Our Changing Energy Routine: Global Energy Drinks, Caffeine and Energy-Boosting Products

Strategy Briefing

About This Report

Feb 2018

This report explores the changing energy drinks category, which remains one of the fastest growing areas of the global soft drinks industry. Energy drinks are placed in the context of wider, increasingly diverse demand for energy-boosting beverages, foods and supplements. What are the regional preferences for caffeine and other energy-boosting products, and how are consumer preferences for such products changing?

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Our Changing Energy Routine: Global Energy Drinks, Caffeine and Energy-Boosting Products

Energy drinks is a maturing category

Energy drinks has been one of the top performing non-alcoholic drinks categories over the past decade in beverages, but has matured considerably in recent years. While consumer demand for energising beverages, supplements and foods remains strong, changing consumer ingredients preferences and new regulations have created a need for a more diverse, high-value mix of products in the energy space.

Winning new, unfamiliar consumers to the category is key

The evolution of the energy drinks category may involve a change in positioning and rethinking ingredients in order to sustain growth. This report explores some of the functional carbonates, RTD teas, RTD coffees, functional waters and other adjacent energy products (like consumer health supplements) that compete for consumers’ energy demands throughout the day.

Standouts in the global mix of energy products

In considering the wide geographic mix of “energy” products, preferences include instant coffee in Eastern Europe, traditional ginseng in China, premium coffee pods in Western Europe and healthier, premium fresh hot coffee and cold brew in North America.

Focus on ingredients: achieving the“natural” boost

Natural caffeine sources, beginning with coffee and extending to regional favourites, like yerba mate, guayusaor emerging ingredients like yaupon, are being included in high value, wellness positioned energy product launches across markets. Improved sourcing and formulation (including organic ingredients) may be required to re-establish the health credentials of functional energy drinks.

Introduction

Scope
Key findings
What else can an energy drink be?

Energy Drinks Today

The evolution of energy
Growing pressure for productivity sustains energy demand
Red Bull and Monster still dominate the energy drinks category
US and China lead energy drinks sales in 2017
Growth continues, but energy drinks is a maturing category
Finding a new audience in a category linked to Gen Y growth
Energy drinks marketing may miss demographic growth segments
Taxation and regulation come down hard on energy drinks
Energy drinks heading into 2018

How Do We Get Our Energy?

Sources of energy from consumer packaged goods
A broader mix of energy-boosting products throughout the day
Illegal/illicit consumption of stimulants is also on the rise
Caffeine consumption: Cola remains a primary source in soft drinks
Global retail energy mix in 2017: Beverages top consumer spending
What’s our energy drink of choice?
Where do we purchase our energy products?
Energy as a routine favours subscription models and e-commerce

Regional Energy Preferences

Estimated retail energy spending by region in 2017
North America: Cola, coffee and energy drinks are established
In the US, reduced sugar energy thrives even as diet sodas decline
Mountain Dew Kickstart creates a US energy-juice hybrid category
NACS Show 2017: Mainstreaming alternative energy in the US
In Western Europe, hot drinks still outperform soft drinks for energy
Coffee pods: Europe’s preferred caffeine source in the home
Improving energy ingredients to extend category appeal
In Asia Pacific, RTD coffee and tea are primary energy sources
Per capita volume demonstrates the dominance of hot tea in Asia
A boom in cafés and chained coffee shops in Asia Pacific
Chinese ginseng and Japanese functional tea as natural energy
In Latin America, energy drinks are undeveloped relative to cola
Latin America is a great test market for functional “energy” cola
Discount energy drinks take share in Latin America
Mate and tea-based emerging alternatives to coffee
Eastern Europe: Instant coffee as the caffeine source of choice
Premium innovation supports Russian instant coffee growth
MEA: Cola and low-priced hot drinks dominate the energy occasion
Saudi and UAE taxation threatens the energy drinks category
Australasia: High per capita RTD coffee use, but not for energy
Media attention leads to focus on energy ingredients in Australia

Forecasts

Drive for natural energy fuels use of alternative ingredients
Consistent growth forecast across energy-boosting products
Facing the future: Where is “energy” heading?
Three paths of future development in energy