regulatory

Government Interference Remains Biggest Challenge for Energy Drinks

As energy drinks grow in popularity, the threat of governmental interference remains the biggest challenge, prompting some manufacturers to consider caffeine-free variants; however, they have yet to reach a consensus on the formulation that will continue to yield results.

In the wake of Lithuania’s ban on energy drinks for consumers under the age of 18, global speculation about regulations for this fast-growing soft drinks category is once again on the rise. Already banned for children under 16 in the UAE, countries have implemented or considered, not just age restrictions, but marketing/labelling regulations as well as limits or caps on caffeine content. As these beverages grow in popularity, the threat of governmental interference remains the biggest challenge, prompting some manufacturers to consider caffeine-free variants, but have yet to reach a consensus on the formulation that will continue to yield results.

In terms of total value, few soft drinks are growing faster than energy drinks. Global sales are nearing USD $44 billion and have grown at an annual average of 11.7 percent from 2009 to 2014. Although strong in its originating region of Asia Pacific ($10.9 billion in 2014), total sales eclipsed the $13.5 billion mark in North America and have surpassed $9 billion in Western Europe. The beverage also has a strong following in all other regions, with Latin American growing by 160 percent during the last five years.

As category success grew around the world, manufacturers such as Red Bull, Monster Energy and Lucozade began to innovate in terms of flavor, expanding energy drinks from purely functional occasions to refreshment uses as well—particularly during a time when many consumers are moving away from carbonates. With this broader appeal, legislative scrutiny grew, especially after energy drinks were initially blamed for the deaths of young people who consumed too many servings. Governments soon began to explore the dangers of caffeine abuse, particularly when alcohol was mixed with the product, and explored laws to regulate the labelling, usage and/or formulation of these beverages. Warnings about caffeine content were soon required on these products, as required by countries like Belarus, India, South Africa and Thailand. Canada enacted a law in 2013 that limits caffeine content to 400 g per liter or 180 g per single serving.

To learn more about regulatory issues surrounding energy drinks, check out Feliciano’s full article in the Investigating Energy Drinks Digital Pulse.

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