With sales still fizzing, the phenomenal growth of the Sports & Energy drinks market shows no signs of abating. Asian Trader finds out what’s newest and hottest in the market
Tips from Lucozade's Dave Stratton
Back the bestsellers!
• Stock the right range and make sure you give bestsellers the right space.
• We recommend that the fixture is merchandised vertically, with the following adjacencies – flavoured carbonates, cola, sports & energy, water and juice.
• Give the full range of bestsellers space before tertiary brands.
• Offer a choice of flavours as consumers like to shop around but almost always have a favourite brand.
• Keep backing new products as without NPD the category would be flat.
• Support promotional events for this creates excitement and gives consumers an additional reason to buy.
Boost’s Simon Gray on driving sales
Five easy steps to success
1. Keep energy drinks merchandised together to make it easier for your customers.
2. Stock the drinks in a chiller rather than on the shelf as they will be much more appealing to customers making an impulse purchase.
3. Make sure your chiller is kept full and regularly re-faced so customers find it more inviting
4. Give consumers a choice, but only stock best sellers – speak to your wholesaler or take note of the space they allocate for guidance.
5. Create interest around the fridges using POS material, shelf talkers etc.
Sports and energy drinks exist in a competitive non-alcoholic drinks market, although their growth over the last few years has outpaced more established and mature categories such as carbonated soft drinks.
Fortunately for independent retailers, the continued success of the sports and energy drinks market shows no signs of abating.
The category is driving substantial growth across the total soft drinks market and the latest data shows that sports and energy are growing at +1.3 per cent and +9.2 per cent year on year respectively (Nielsen).
The increase in demand for functional products explains why sports and energy is not only the fastest growing segment in soft drinks, but also in total grocery.
Sports and energy drinks brands have benefited from their youth-focused marketing and strong associations with action sports, which have given them a fun and vibrant image.
The recent move to position the drinks as a lifestyle aid for consumers leading busy lifestyles has driven the market further.
The overall market has benefited from continuing investment in large scale advertising from major players such as GSK and Coca-Cola. Such support is set to play a key role in keeping the category front-of-mind with the consumer going forward.
The dynamism surrounding these drinks as a lifestyle aid looks set to further resonate with consumers who are leading busy lifestyles, with more than half admitting in a Mintel report that ‘there are not enough hours in the day’ – suggesting sports and energy drinks have an even bigger opportunity to expand in the future.
According to Mintel, the UK sports and energy drinks market has experienced exponential growth since 2009, the market seeing a rise in volume sales of more than 60 per cent over 2007-12, reaching 578 million litres.
Estimated at £1.2 billion in 2012, value sales in the market have risen by 64 per cent over 2007-12, and by around 8 per cent year-on-year, on the back of volume growth of 10.7 per cent in 2012 (Mintel).
This success has been driven by the continued switch away from the more expensive on-trade channel to the less expensive at-home environment.
Energy drinks have been the driving force behind the market, accounting for more than 80 per cent of value sales at £1 billion (Mintel).
The segment experienced an almost 80 per cent rise in volume and value sales over 2007-12, its functional positioning insulating it from cutbacks, while the market has benefited from the entry and growth of new brands, as well as the ongoing marketing and NPD of established operators.
Sports drinks remain the niche segment in the market, with sales of 131 million litres and £209 million, though also enjoying robust growth at 30 per cent by volume and 19 per cent by value, supported by the investment of leading brands like Lucozade.
The future is bright for energy drinks, with the category being one of the fastest for growth in convenience (Mintel).
So it is no surprise that once again it is predicted as the main category driver within soft drinks.
It has been reported by Euromonitor that sports and energy is expected to deliver 50 per cent of soft drinks growth, delivering an additional £338 million by 2017.
One of the reasons for this growth of the category is due to an increased understanding of what energy drinks can bring to consumer’s day to day lives.
When energy drinks were first launched to the market they were targeted towards athletes but they have now moved to focus on teenagers and young adults because of their on-the-go lifestyle, which shows no sign of slowing down.
This means that the functional benefits of energy drinks have a huge appeal to help people get the most from their day as they are feeling the need to top up their energy levels throughout the day and are on the lookout for immediate consumption solutions.
While youth continue to dominate the market the products are also becoming more appealing to the adult category as for many consumers, energy drinks have replaced traditional tea and coffee consumption – particularly for people at work or when they are out and about during the day.
The customer base will continue to grow as the existing clientele ages and new young consumers are drawn to the products.
The energy drinks market continues to keep up with its new customers by constantly evolving with the times and launching new variants of the product and is the only area of the soft drinks market which has seen phenomenal category growth over the past two years.
