Energy Drinks in Latvia

PROSPECTS

Health concerns and restricted availability to minors curb consumption

Over the review period, players continued to experience the effects of the Law on Circulation of Energy Drinks introduced in mid-2016. However, the drop in consumption was also likely to be a result of the health scare generated by the pre-law public debates on the matter and retailers’ voluntary restrictions on sales.

Healthier varieties may improve category’s prospects

While it is unlikely that consumers’ perceptions will change dramatically during the forecast period, players still have the opportunity to adjust to the new reality and at least partly, through education and reformulations, stabilise energy drinks. All-natural energy drinks and low calorie sugarless versions were an emerging trend, addressing the main health concerns associated with energy drinks over the review period.

Niche segments and new flavours could help revitalise category

New flavours could potentially help revitalise consumer engagement with the category and can attract those who are not fond of the typical flavour of energy drinks. In addition, functional niche segments such as hangover cures, vitamin boosters, mental performance enhancers and other unique and novel functions may offer good potential.

COMPETITIVE LANDSCAPE

Strong trio of energy drinks players

The key players Coca-Cola (Burn and Monster Energy), Red Bull and Cesu Alus (Dynami:t) remained the strong leaders of energy drinks in off-trade value terms in 2018. They benefitted from high brand awareness and wide distribution through both off- and on-trade.

Red Bull is helped by strong heritage and continuing marketing investment

During the review period, Red Bull continued to charge premium prices for its products in Latvia, due to its iconic status earned as a creator of the category and supported by continuing marketing investment and international marketing support spillover. However, it lost off-trade value and volume share in addition to declining sales.

Alternative coffee-based energy boosters are also available

Some niche products are available as emerging alternatives to energy drinks. As of 2016, Coffee Pixels – edible coffee bars introduced by local start-up Solid Coffee Ltd, expanded distribution in Latvia, offering all-natural products rich in antioxidants, caffeine and fibre.

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