Energy Drinks Maintain Buzz

Study forecasts category will grow to $21.5 billion by 2017
energy drinks

The dynamic sales growth of energy drinks and shots—60% between 2008 and 2012—is expected to maintain momentum in coming years, according to a new report from Packaged Facts. Total U.S. sales for the energy drinks and shots market was worth more than $12.5 billion last year; by 2017, it’s anticipated to grow to $21.5 billion.

Packaged Facts’ report, “Energy Drinks and Shots: U.S. Market Trends,” paints the picture of an intensely competitive beverage category, where energy shots and drinks must compete with sports drinks, coffee, teas, enhanced waters and other subcategories aligning with functional attributes.

Energy drinks currently have the lowest consumption rates of any ready-to-drink beverage, reflecting both its relative infancy and its strong growth potential. According to the report, energy-drink usage among adults rose from nearly 13% in 2006 to 17% in 2012.

There is also a modest segment of heavy users: 5% of adults consume energy drinks five to seven times per month, and less than 2% drink energy drinks 10 or more times per month. Consumers ages 18-34, men, Hispanics, Pacific region residents, and adults with children in the household are all demographics that over index in energy-drink usage.

The report estimates that energy drinks accounted for approximately 78% of market share of the energy category, followed by energy shots (18%) and energy drink mixes (4%).

Convenience stores continue to hold the largest share of market sales at 59%, followed by mass merchandisers (13%), supermarkets (10%), club stores/warehouse (5%) and drug stores (2%). In aggregate, all other retailers contribute 11% to market sales.

How will the category reach Packaged Facts’ estimated $21.5 billion value by 2017? New product innovation and expanded distribution, as well as economic factors and shifts in the U.S. adult population by age and ethnicity/race. The biggest threat? The increasingly broad range of energy-boosting products on the market, from jerky to chewing gum.

The report points to product innovation (especially energy drink mixes), leveraging interactive packaging, targeting older consumers and an increase in consumption as the strongest opportunities for the category.