Firms that have traditionally focused on body builders, sports professionals and elite athletes with supplements or protein powders, are targeting one of the fastest growing sectors in the beverage industry – energy drinks. In 2014 global sales increased 5% to €44bn.
But it's a tough market: 67% of global energy drink sales in 2014 were held by the top five manufacturers: PepsiCo Inc, The Coca-Cola Co, Red Bull GmbH, Monster Beverage Corp and TC Pharmaceutical Industry Co Ltd.
Nutrition companies are differentiating themselves from their mainstream competitors. BCAAs (branched-chain amino acids) are a current star ingredient with clinical backing (see here or here) for muscle recovery even if that science has yet to translate into EU-backed health claims.
Protein is being promoted as an endurance booster not present in conventional energy drinks, with GlaxoSmithKline-owned MaxiNutrition Protein Milk an example of a protein ready-to-drink product (RTDs) that has recently hit the market. it has however been challenged by the UK Advertising Standards Authority (ASA) over its claim-making.
Other ingredients with potential energy or endurance attributes for the future include n-acetyl-l-tyrosine, a protein-synthesising amino acid which is acetylated for faster absorption, or beetroot extract, which contains trace amino acids.
Being healthier is another point of differentiation, although the majors are onto that too.
“Major producers have used both the protein and non-protein categories to target energy drink users, in particular, by positioning their products as more healthful versions of sugary, chemical-packed energy drinks,” Chris Schmidt, market analyst for Euromonitor International, said in an online report.
VPX’s new product, Bang, for instance contains creatine, caffeine and BCAAs and also directly hits out against traditional energy drinks, claiming that it is far from a “stereotypical high sugar, life-sucking soda masquerading as an energy drink.”
Meanwhile, smaller convenience formats, such as shots, appeal to ‘non-elitist’ consumers – recreational and amateur sports enthusiasts – as the traditional bulk formats that attract body builders or professional athletes hold less sway.
Securing shelf space
“Energy drink brands have cultivated massive growth by expanding their positioning from edgy performance boosters to basic functional drinks. The need for energy and focus is fairly universal and highly praised by consumers from all walks of life.”
"However, as more of these casual users enter the sports nutrition category, producers of convenience formats – most notably RTDs – are increasingly incorporating claims around energy and endurance,” said Schmidt.
These increasingly nutrition-savvy ‘casual users’ represent the nutrition industry’s key consumer base, but some companies are specialising even further.
Australian firm, Thortz, targets builders, miners and other outdoor labourers rather than sports players, with its formula of electrolytes and BCAAs and a marketing campaign focusing on fighting dehydration in the workplace.
But companies still face a challenge to get their product on the shelves, especially when competing with drink giants that have such well-established distribution chains already in place.
“For smaller brands, health food stores and natural grocer channels are important. Because many of these are independently owned, brands have to invest in knowledgeable sales reps to pound the pavement,” Schmidt told NutraIngredients.