Energy Drinks in the US

2021 DEVELOPMENTS

“Performance” energy drinks products power ahead

Growth of the US energy drinks category over the last three years has coincided with the development of the supercharged, highly caffeinated “performance” energy category. While a typical Monster or Red Bull SKU would contain between 9-10mg of caffeine per oz, performance energy products may contain more than twice this amount.

Flavour innovation and reduced-sugar options lead the way

While demand for caffeine is certainly a major driver, the rapid pace of flavour innovation within the category has been a major contributor to its success in the US. Consumers have come to expect multiple new flavour SKUs each quarter, with seasonal launches (such as the forthcoming Red Bull Dragon Fruit Summer Edition) and creative confectionery-inspired formulations winning consumer trials.

Energy proposition expanding outside the core category

The greatest threat to long-term growth in the US energy drinks category may emerge from the successful way that demand for energy-boosting products and ingredients is increasingly satisfied by adjacent categories that would not be strictly defined as “energy drinks”. The evolution of energy from a minor category to consumer need-states across food and beverages means the category competes with new products (water, tea, coffee or confectionery) with functional propositions in many styles, flavours and formats.

PROSPECTS AND OPPORTUNITIES

Hard seltzer and other alcoholic drinks launches are possible

Energy drinks players are among the US soft drinks producers and brands experimenting with alcoholic drinks launches. In January 2022, Monster Beverage acquired CANarchy Craft Brewery Collective, a leading craft beer brewer and distributor based in Colorado, for USD330 million.

Nootropics and relaxation as alternative need-states

As the immune support positioning of Mtn Dew Energy suggests, leading energy drinks brands are now integrating functional ingredients beyond caffeine. In the case of performance energy, this frequently includes creatine and/or branch-chain amino acids (BCAA) intended to assist in muscle growth and alleviate muscle fatigue.

Natural launches to win new consumers to the category

While the energy drinks category continues to demonstrate impressive growth within the context of the mature US soft drinks market and strong loyalty among existing consumers, leading brands within the category may lack the existing products to extend appeal beyond the core. Energy drinks trade marketing and branding is clearly skewed towards a younger male demographic, and while zero-sugar options have been extremely successful in conventional channels there are few options available for natural retailers or consumers seeking cleaner labels and natural ingredients.