In an exclusive interview with Asian Trader, Dave Stratton, Brand Development Director at Lucozade spoke about current trends and how price-marked packs (PMPs) and own label are shaping the category.
According to Dave, there are three trends within the sports and energy category: health, value and innovation.
In particular, there is strong growth for products that have been tailored for specific health needs. These trends are set to continue and it is likely that the sector will experience further diversification to meet consumer demands.
The meaning of ‘value’, in particular, has changed over the course of the economic downturn, says Dave, with research highlighting that 67 per cent of shoppers will focus on ‘making more of a conscious effort to buy less than previously’ (Nielsen).
During the early stages of the recession consumers cut back and went into austerity mode, however this did not last long and shoppers soon reverted to shopping for low cost ‘treat’ products for their everyday lives.
“By tapping into these trends, retailers will be able to educate shoppers on the benefits of the sports and energy drinks as well as attract new shoppers to the category and, in turn, drive incremental sales,” says Dave.
With perhaps a nod to the value trend, PMPs currently represent good value to consumers and, in total, represent 30 per cent of all sales within the sports and energy category (Nielsen).
Within the sports & energy sector, PMPs have driven 58.9 per cent value growth compared to a standard straight pack.
“By stocking PMPs, retailers can show customers good value for money and, in turn, drive purchasing both now and on repeat visits,” says Dave.
He adds: “GSK is committed to activating exciting promotional plans for its brands and has increased the range of PMPs that it offers. However it has also made sure it continues to offer a proportion of non-PMPs to give retailers the choice.”
With all NPD going forward, GSK will be launching a non-price marked variant as well as a PMP variant.
The success of the sports and energy drink category has enticed many own label launches, but Dave says that while there is a certainly a place for lower cost own label brands within the current market, GSK encourages retailers to stock a range of sports and energy drinks to satisfy all customer needs.
“For retailers, the important thing to remember is that it is in their interests to motivate shoppers towards purchasing the higher value products, which will have a higher cash margin,” says Dave. “Lower priced products may have an attractive percentage margin, but are very unlikely to offer as much cash margin.”
GlaxoSmithKline (GSK), the maker of Lucozade Energy, the UK’s No.1 energy drink (Nielsen), has recently expanded its range for impulse retailers with two new additions, a new strawberry flavour and Melonade, a melon flavour variant.
The additions to the Lucozade Energy portfolio will tap into a new flavour profile for the brand building on the recent success of Lucozade Energy Pink Lemonade and Lucozade Energy Caribbean Crush.
Specifically developed for the impulse channel, the strawberry based flavour is a first for the sports and energy category and is set to drive penetration among current consumers.
With a 95p PMP the NPD aims to deliver value for both retailers and shoppers.
Lucozade Energy Strawberry is available now through the wholesale and impulse channel in 380ml singles.
With the aim of further driving category growth through increased consumption with new users, the Melonade variant is designed to disrupt shoppers and encourage impulse purchasing.
Lucozade Energy Melonade is available in all channels now in the following pack sizes: 24x500ml, 24x380ml standard and price-marked packs 95p and 1 litre.
Lucozade Energy Melonade singles have replaced Lucozade Energy Blackcurrant but the 1 litre variant is incremental to the range.
GSK recommend retailers merchandise the SKU next to Lucozade Energy Pink Lemonade for the best stand out.
A new marketing campaign for Lucozade Sport launched in August. Starring Lucozade Sport ambassadors Gareth Bale, Alex Oxlade-Chamberlain and several of its grassroots participants, the evocative 'I Believe' campaign continues to bring to life its ‘hydrates and fuels you better than water’ claim.
The £4 million campaign is tailored to educate consumers on how Lucozade Sport can help improve the performance of sports participants at all levels through nutritional science.
To further demonstrate its commitment to sporting performance, GSK is currently sampling until November with its target audience at football and rugby matches as well as key running events.
This Summer, Red Bull unveiled a new price-marked range across all formats of Red Bull Energy and Red Bull Sugarfree.
From May, Red Bull 250ml (£1.19), Red Bull 355ml (£1.59), Red Bull 473ml (£1.99) and Red Bull Sugarfree (£1.19), were made available as price-mark cans, giving independent and convenience retailers a strong value proposition from the number one functional energy brand (IRI).
Red Bull also redesigned its 473ml pack featuring the World of Red Bull to excite consumers.
The 473ml can features Danny Macaskill. The pack gives the opportunity for consumers to be involved in the world of Red Bull, meaning greater demand for the product and more money for retailers.
