ROCKVILLE, Md.—While the energy drinks and shots sector comprises a small portion of the overall non-alcoholic beverage market, the sector has grown 60% between from 2008-2012, and had total U.S. sales of more than $12.5 billion in 2012, according to new market data from Packaged Facts.
Analysis shows health-and-wellness beverage products are seeing increased consumer penetration, while classic beverages—especially colas—are seeing consumer attrition. Specifically, functional ready-to-drink (RTD) beverages, namely energy drinks, sports drinks, and tea, have increased consumer penetration over the past few years.
According to the “Energy Drinks and Shots: Market Trends in the U.S." report, sales of energy drinks and shots will grow to a value of $21.5 billion by 2017, driven by continued economic recovery, expansion in retail distribution, and strong potential in new product development
Currently, energy drinks have the lowest consumption rates of any RTD beverage—a point which reflects the market’s relative infancy and its growth potential. Analysis shows the growth trend of the market, with the incidence of energy drink usage among adults rising from nearly 13% in 2006 to 17% in 2012. In addition, there is a modest segment of heavy users: 5% of adults consume energy drinks 5-7 times per month and less than 2% drink energy drinks 10 or more times. Consumers age 18-34 years, men, Hispanics, Pacific region residents, and adults with children in the household are demographics that over index in energy drink usage.
Packaged Facts estimates that energy drinks account for some 78% market share, followed by 18% for energy shots, and energy drink mixes (roughly 4%) in 2012. A few select marketers dominate the energy drinks and shots market. This demonstrates the first mover advantage in each category. The result is a market that is highly dependent on a handful of key brands, namely Red Bull, Monster Energy, 5-Hour Energy and Rockstar Energy.
Retail distribution of energy drinks and shots continues to expand at a fervent pace—making these products accessible at nearly any retail outlet from major grocery outlets to dollar stores and smoothie shops to sporting goods stores. Packaged Facts estimates that convenience stores hold the largest share of market sales (59%), followed by mass merchandisers (13%), supermarkets (10%), club stores/warehouse (5%), and drug stores (2%). In aggregate, all other retailers contribute a significant 11% to market sales.
Overall growth of energy drinks and shots is influenced positively by new product launches, packaging and expanded retail distribution. Economic factors and shifts in the U.S. adult population by age and ethnicity/race also are factors to market growth. An increasingly competitive market for “energy-boosting" products is perhaps the market’s greatest threat.