2014 Beverage Report--Trend: The Stairway to Health. Countertrend: The Road to Flavor

Consumers alternately demand wellness and big tastes, and they’re willing to pay for both

By
Steve Holtz, Online News Director & Beverage Editor

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Energy Drinks: The Newcomer Keeps Buzzing

The energy-drink category started 2013 on the defensive: The high-caffeine beverages—both drinks and shots—were tied to multiple deaths across the country based generally on anecdotal evidence.

And it ended the year on the defensive: A December Mintel survey of consumers concluded that nearly six in 10 Americans (59%) who are current energy-drink or -shot drinkers actually worry about the safety of the products.

Through it all, the category grew 7.4% in unit sales in convenience stores, according to 52-week data ending Dec. 1, 2013, from Chicago-based IRI. The 2013 growth is a slip in growth of a full 10 points from the previous year, but in an otherwise lackluster year for beverages, it stands above the rest.

“The energy category continues to grow and expand in dollar volume and consumer base,” says John Showalter, director of business insights for Red Bull North America, Santa Monica, Calif. “Convenience retailers should take a look at their beverage space to make sure energy is getting its fair share of space.”

Talk to a few convenience retailers and it quickly becomes clear that they’re doing just that, with more space for the category added each year, most often at the expense of carbonated soft drinks.

“Energy is saving the beverage category,” said Chris Borota, category manager for GPM Investments, dba Fas Mart, Richmond, Va., during CSP’s Cold Vault Summit last fall.

Stan Whittaker, category manager for Quality Dairy, Lansing, Mich., agreed, even in a year marred by bad press and crummy weather. “Energy did really well this year for me,” he said. “That customer is very brand loyal.”

Still, innovation has very much been the name of the game for the energy category in recent years.

Red Bull’s flavors and Total Zero line extensions have benefited the category, while other brands have branched into energy-hybrid products, such as Rockstar Energy Water, Mtn. Dew Kickstart and Muscle Monster with protein.

The key, says Showalter, is to keep an eye on what’s really selling.

“As the beverage landscape and consumer demand evolves, beverage sets should evolve to optimize energy-category space as a percentage of total beverage,” he says. “Retailers should use category dollars, units, growth and profit to determine how much space each category [and each brand] should have.”

Adds Hemphill, “Energy drinks are likely to have solid growth in 2014 in mid-single digits. The energy need state is large and still somewhat underdeveloped, so the category is likely to see continued growth.”


Just the Stats

2013 unit growth in c-stores through Dec. 1: 7.4%

Bright spots: Resilience; bevy of new flavors, hybrids

Pain points: Continuing regulatory pressure

If energy drinks were a musical entertainer, it would be: Miley Cyrus. Even when scandal hits, sales continue to grow, consistently falling back on the axiom “There’s no such thing as bad publicity.”


Best-Selling Energy Drinks

Source: Convenience AllScan, IRI; C-store sales, 52 weeks ending Dec. 1, 2013

Red Bull remains on top of the energy-drink charts and continues to grow by double digits, though Monster’s numerous variations often gain it more space in cold vaults.

BrandDollar sales (millions)PCYAUnit Sales (millionsPCYA
Red Bull$2,578.28.19%889.210.12%
Monster$843.40.18%376.60.88%
Monster Rehab$282.5-3.75%127.0-2.96%
Java Monster$249.812.74%99.914.49%
NOS$242.46.56%116.19.60%
Monster Lo Carb$232.3-15.86%97.7-16.39%
Monster Zero Ultra$227.8>1,000%104.3>1,000%
Rockstar$222.2-4.26%109.3-3.01%
Monster Mega$215.21.56%70.22.32%
Monster Absolute Zero$151.6-20.29%65.6%-22.30%

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