Coca-Cola Enterprises Ltd (CCE) remains a major player within energy, with both Relentless and Monster in its portfolio.
Within Immediate Consumption (IC), Relentless Origin 500ml and Monster Energy 500ml fall into the top five performing IC SKUs (Nielsen).
Relentless and Monster both introduced new PMP propositions to their ranges at the start of the year, at £1 and £1.19 respectively.
These began as only being available at specific promotional periods, but from now will be available for the rest of 2013.
To further broaden the brand’s appeal and attract new energy drinkers to the sector, CCE launched the 250ml can format of Relentless Origin at the start of 2013.
Relentless Origin 250ml is now also available in a convenient four-pack format for take-home consumption, which is another sales opportunity within the overall energy sector
Building on its current range of six flavours, CCE introduced new Relentless Lemon Ice earlier this year, a sparkling energy lemonade drink.
This variant scored very strongly in CCE's consumer research and sits alongside the existing Relentless Energy Drink variants, Berry Juiced, Tropical Juiced and Orange, which this year have also benefitted from a reformulation that offers consumers a ‘best-ever’ taste.
Brand awareness and demand is also due to be higher than ever as CCE has doubled its year-on-year spend for TV and digital advertising.
Relentless has also just introduced its first ever on-pack to drive engagement with the brand’s core audience of 18-29-year-olds and amplify Relentless’ musical associations.
The prize is a money-can’t-buy experience for 20 winners and 10 friends each to attend an intimate 250-capacity gig hosted by Radio 1 presenter Zane Lowe later this year.
The promotion is live across 11 million packs and features on each of the brand’s 500ml flavour variants.
This is in addition to the in-store promotion across the convenience channel offering shoppers the chance to win tickets to Relentless Live.
CCE also kicked off 2013 with the launch of two new variants of its Monster Rehab range. Rehab Green Tea and Rehab Orangeade follow the launch of Monster Rehab Tea & Lemonade last June.
Rehab is a unique proposition in energy as it is the sector’s first still drink, and it encompasses new flavours for energy, such as tea.
This year, Powerade is aiming to build on the high brand visibility it enjoyed during last year’s summer of sport by becoming a more accessible brand to an audience beyond its core target of active sportsmen and women.
To drive awareness and trial, the brand has started using inspirational messaging under the ‘You have more power than you think’ tagline, as well as running an on-pack promotion and introducing a £1 price-marked pack earlier in the year.
Boost recently launched a campaign to highlight the fact that it is the only brand that is still totally focused on the independent channel and that the channel has played a huge part in their success.
The new ‘Champion of the Independents’ campaign comes in many forms and retailers will see it in their wholesale depots and direct to their doors.
The brand has also been active with new product development. The newest addition to Boost’s product range is an Orange and Mango flavour in a 250ml can.
Boost’s Sales Director Al Gunn, explained: “New flavours are still a growing trend in energy drinks, but as with all our products we research what consumers really want, so that retailers can be confident in choosing Boost that our products will sell for them, and with a great profit margin for them too.”
Britvic recently launched Mountain Dew Sugar Free; the first sugar-free PET format drink in the UK energy category.
Available now through the wholesale and convenience channels, Mountain Dew Sugar Free is a citrus drink containing caffeine but no sugar, responding to the growing consumer demand for sugar-free energy drinks.
Supporting the launch was the brand’s first-ever TV campaign in the UK. It aired on national and satellite screens throughout May and June for a total of eight weeks.
No Fear drinks remains a unique proposition in the sector due to them being available in a re-sealable can.
The brand advises retailers that No Fear should be displayed in store at a level that customers can see clearly the re-sealable end, as this is a key selling point of the product so if the product is placed on the top shelf it may be missed by potential consumers.
No Fear has recently expanded with their new variants Motherload, Tropical Storm and Blue Storm.
The brand is currently sponsoring a car and popular driver Dave Newsham in the 2013 British Touring Car championship (BTCC) season.
There will be product placement at all interviews and media events, car branding in prominent position, uniform and helmet branding and the car will also be at a number of events throughout the season.
In addition to this, No Fear Extreme Energy is the exclusive promotional partner for the recent successful film, Man of Steel, and will be continuing this partnership with the release of the DVD in December.
There will be promotional activity in the weeks leading up to this.
One of the trends of the energy sector is the growth of big can formats. In the 500ml big can format, flavours are fuelling impulse market growth at +43 per cent by value.
Rockstar is leading this growth and seven of the fastest selling top ten 500ml product lines are Rockstar flavours (Nielsen).
