New, powerful energy drinks enter the ring

It wasn't so long ago that most energy-drinks markets were characterised by the presence of category leader Red Bull and a few me-too products picking up the scraps. In some markets this is still the case but a new breed of energy drinks with higher levels of stimulants such as caffeine and guarana, and a host of exotic ingredients such as ginseng and a?ai, is altering the landscape in response to mounting consumer desire to boost and replenish energy levels and provide supplementary health benefits.

New York-based market analyst Tom Vierhile notes more than 600 sports and energy-drink SKUs worldwide in 2005, with a similar number in 2006. Although this figure is complicated by the inclusion of sports drinks the trend is clear and backed up by California-based Nutrition Business Journal figures, which noted sports and energy drinks were the fastest-growing functional beverages in the US in 2005, with energy-drink sales increasing a phenomenal 60 per cent and registering sales of about $2.5 billion.

While Austrian-based Red Bull continues to dominate the US market with a 45 per cent share, others like FRS (New Sun Nutrition), 180Blue (Anheuser-Busch), Monster (Hansen), and Rockstar (start-up) have posted successive triple-digit growth years. Pepsi's SoBe and Coke's new Full Throttle are close behind and growing.

A look on enthusiastic energy drink blog, Energy Fiend, reveals hundreds of energy drinks and foods available worldwide, each with caffeine-equivalent information and how much of each product would be required to be consumed to precipitate death.

Some new products have gone too far in boosting active ingredients and in their marketing strategies, and have been reprimanded. Recently launched beverage Cocaine, from Nevada-based start-up Redux Beverages, has been withdrawn from the Australian market for exceeding permitted levels of caffeine per product there. US retailer 7-Eleven refuses to stock it.

"Our merchandising team believes the product's name promotes an image we didn't want to be associated with," said a 7-Eleven spokesperson.

Cocaine has 240mg of caffeine per 8oz can — the caffeine equivalent of three cups of regular coffee. It has quickly gathered a cult following through marketing avenues such as a MySpace website and is being readily traded on ebay.

A Canadian product, Powershot, has an even higher concentration of caffeine — 100mg in a 30ml shot — or about three times as much as Cocaine on a per millilitre basis.

But most energy drinks are eschewing this path and banking on sales via branding and name-pulling power or other novelties such as Coke's Enviga, which claims to burn fat, a strong sell in a body-conscious youth market. Thirty-one percent of US teenagers said they drink energy drinks, according to Simmons Research.

Healthy ingredients, not mega-caffeine levels, are the rage right now

Tom Vierhile, Productscan Online director, said, "If there has been a recent trend in energy drinks, it's the inclusion of 'better-for-you' ingredients like green tea, a?ai and things like that. I don't see a trend where energy drinks are pumping up caffeine levels significantly or advertising that fact.

"Also, we have seen more sugar-free energy drinks of late as consumers worry about calorie counts. This product category has always been crowded, and Red Bull's success given that factor is remarkable.

"I think energy drinks have always been more about image than ingredient labels, however. Provided that Red Bull is still in with the 'in' crowd, I don't think the brand has to worry about changing the formulation to avoid looking old-fashioned. The biggest challenge they face, though, is that the brand is so ubiquitous that it runs the risk of being too 'same old' to keep and maintain a consumer base eager to try new drinks hitting the market. You have to wonder if it will lose its 'edginess' over time.

"As for caffeine contents, my understanding is that the Food and Drug Administration does not require soft-drink companies to list the caffeine content on labels, though there is said to be a 'standing rule' to limit the caffeine content to 65mg per 12oz can. Apparently, the rule does not apply to energy drinks that can deliver more than that in an 8oz can."

— SS

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