2012 (in millions of dollars and change over previous-year period)



Marketers and Brands to Watch

Figure 4-13 Top Marketers and Brands of Energy Drink Products by SymphonyIRI-Tracked Dollar Sales Growth, 2012 vs. 2011 (in millions of dollars)

Energy drink brands by dollar growth

Table 4-21 Top Energy Drink Brands by SymphonyIRI-Tracked

Dollar Sales Growth, 2012 vs. 2011 (in percent and dollar change over previous-year period)

Energy shot brands by dollar growth

Table 4-22 Top Energy Shot Brands by SymphonyIRI-Tracked

Dollar Sales Growth, 2012 vs. 2011 (in percent and dollar change over previous-year period)

Energy drink mix brands by dollar growth

Table 4-23 Top Energy Drink Mix Brands by SymphonyIRI-Tracked

Dollar Sales Growth, 2012 vs. 2011 (in percent and dollar change over previous-year period)



Chapter 5: The Consumer

Note on Experian Simmons Data

Highlights



Energy Drink Usage

Table 5-1 Energy Drink Usage Rates, 2006-2012 (percent of U.S. adults)

Young adults are core users of energy drinks

Table 5-2 Energy Drink Use by Age Bracket and Generational Cohort, 2012 (U.S. adults)

Figure 5-1 U.S. Adult Population by Age, 2011

Men more likely to consume energy drinks

Figure 5-2 Goddess Energy, Inc., Flirt Energy Drink

Table 5-3 Energy Drink Use by Gender, 2012 (U.S. adults)

Energy drinks are popular among minority race/ethnic groups

Table 5-4 Energy Drink Use by Race/Ethnicity, 2012 (U.S. adults)

Figure 5-3 U.S. Adult Population by Race/Ethnicity, 2011

Pacific region residents show uptick in energy drink consumption

Table 5-5 Energy Drink Use by Region of Residence, 2012 (U.S. adults)

Parents of young children more likely users of energy drinks

Table 5-6 Energy Drink Use by Presence and Age of Children in Household, 2012 (U.S. adults)

Figure 5-4 U.S. Adult Population by Presence of Children in Household, 2000-2010



Frequency of Energy Drink Usage

Table 5-7 Energy Drink Usage Frequency, 2006-2012 (percent of U.S. adults)

Energy drink brand usage

Figure 5-5 Hansen Natural, Monster Rehab Protean + Energy Drink

Table 5-8 Energy Drink Usage Frequency by Selected Brands, 2012 (U.S. adults)



Attitudes of the Energy Drink Consumer

Energy drink consumers strive to be youthful and health-minded

Table 5-9 Agreement Indexes Among Energy Drink Users for Selected Health and Nutrition Statements, 2012 (U.S. adults)

Energy drink users seek convenient short cuts

Table 5-10 Agreement Indexes Among Energy Drink Use for Selected Time and Convenience-Related Statements, 2012 U.S. adults)

Energy drink consumers experiment with food flavors and products

Table 5-11 Agreement Indexes Among Energy Drink Users for Selected Food Statements, 2012 (U.S. adults)

Willing to try new beverages, but may prefer alcoholic varieties

Table 5-12 Agreement Indexes Among Energy Drink Users for Selected Beverage Statements, 2012




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