Rockstar SuperSours has already delivered over £7 million of sales since launching in February this year and its BubbleBurst variant is the UK’s second fastest selling Big Can in Impulse (Nielsen).
Rockstar Xdurance is the UK’s fastest-selling big can energy drink (Nielsen) and the brand has built on this success with the recent launch of a new variant of Rockstar Xdurance, Tropical Orange.
Pussy Energy Drink is unique to the market as it markets itself as a healthy energy drink. It offers a completely natural product which has no taurine, artificial caffeine or synthetic ingredients.
The brand launched its biggest ever consumer advertising campaign this year, which featured regularly on billboard sites in major urban centres and are featuring again this month.
The campaign uses the strapline – “The drinks pure, it’s your mind that’s the problem”. The October executions run in London, Birmingham, Manchester, Glasgow and Liverpool.
The brand is currently trading with Palmer & Harvey and has a regular promotional programme in place to develop brand awareness and distribution gains.
A PMP offering at 99p has also been a major promotional mechanic for 2013 and has driven additional distribution within independents. The brand says this activity will be continued for the remainder of 2013.
Vimto Soft Drinks recently entered the energy drinks market by launching the new Extreme range of drinks.
The range targets 18-34 year olds who enjoy the youth culture surrounding extreme sports within music, arts, fashion and of course sport.
Extreme Energy is a carbonated stimulation drink, available in a unique black bottle containing caffeine, taurine, glucosamine and vitamins delivering energy anytime required. It is available via wholesale in 500ml RTD Price Marked Packs of £1.39.
Extreme Sport is the only action sports focused isotonic sports drink on the market containing glucose and dextrose to replenish lost fluids and carbohydrate stores during and post exertion.
Extreme Sport is a still tropical flavoured drink in 500ml RTD Price Marked Packs of £1.19.
Unlike other brands, the Extreme range benefits from the extremely high profile and influential nature of the Extreme brand amongst the target market.
The Extreme TV channel, launched in 1999, currently reaches 26.1 million consumers each month, while 66 per cent of the target audience currently watches the channel so brand recognition is extremely high.
Bestway, the UK’s largest independent wholesaler, recently launched its latest energy drink, Best-in Vanilla Gold Stimulation Drink.
Available in outers of 24, the slimline 250ml can is instantly recognisable due to its brown and gold packaging and will stand out on shelf.
Vanilla Gold carries a PMP of 35p as standard.
Delivering all the attributes of a stimulation drink with a deep, rich vanilla taste, Vanilla Gold joins Best-in’s highly successful Sports and Energy portfolio of stimulation and isotonic drinks.
Earlier this year, Britvic & PepsiCo launched a unique new stimulant energy drink into the UK market.
Available now, AMP Energy powered by Mountain Dew continues to deliver the citrus taste Dew fans know, but contains extra caffeine, B vitamins and taurine, designed for those who want high impact energy, without compromising on flavour.
The recently launched Kick Energy from Global Brands, uniquely relates to consumers who are console gamers.
Research shows a major proportion of energy drinks consumers are gamers, who often buy at least three cans of energy drink per week (Zenith).
Kick Energy is the first energy drink to directly relate to that market, offering on-pack promotions in conjunction with leading games and films such as Batman, Tomb Raider and Avenges Assemble.
The growing interest in milk as an aid to sports recovery presents an incremental profit opportunity for retailers, according to Nurishment, the UK’s number one nutritionally enriched milk drink (IRI).
Enco Products Ltd has taken the iconic Nurishment brand into a new, growing market sector with the launch of Nurishment Active, an enriched milk drink specially formulated to help the body recover after exercise.
Developed to help consumers ‘get back their spark’, low-fat Nurishment Active contains 35g of protein per pack plus a unique and complementary blend of 22 vitamins and minerals. It is designed for those who play sports, as an aid to post-exercise recovery.
Nurishment Active is available in Vanilla, Strawberry and Chocolate flavours.
This year, Nrich received a brand and packaging boost, which marked the launch of a three-year growth strategy to radically step up growth.
The brand has been given a fresh look that is designed to have stand-out on shelf, is fresh and easy to understand but also appeals to a wider mass market outside of just fitness conscious consumers.
The new look packaging is rolled out in September and is being supported with increased consumer sampling activity.
The drink uses its self developed PROCarb recipe, which provides a solution for the need to balance protein and carbohydrate intake. Nrich also uses real milk and doesn't use any artificial colours or sweeteners.
There are more significant marketing plans in the pipeline to amplify the brand's distinct ProCarb offering.
Nrich is available in five flavours; Chocolate, Strawberry, Vanilla, Banana and Peanut.