Energy Drinks in Hungary

2020 IMPACT

Strong promotional activity key to attracting consumers during downturn

As large social, sponsorship and sports events were cancelled during the COVID-19 pandemic, promotional opportunities were limited for energy drinks producers. Nevertheless, companies remained active in terms of promotions via online campaigns and celebrity advertising campaigns both online and on TV.

Plummeting on-the-go and impulse purchases limit development

The most dynamic channels for energy drinks are typically convenience stores, petrol stations and newsagents, with such outlets catering to strong demand for on-the-go consumption. Energy drinks are generally consumed by younger people, who are typically more mobile and concerned with convenience.

Strong government support for leading domestic energy drinks producer

With financing support from the government, Hell Energy Magyarország expanded its production facilities in 2019, thus helping to boost production of canned soft drinks, including energy drinks. There were various disputes on this issue in the local press, with the government raising taxes on traditional carbonates and energy drinks, while at the same time offering financial support for the largest energy drinks producers.

RECOVERY AND OPPORTUNITIES

Migration towards healthy and low sugar energy drinks to support growth

Energy drinks off-trade consumption is expected to rebound strongly over the coming years as the economy recovers and reopens from the recent crisis. The foodservice channel was severely damaged by the COVID-19 outbreak, general lockdown and social distancing restrictions.

Return to on-the-go consumption to speed up recovery of energy drinks

To support on-the-go consumption, some major players are pursuing a point-of-sale strategy of placing branded coolers in all possible retail channels, grocery outlets and tobacco stores. Aside from Hell Energy, main competitor Coca-Cola follows a similar POS strategy, placing banded coolers in stores for its Monster and Burn brands.

Steady retail volume growth forecast in line with increasing maturity

Supported by intense promotion both in-store and via the media, sales of energy drinks are expected to see steady growth over the forecast period. Enjoying strong penetration among young and middle-aged consumers, the category will soon reach a high level of maturity.