Energy Drinks Essay

Table of Contents Contents [hide] 1 Background 2 Market Structure 3 Industry Definitions 4 Market Metrics 5 Industry Players 6 Trends and Recent Developments 7 Sources 8 Related ResearchWikis Background Energy drinks are non-alcoholic beverages which are intended to provide a quick burst of high energy to the consumer. These may be prepared with a composition of methylxanthines, caffeine, natural flavors, some herbal components or specific vitamins including Vitamins B. They may also contain taurine, guarana, maltodextrin, ginseng, carnitine, inositol, glucuronolactone, creatine and ginkgobiloba.

Most products include artificial sugar. The primary active component is generally caffeine. Japan and Thailand have a longer history of energy drinks and the use of caffeine has been a key ingredient in those countries. Energy drinks acting as an alternative to coffee were first introduced in Europe. The market received a significant boost when Red Bull entered the US market in 1997. After this successful market introduction, various beverage companies including Coca-Cola and Pepsi entered the market. Austria-based Red Bull remains the market leader though with an approximate market share of 65%.

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According to Beverage Marketing, the growth rate of this industry had been doubling every since the late 90s. The current U. S. domestic market may be approximately $4 billion, expected to grow to an estimated US $10 billion by 2010. Recent years have witnessed the emergence of several new energy drinks. They include KMX of Coca-Cola, 180 of Anheuser-Busch, Hansen’s Energy, and Adrenaline Rush of PepsiCo’s SoBe. Pepsi had earlier introduced AMP under the Mountain Dew brand and also Extreme Energy by Arizona Beverage Company was launched.

Growth of the current worldwide market for energy drinks is estimated at 17. 8%. Major producers are focusing heavily on marketing, targeting the promotion of energizing conception, result-oriented marketing and product positioning and a greater push into developing markets. Market Structure The primary consumers of this industry are under 35 years of age and are predominantly male. Teenager and college students are core target market segments for the manufacturers and consist of the core age group of 12 to 30.

A recent survey estimates that around 35% percent of energy drink consumers are above 35 years old. Furthermore energy drinks with high sugar levels are more popular among children and women, while energy drinks with strong taste and flavor are more preferred by male consumers. Recent studies also indicated that 65% of the energy drinks market consists of male consumers. There are several types of energy drinks products. Different varieties of tea and coffee along with green tea forms one group. Second are traditional energy drinks such as Red Bull and others.

In emerging market, however, several producers have introduced new products. Combining energy drinks with alcohol has resulted in new products including “Hair of the Dog”. Mixing energy drinks with smart drinks has also created new brand names such as NOS. Industry Definitions Added sugars – sugars and syrups to be added to foodstuffs in the process of preparation. The composition of this added sugar is artificial, not naturally produced. Antioxidants – chemical composites which defend the body from cell loss by retaining oxidation Certified organic – certified by the U.

S. Department of Agriculture that the firm’s goods meet distinct organic standards. Market Metrics Energy drinks were launched in the U. S. in 1997 with Red Bull which has the largest market share. By 2001, the energy drink market had developed to almost $400 million per fiscal year accounting the retail sales. The current market valuation in 2005 is approximately $4 billion. Japan pioneered the energy drink phenomenon. The emergence of the energy drinks market dates back to the early 1960s, with the launching of Lipovitan.

In 1929, Lucozade of UK was launched. The major market regions of the energy drinks industry, according to a 2004 survey, are: Geography Market Share (%) Asia Pacific 58. 1% North America 14. 7% The market share of the Asia Pacific region is anticipated to steadily decrease due to the rise in other emerging markets. The US is anticipated to become the largest consumer market by 2009. Caffeine Levels in Energy Drinks A recent chart on growth: Industry Players Red Bull is the industry leader.

There are constantly new energy drinks manufacturers unveil such as yerba mate, green tea and ginkgo biloba. And also they are utilizing other revitalizing elements such as schizandra. The top energy drinks players are as follows based on December 2006: Breakdown of Top 15 Energy Drinks Drinks Share of Energy Drink Market (based on dollar sales) Red Bull 42. 6 Monster 14. 4 Rockstar 11. 4 Full Throttle 6. 9 Sobe No Fear 5. 4 Amp 3. 6

Sobe Adrenaline Rush 2. 9 Tab Energy 2. 3 Monster XXL 0. 9 Private Label 0. 9 Rip It 0. 8 Sobe Lean 0. 7 BooKoo 0. 5 Sobe Superman 0. 4 Von Dutch 0. 4 Trends and Recent Developments Hangover cure energy drinks are now emerging such as “Hair of the Dog”. One of the latest trends of the energy drink industry is the launch of “smart” energy drinks. SmartPower and NOS brands are new products in this market line.


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