The energy drink category is getting a boost from low-sugar varieties, shots, powders and other innovations
Amidst continued scrutiny about the amount of caffeine, sugar and other controversial ingredients in energy drinks, retailers are increasingly seeking out better-for-you versions.
“We are looking for more sugar-free products,” said Bill Eichorn, grocery category manager for Big Y in Springfield, Mass.
There are plenty of options from which to choose. The number of energy drink product introductions boasting a “low-calorie,” “no-calorie” or “reduced-calorie” claim have increased from 6% to 11% between 2004 and 2008, according to research firm Mintel.
Likewise, energy drinks featuring a “low-sugar,” “sugar-free” or “reduced-sugar” claim currently account for one in seven new launches.
“These new, natural energy-enhancing products could threaten to steal share from their less healthy counterparts,” Lynn Dornblaser, Mintel's CPG Trend Insight director, said in a statement.
Indeed, energy drinks have taken a hit for their sugar and caffeine content. Critics say that high contents of these ingredients could lead to hypertension, anxiety, headaches and insomnia. Among respondents who don't drink energy drinks, roughly four in 10 non-users say they avoid energy drinks for health and nutrition-related reasons. A third of non-user respondents agree: “they don't seem safe.”
One item on the market is Ocean Spray's Cranergy Energy, positioned as a “naturally energizing juice drink.” Cranergy is made from cranberry juice enhanced with green tea extract and B vitamins. Made with Splenda-brand sweetener, it has 35 calories per 8-ounce serving.
Such items come at a time when traditional energy drink sales are flattening out. Shelf-stable energy drinks generated $657.2 million in food stores for the 52 weeks ending Oct. 4, a mere 0.9% increase, according to Information Resources Inc. Still, certain brands retain their power.
Monster energy drinks, for instance, posted an 11% increase in dollar sales to $114 million.
At Food Lion, the category is performing well. Red Bull and Monster continue to lead the category in brand share, but better-for-you brands are showing particular promise.
“We have seen continued growth in the low-sugar and sugar-free offerings in the segment,” Will Miller, Food Lion's beverage category manager, told SN.
Food Lion is also having success with its new Blue Streak private-label energy drink. The brand is sold in four-packs of 16-ounce cans. Single-serve 16-ounce cans are also available in select stores that have “Energy Zone” coolers on the front end.
Blue Streak is available in both regular and sugar-free.
“Blue Streak continues to gain market share in the energy drink category, as we educate consumers on the brand,” said Miller.
Food Lion recently ran a high-value promotion in which a free Blue Streak four-pack was offered with the purchase of a Red Bull four-pack for $6.99.
“We used this promotion as a way to promote continued customer awareness of Blue Streak, as well as to provide an opportunity for customers to try the product against a national brand, at no financial risk to the customer,” said Miller.
Big Y doesn't have a private-label energy drink, but markets all of the national-brand leaders, including Red Bull and Monster. The category is merchandised in a 4-foot shelf set.
Overall category sales are down.
“The category was very trendy when it first came out, but popularity is starting to level off,” Eichorn said. He declined to provide exact sales figures.
Health concerns could be playing a role, but pricing is most likely the biggest culprit, Eichorn said. “The retails are a key factor in a tough economy.”
Price is such an issue that the majority of sales at Big Y come from lower-priced, single-serve items, rather than multipacks.
He declined to provide Big Y's price points, but said that the difference between buying one single-serve can and a four-pack is about $7.
Another lower-cost item in the energy drink family are so-called “shots.” These beverages typically are concentrated 2-ounce noncarbonated alternatives to energy drinks.
The shot market got its start several years ago when a company called Living Essentials introduced 5-Hour Energy. Since then, Red Bull, Monster and others have introduced their own versions.
Consumers drink energy shots for different reasons than energy drinks, according to Mintel. Energy drinks are more likely to be consumed for taste and refreshment, while energy shots are viewed as a functional product used to boost mental alertness and improve sports performance.
Energy shots are positioned as a more convenient, portable form of energy drinks because they can easily fit into a purse, gym bag or airplane carry-on.
“They are perfect for when you need an energy boost in a sip such as before a workout, in the middle of a meeting or while on the road,” Red Bull states in promotional materials.
Red Bull's energy shot is available in regular and sugar-free at a suggested retail price of $2.79 in c-stores and $2.49 in grocery.
But some retailers are shying away from energy shots. Big Y is one of them. Eichorn made the decision due to fears that the small packages could be easily stolen.
“It's an easy item to steal if not on the front end,” Eichorn said.
Meanwhile, another newer member of the category is powders. Though they still only account for a fraction of sales, their sales have tripled since 2004, reaching $3 million so far this year in food, drug and mass, according to Mintel.
“Energy drink mixes have performed well in the recession, in part because they present a more economical option compared to energy drinks,” a Mintel report states. “Energy mixes have the potential to attract price-sensitive non-users as well as current energy drink users.”
As with their energy drink counterparts, powders are taking on a more health-focused position.
Zipfizz for instance is marketed as an “all-natural, great-tasting energy drink-mix powder that delivers a powerful charge of micronutrients to the body's fuel system.”
Crystal Light, meanwhile, has introduced Crystal Light On the Go Energy, marketed as a “low-calorie energy drink mix” containing B vitamins and caffeine.
Energy drink powders are also present in private label. Food Lion, for instance, sells a 10-count of Blue Streak powder that can be mixed with water.
Traditional energy drinks are also getting more competition from other types of drinks that provide a “boost.”
For instance, Tops Friendly Markets, Williamsville, N.Y, just started carrying Chadwick Bay enhanced smoothies from Cliffstar Corp., Dunkirk, N.Y., a private-label beverage supplier.
Merchandised in floor displays, the smoothies come in several varieties, including multi-vitamin, bone health, fiber — and energy.
In other news, Cliffstar just introduced “Exact,” a line of noncarbonated energy drinks touted for natural ingredients.
Positioned as an alternative to carbonated energy drinks, Exact comes in regular and sugar-free.
“Consumers are looking for more natural ways to get an energy boost,” said Laura Corser, Cliffstar's senior business manager.