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Energy drink sales: anything but tired

Energy drinks, once exclusively designed for physically active outdoor enthusiasts and truck drivers, are now embraced by a wide demographic including teens, adults, seniors, and young moms. The list just goes on. Products purporting to boost energy and mental performance are hot today. Retailers and manufacturers love the impulse appeal and the recession-proof, double-digit growth of these premium-margin products.

The successful leaders have done an outstanding job of packing the key functionalities — a carefully concocted potion of stimulants for a sustained energy elevation without sugar — thereby sidestepping the debilitating 'sugar crash.' Living Essentials leads the energy-shot category, with NVE Pharmaceuticals a distant second.

The energy-drinks market showed nearly 400 new energy-drink and energy-shot products in 2008. The pace slowed in 2009 to just 75 new energy-drink and shot introductions as of August 2009. Almost all of them have adopted the 5-Hour Energy mantra of 'without the sugar crash of regular energy drinks.'

It is too early to tell which of the new invaders in 2009 — NOS Power Shot (Coca Cola), Monster Hit Man (Hansens Energy), Amp (PepsiCo), Rockstar, Shotz (Velocity Marketing Group), and Red Bull — will survive and be as successful as Living Essentials' 5-Hour Energy.

How long can the energy-shot leaders maintain their double-digit growth and protect their turf from the beverage giants' entries? Survival in such markets usually entails listening to consumer needs, and creating products to address emerging and unmet market needs. Living Essentials does this well by first offering a concentrated potion — without the sugar crash — and then adding a variety of flavours, and even a caffeine-free variety.

When the media focused on the health risks associated with consuming too many energy drinks, the market saw a flood of better-for-you energy drinks with natural, organic, low-calorie and sugar-free claims designed to convey 'safe and healthy energy.'

The energy-shot category, dominated by liquids, is seeing a host of other formats, including gels and, most recently, candy-like semi-solid chews with ingredients that boost energy and mental performance. But until these formats can deliver the boost like a liquid, the shots are safe!

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