Such is the value to consumers of the proposition of a daily dose of energy with no added sugar that in the US alone this new category has soared to over $350 million in retail sales in less than two years - despite recession and despite selling at a massive 400% price premium over “mainstream” energy drinks such as Red Bull (see attached charts).
With consumers everywhere motivated by energy and “no added sugar”, there is a wealth of untapped opportunities in other markets around the world for energy shots, which are typically 60ml-120ml bottles (2oz-4oz).
Among the seven factors underpinning energy shots’ huge premium are:
They offer a benefit the consumer can quickly feel.
The benefit is delivered in an ultra-convenient and ultra-portable form, quick and easy to consume; it does not require consumers to change the rest of their food or drink habits.
The report details lessons for success including:
1. Sugar is the perceived “bad” ingredient in the energy drinks market and so your product should have a “no added sugar” message. Consumers say they want products to be “as natural as possible” and prefer to have no artificial sweeteners, but the reality is that if the benefit is strong enough people are willing to make a trade off and buy a product with artificial sweetener in order to get a benefit they feel strongly that they need from a product that can clearly deliver it.
2. Sell at a super-premium price. This market is about value, not volume. Volume matters less than sell at a premium price in order to generate the high margins needed for your marketing investment. The premium for 5-Hour Energy compared to Red Bull – itself a premium product when compared to mass-market beverages such as Coca-Cola Classic – is an impressive 400%.
3. Target mothers, office workers and in fact any mature consumer struggling with a demanding day. These people are not served by the current energy drink market, where most consumers are 14–25-year-olds and male. The adrenaline-rush, all-male approach of most energy drink brands is guaranteed to alienate most consumers. A key success factor of the leading US brand 5-Hour Energy, with a 70% market share, is that it decided not to aim at the “14-year-old skate punks”.
About the report
This unique 40-page report explains how, in both the US and the UK, energy shots have achieved the impossible. It illustrates this using detailed brand sales data, comparisons of product pricing and advertising messages and claims, as well as seven detailed case studies:
Red Bull Energy Shots
Opportunities for dairy
Based on interviews with executives at all the leading companies in this new category, as well as beverage industry experts, the report sets out brief and practical guidelines for anyone else looking to replicate this success elsewhere. It summarises:
· success factors, and common causes of failure
· common lessons for pricing, positioning and branding
· key lessons in communicating benefits