Energy drinks grow up

By Andrew Kaplan

Energy drink consumers are getting older, and manufacturers are not forgetting about them.

A teenager in 1987, when Red Bull first appeared, would be around 45 years old today. This consumer would have long ago aged out of the 18-34 year old age range that currently comprises the core demographic of energy drink consumers.

This little fact has left energy drink manufacturers with something of a conundrum—chase an aging energy drink consumer or focus precious marketing dollars on what remains their core energy drink audience: teenage males?

According to Beverage Marketing Corp., based in New York, consumers aged 18 to 24 years are more than twice as likely to drink energy drinks than the national average. There are 28.5 million consumers in this age group, and 23.8% of them, or 6.8 million, consume energy drinks. The second highest likelihood is found in the 25-34 age range. While 35- to 44-year-olds are 10% more likely than average to imbibe energy drinks, all other adult age groups have below-average inclinations.

While seniors may not become energy drink consumers any time soon, that has not stopped the category from growing up to some extent. One example is Starbucks’ line of Refreshers products. The Seattle-based company does not market its line of energy drinks to any specific demographic, but its cues certainly denote a more gentle approach to energy that appeals to an older demographic. Just put its name, “Refreshers,” next to some of the others, “Monster,” “Red Bull” and “Bawls,” and the difference becomes fairly obvious. Then there are the other attributes that Starbucks likes to tout about the product. “Starbucks Refreshers were introduced to provide our customers with a thirst-quenching refreshment beverage made from real fruit juice and a natural boost of energy from a new source, green coffee extract,” says Starbucks spokesperson Erin Shane. “Unlike traditional coffee, green coffee extract provides a mild, fresh flavor while still retaining the boost of caffeine that is naturally found in coffee beans.”

For many other energy drinks the trick is to maintain a loyal following among long-time consumers who are getting up there in age, while still remaining fresh and appealing to younger consumers just becoming interested in energy drinks.

One brand trying to bridge that gap is Bawls. Coming onto the market as it did in the mid-nineties, it was embraced by video gamers at LAN (local area network) parties and conventions as a way to stay alert during marathon competitions. “Bawls is a highly-caffeinated soda with guarana and it gives you that sustained lift and focus that you need to play video games without crashing,” says Jon Gunnerson, CEO for the Twinsburg, Ohio-based company.

Bawls noticed this and became a major sponsor of these video game events, something that continues to this day. “We have people who started drinking the beverage in ’96 who on paper might be 36-years-old or older,” he says. “We have two brands that have been around for a while—Bawls, since 1996 and Crunk!!! Energy Drink since 2004—and have a loyal following in both instances that are clearly older than the typical demographic of 18-24 and 25-34.” A recent gaming event called QuakeCon in Dallas saw a truckload or 4,799.9 gallons (adjusting for the Bawls chugging contest spillage) worth of Bawls consumed. “We’re fortunate because at QuakeCon there were all ages that are into the PC Gaming environment and support the brand,” says Gunnerson.

He adds that Bawls is also “aggressively pursuing that younger consumer on college campuses, etc. because that is still who consumes the largest portion of energy drinks.” Both Bawls and Crunk!!! are currently working on new flavors that Gunnerson describes as “fun and younger flavors” meant to keep the brand relevant with the core energy drink demographic of younger consumers.

Red Bull officials say they market squarely to the 18- to 34-year-old demographic. However, looking toward the future, officials for the Santa Monica, Calif.-based company say they are working to appeal more to the demographics of Millennials and Hispanics than to a specific age group outside its core demographic. “Millennial and Hispanic consumers over-index for consumption of Red Bull, which we see as very positive for the brand, as these are the two consumer groups forecasted to grow the most in the next five years in terms of spending power,” says John Showalter, RedBull North America’s director, business insights. “Red Bull consumption is driven by situations, not socio-demographics. Red Bull can be enjoyed by all kinds of people—truck drivers, businessmen, athletes and college students—whenever energy is needed.”

Soda fizzing out

Industry observers say a falloff in consumption of carbonated soft drinks may be creating the retail shelf space necessary for energy drink makers to try to expand demand to older demographics. Some add that energy drink innovation has “accelerated exponentially” in the last 18 months.

“The battle for shelf space encourages producers of energy drinks to come up with new products,” says John Lennon, president of Las Vegas-based Xyience. “The consumer is aging and the market is evolving and I think as a result of that you’re seeing the development of hybrid products like what we’ve done—energy in tea, energy in hydration, energy in lemonade. And certainly in the last year all of the major players have introduced total zero products—zero sugar, zero calorie drinks—basically I believe to appeal to an aging demographic.”

The company launched its flagship product in 2006: Xenergy, a sugar-free, zero-calorie drink made with all-natural flavors and colors.

If an energy drink is going to successfully appeal to an older demographic, it will have to do so through different formulations, says Jon Owoc, director of marketing for Weston, Fla.-based VPX/Redline Sports Nutrition and Performance Beverages, which markets the Redline energy drink brand. “Mature consumers are no longer tolerant of the debilitating health-robbing effects of high sugar energy drinks,” he says. “The market is shifting, and many active-lifestyle consumers prefer to reach for university proven Redline. The science behind both beverages offers huge performance-enhancement advantages over their sugar-laden alternatives.”

Officials for Liquid Ninja Energy Drinks say a large proportion of their sales are taking place in grocery stores, a possible sign that a different type of consumer is emerging. “It’s a more mature audience who are going in and picking up groceries and picking up energy drinks for the week,” says Eric Morgan, president of the Evansville, Ind.-based company. “Kind of replacing their morning coffee.”

Looking at the energy drink category overall, Bawls’ Gunnerson says there is a lot of room to appeal to new, underserved demographics. “I think everyone is seeking alternatives to keep up their energy level and get their boost and that fuel that they need each day whether it be from coffee, tea, energy shots, energy drinks or highly caffeinated sodas,” he says. “I know there’s been a lot written about young mothers being the next segment just because they have so much to do. It’s a logical next step as everyone is continuing to look for new alternatives.”