Boundless Energy

Jul 30, 2007 12:00 PM, By KELLY GATES

The proliferation of new energy drinks is presenting a host of merchandising challenges for retailers


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Boyer's Food Markets, Orwigsburg, Pa., has added an energy drink endcap to 15 of its 17 stores, said Anthony Gigliotti, vice president of sales and marketing. Most of the retailer's locations have also gained two front-end mini-coolers and an additional 4 feet of shelf space, both devoted to energy drinks.

“At our stores, the energy category is fueled by the 16-ounce drink, which accounts for 61% of the category,” Gigliotti told SN. “Boyer's energy category is up 119% vs. the previous year.”

These bigger cans are in high demand throughout the industry, said Gary Hemphill, managing director for Beverage Marketing, New York.

“I've seen some segmentation in terms of packaging, with 16-ounce cans becoming much more popular than the slim-line 8-ounce cans Red Bull originally marketed,” he said.

Other sizes are popular too. Red Bull was the first to introduce a 12-ounce can, hoping to attract more soda drinkers, said company spokeswoman Nyla Hassell.

“It's a potential entry point for new consumers migrating from carbonated soft drinks in search of premium products that energize,” she said. “Red Bull Energy Drink 12-ounce also attracts users who think 16 ounces is too much but want more than an 8-ounce functional energy drink. We've already seen evidence that the 12-ounce package is driving the energy drink category, as well as total Red Bull brand volume.”

Pepsi-Cola has done a wealth of research to determine what consumers want. The manufacturer discovered that bigger is indeed better.

“Current trends are leading to larger packaging, and other beverage companies are making them as well,” said Naughton.

While packages are getting bigger, some brands are offering slimmed-down versions of their original energy drinks. Coca-Cola introduced sugar-free Vault Zero in 2006.

Red Bull and SoBe come in both diet and sugar-free varieties. Lesser-known brands like Go Girl, Energy 69, N Motion and Crunk also have sugar-free offerings.

“There have also been a lot of low-carb energy drinks entering the market in recent years,” said Hemphill.

Companies like Monster, Kronik and Unbound make low-carb products, and some, like Rockstar and XS, offer zero-carb energy beverages.

BEVERAGE WATCH

Carbonated beverage and refrigerated juice and drink purchases followed those of milk, which maintained its position as the most frequently shopped-for beverage.

CATEGORY % OF PENETRATION* % OF HOUSEHOLDS REPEATING PURCHASES PURCHASE CYCLES** PURCHASE OCCASIONS PER BUYER
Milk
96.8
94.6
24
23.9
Carbonated Beverages
94.8
90.5
34
19.1
Refrigerated Juices/Drinks
80.9
68.8
50
9.6
Bottled Water
76.8
63.5
51
8.4
Beer/Ale/
Alcoholic Cider
37.3
25.1
60
7.9
Wine
33.3
21.3
70
6.0
Source: IRI's Calendar Year 2006 Consumer Insight Builder
* Percent of U.S. households buying at least once in club, convenience, dollar, drug, grocery, mass and supercenter channels during the 52 weeks ending Dec. 31, 2006.
** Average number of days between repeat purchases by household.

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