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Chill out: anti-energy drinks make moves in Oz

Growth in the non-alcoholic beverages market has been dominated by energy drinks in recent years, and while there’s no sign that this will dissipate any time soon, an ‘anti-energy drink’ segment is gaining traction. Danielle Bowling reports.

The beverages market in Australia is dominated by a few big players, which year after year pump out new and innovative products that are almost always snapped up by the big retailers.

Energy drinks including Red Bull, Mother and V, have dominated growth in the non-alcoholic beverages market in recent years, but Geoff Parker, CEO of the Beverages Council of Australia, says this growth needs to be put into perspective.

“Certainly there has been an increase in their popularity, but it needs to be put into context,” he told Food magazine. “They’re coming off a very low base and energy drinks as a sub-category of the total non-alcoholic beverages category only represent 2.5 percent of the total category. Have they increased in popularity? Absolutely. Do they have aggressive marketing? Absolutely. But again, they’re only 2.5 percent of the total category.”

In regards to the most significant trends in the industry, Parker says the two stand-out performers have been energy drinks and iced teas, which have experienced strong year on year growth for the past couple of years of 10 percent and 12 percent respectively. Vitamin waters have had a small percentage of growth, and bottled water has experienced approximately eight percent growth year on year.

“We’re certainly seeing a significant trend towards what we broadly call low or no kilojoule soft drink options and that’s also being reflected in a trend of consumers [moving] away from full kilojoule options. You just have to look in any convenience store fridge or petrol station fridge or supermarket aisle to see the influx of low and no kilojoule varieties. Today, three out of the four top selling soft drinks (Coke, Diet Coke, Coke Zero and Pepsi Max) are low and no kilojoule options, so consumers are clearly getting the message, and industry and manufacturers are responding by providing a greater range,” he says.

It can’t be denied, however, that the energy drink segment has been the victim of a fair amount of bad press over the years, with most criticisms surrounding the drinks’ sugar and/or caffeine content and the consequences of overconsumption.

While Parker believes these criticisms are misguided, he says an opportunity in the beverages market has opened up for manufacturers wanting to offer an alternative to energy drinks.

Relaxation or ‘anti-energy drink’ products are gaining traction in the industry, with brands including bChill, Koala Karma and Everyday Sunday.
And while their growth doesn’t exactly rival that of their energy drink counterparts, there are a growing number of brands launching products in this new market, Parker says.

“There have been a number of small niche brands enter this space, predominantly over the last 12 to 24 months. Whilst it is still early days for the segment and volumes are still relatively small, any increase has the potential to be significant and growth of 200 to 500 percent could be achievable for the right product in the right space at the right time.

“The increase in products into the market in recent times signals a possible gap that niche brands are looking to fill. Certainly in today’s fast paced world there are a myriad of products that suit that lifestyle, but for others who are looking for the opposite of an energy or caffeine boost, the relaxation beverage provides a unique fit to a way of life or time of day when people are looking to slow down and take things a little easier,” he says.

On the market
Rockwell Beverages Company manufactures Everyday Sunday, a relaxation beverage launched in 2013. The product targets university students and comes in three flavours: Citrus Crush, Tropical Punch and Berry Bliss.

“The ingredients are all natural, so the main relaxing ingredients are chamomile, valerian, passionflower and rose hip puree – and then there’s a little bit of Stevia as a sweetner and a little bit of sugar as well. So there are no artificial preservatives. It’s marketed as an all natural relaxation drink,” says Amanda Chase, managing director of Rockwell Beverages.

Chase says she strongly believes that relaxation beverages like Everyday Sunday are becoming more popular because consumers are increasingly aware of the health concerns surrounding not only high levels of stress in our population, but also of sugary beverages and energy drinks.

“[The Everyday Sunday concept] came about from the levels of anxiety and stress that are out there. People are becoming more and more aware of the impacts of this stress on society as a whole, so instead of all the caffeinated drinks with loads of caffeine and loads of sugar in them, Everyday Sunday is really an alternative, to make you feel the opposite of what an energy drink makes you feel. So this makes you calm and relaxed and keeps you steady rather than having you crash and burn, which is what energy drinks do,” she says.

“I certainly think there’s a bit of an anti-energy drink movement [happening], but I also think that if you look at the beverages segment in Australia, the growth areas are really water and teas, so it’s really about healthy living. People are becoming much more aware of what they’re putting into their bodies and I think they’re just aware that carbonated soft drinks and energy drinks aren’t necessarily the best thing to be consuming loads of. There’s certainly a shift from those drinks to a slightly healthier version.”

Koala Karma is a similar product which also launched last year. Its ingredients are valerian root, passionflower powder, hops extract, chamomile, triptosane and magnesium.

“Everyone that tastes it loves it, and while we don’t make any claims on the can, most people say that it has an effect, and a lot of people who’ve said they can’t sleep, they take it at night and they can sleep,” says Jaime Turner, who manufactures Koala Karma with Cheryl Stewart from functional food manufacturer, Morlife.

“What we’ve done with our product is make sure the herbs are as strong as what they legally can be to actually have an effect. I know of some other products that pasteurise the herbs, but basically when you do that you burn off all the goodness and the effect that the herbs have.”

Both Chase and Turner say one of the biggest challenges they’ve faced since launching their products is having to compete with the likes of Coca-Cola Amatil and Lion.

“It’s very hard to be a start-up firm when you’re against the likes of Coke and Schweppes and so forth. So what we really need to be strong with is our brand. So if we can’t spend the money to educate people about what the relaxation segment is and the functional benefits of it, we really need to appeal to people’s love of brands. So we’ve created this great looking can with a great brand association of being very relaxed and having a really relaxed attitude, so that’s how we’re going to sell it. That’s our persona online, that’s what the cans look like. It’s retro, relaxed and has a cool, healthy lifestyle feel,” says Chase.

When Food magazine spoke with Chase, Everyday Sunday was currently just sold in Melbourne but was in the process of launching nationally, targeting the convenience market and service stations, then ultimately hoping to crack into the supermarket duopoly.

But this is no easy feat, says Jaime Turner. At the moment Koala Karma is found in a number of small supermarkets like IGA, in various cafes, restaurants, convenience stores and even tattoo parlours, but both Turner and Chase agree that getting onto supermarket shelves would make all the difference.

“We want Koala Karma to be accessible, so we’re talking to certain distributors to get it out into the convenience and impulse market. We would obviously like to get it into the supermarket line too because we’ve found that …  if it’s in supermarkets then people have the perception that it’s a bigger brand and they’ll be more likely to buy it from a café, which is quite strange. The importance of being in those bigger brands is that it actually gives you more sales in the smaller stores.

“I’d just love for it to actually be a mainstream drink. Years ago, energy drinks were never mainstream, now they are. Ultimately, that’s what our goal is.”

 

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