Energy Drinks in the US

PROSPECTS

A changing, healthier demographic slows growth in energy drinks

The high growth rates of energy drinks have slowed down since 2016. Energy drinks are most popular among younger consumers: teenagers, millennials, and students.

Energy drinks begin to evolve in terms of ingredients and function

New players in energy drinks do not only reduce the sugar content but also offer options made with natural and organic ingredients, using tea or matcha as a source of caffeine, as well as including fruit juices or coconut water as a more natural source of sugar and vitamins. This is leading to energy drinks being considered also for their functional benefits rather than just an energy boost.

Public health concern grows

Despite sales growth, energy drinks continues to face harsh criticism due to the products’ perceived negative impact on health. The high levels of sugar and caffeine are considered especially dangerous to children, as the mix can lead to negative cardiovascular, neurological, and gastrointestinal effects and is cited as contributing to obesity.

COMPETITIVE LANDSCAPE

Smaller brands are fresh and innovative

Monster Beverage Corp retains the largest off-trade value share of energy drinks. However, smaller brands are expected to grow even more rapidly, in both regular and reduced sugar energy drinks, because of their fresh and innovative approaches.

Growth trends among smaller brands could lead to change

Further growth is expected for Monster Beverage Corp because of the general growth of its brands and its winning position among reduced sugar brands, which are set to experience especially high growth.

Red Bull and Rockstar lose shares to Monster and new brands

Red Bull and Rockstar both continued to lose value share in 2018, as well as seeing a decrease in sales. While they are unlikely to lose their places within energy drinks in the short term, increasing diversification within the industry due to the entry and growth of smaller brands is likely to continue eating up their shares.

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