Energy drinks market is expected to gain from product diversification

The demand for energy drinks is increasing. There has been a sharp increase in the demand for coffee, dairy juice and other beverages as consumer’s stockpile on essential products to sustain them during quarantine period amidst the prevailing COVID-19 crisis.

Consumers prefer products that come from natural sources and are vegan, GMO-free, organic, and have other clean label attributes. Their focus on holistic living and wellness is a key factor driving the energy drinks market. Consumers are determined to mark more purposeful choices with their buying power, purchasing with intention of creating positive and valuable experiences, which is supporting the expansion of the market.

It has been found that the consumers are in favour of beverages that contain natural ingredients and added antioxidants, vitamins and minerals. In energy drinks, fruit concentrates are added which offer several health benefits. A rising awareness of this will fuel the demand for energy drinks in the coming years.

Manufacturers in the market are expected to focus more on their offerings and make them healthier due to increasing concern about sugar content among consumers. Besides this, innovation in flavour is enabling growth in the flavoured drinks category of the energy drinks market, says a report analyst.

Key takeaways from the energy drinks market study

  • The energy drinks market is estimated to be valued US$ 203.6 Bn in 2020, registering a CAGR of 7 per cent between 2020 and 2030.
  • Europe is forecast to account for the leading market share in the global energy drinks market in terms of value sales by 2030 owing to the ever rising consumption of healthy beverages in the Europe region.
  • Demand for ready to drink energy drinks will rise in the coming years.
  • Companies are focusing on augmenting their business presence in developing countries. They are focusing on geographical expansion. In addition to this, companies are entering into strategic alliances across the globe via acquisitions, mergers and partnerships.

Who is winning?
A few of the companies operating in the energy drinks market are Red Bull, Monster Beverage Corp., Kraft Foods, Nestlé, The Gatorade Company, PepsiCo, Suntory Holdings, Rockstar, Arizona Beverage Company, Sinebrychoff, HYPE Energy, Living Essentials, Zipfizz Corporation, Asia Brewery, Unique Beverage Company, Bomba USA, Vital Pharmaceuticals, NEALKO ORAVAN, spol. s r.o. (Black Hoarse), Xyience Energy Drink, Energy Beverages, and others.

Producers of energy drinks are regularly offering consumers with more innovative products including unique ingredients and flavours. Innovation in energy drinks is intended to meet the evolving consumer demand for healthier beverages without compromising on the taste, flavor, texture, and nutritional qualities of the product.

  • In April 2019, PepsiCo launched PepsiCo’s Propel Vitamin Boost, which contains vitamins and electrolytes. The product contains daily recommended values of vitamin B3, B5, B6, C, and E. It is available in three flavors- peach mango, apple pear, and strawberry raspberry.
  • In 2015, Unilever signed a partnership agreement with JD.com, China’s largest online direct sales company, which is expected to help the company to expand its presence in China through JD’s extensive online sales platform

Australian energy drink, Kanguru, expands into Korea

Australian-owned energy drink Kanguru has announced it will launch into South Korea later this year alongside the appointment of David Westall to the key position of President for the Asia Pacific Region.

Kanguru is a high performance clean smart energy plus vitality drink that is better for you, created by Australian medical specialist, Dr David Kitchen.

Kitchen, chairman and CEO of Red Kangaroo Beverages Australia, which produces Kanguru, said he was delighted to officially welcome Westall to the team.

“We started exploring overseas opportunities and chose South Korea as our first country to launch into,” he said. “Since December 2018 we’ve had the privilege of working with David as an advisor and board member. His breadth of knowledge and experience within the category, and across both the Australian and Asian marketplace, is unsurpassed.”

Westall has had more than 20 years’ experience working with world-leading brands such as: Coca-Cola, Minute Maid, Pepsi Cola, Hershey, Evian, Schweppes, and many other trusted household beverage and food brands.

“His experience includes the development and introduction of numerous innovative new brands, across many regions in multiple beverage and food categories including energy drinks, soft drinks, water, fruit juice, sports drinks, confectionery, dairy products, snacks and tea. I’m excited by how his experience will help facilitate the continued growth and development for Kanguru,” Kitchen said.

Westall said he was excited to join the team and that he believed this product was extremely unique, delivered on its promise, and would redefine the category.

“I’m confident Kanguru will rewrite what is ‘acceptable’ for people to consume as a real energy drink,” he said. “I’ve studied and tested the science that has gone into the creation of Kanguru and quite simply it does what it says – it doesn’t cause harm, but enhances your mind and body, enabling you to get more out of life. It has a substantial amount of evidence-based ingredients and it has a wonderful citrus taste. This product will redefine energy drinks and functional beverages.”

Westall said that Kanguru’s Korean launch date was marked for early September. “There are more than 10,000 convenience stores ready to take their first shelf stock of Kanguru,” he said. “The Korean team are busy signing listings with many other retail sales channels including supermarkets, cafes, gyms, universities, highway petrol stations and online markets.”

Westall said his first priority would be growing distribution and consumer marketing  regards to the unique and high-quality innovative formula of Kanguru.

“We firstly need to ensure that our clients and customers are educated, understand and believe in our product,” he said. “My focus in the short term will be Australia and South Korea, followed by plans to expand throughout Asia and onto the rest of the world.

“I am very motivated to leverage my experience, knowledge, skills and global network to ensure Kanguru, the first and only Australian energy drink, is available to all consumers who are looking for a clean solution to their daily energy and vitality needs. I look forward to working with our Australian and international teams and can’t wait to get started.”

Westall’s stellar career in food and beverage includes: Managing Director Coca Cola Amatil New Zealand andb Fiji (2000-2003), President Coca Cola Korea Bottling Company (2003-2005), and more recently, executive chairman of RG Brands – the Pepsi/Lipton bottling partner and leading food and beverage manufacturer in
Kazakhstan, Central Asia (2009-2015).

Regular energy drink use linked to later drug use

Young adults who regularly consume highly caffeinated energy drinks could be at risk of later cocaine use, according to a study by the University of Maryland School of Public Health.

The study, published in the journal Drug and Alcohol Dependence, looked at young adults aged between 21 and 25, across a five-year period.

The study’s leader, Dr Amelia Arria and colleagues with the Center on Young Adult Health and Development (CYAHD) found evidence that individuals who regularly consumed highly caffeinated energy drinks, and sustained that consumption over time, were significantly more likely to use cocaine, nonmedically use prescription stimulants (NPS), and be at risk for alcohol use disorder (AUD) at age 25.

Participants were recruited for the study while enrolled as college students, and were surveyed at regular intervals to track changes in various health and risk-taking behaviors, including energy drink consumption and drug use.

“The results suggest that energy drink users might be at heightened risk for other substance use, particularly stimulants,” said Dr Arria, associate professor of behavioral and community health and CYAHD director. “Because of the longitudinal design of this study, and the fact that we were able to take into account other factors that would be related to risk for substance use, this study provides evidence of a specific contribution of energy drink consumption to subsequent substance use.”

Previous research by CYAHD researchers has documented the relationship between energy drink (ED) consumption and high-risk drinking behaviors, as well as the likelihood of other accompanying drug use, but this study is the first to examine the unique effect of different trajectories of ED consumption on likelihood of later substance use.

Notably, more than half (51.4 per cent) of the 1099 study participants fell into the group with a “persistent trajectory,” meaning that they sustained their energy drink consumption over time.

Members of this group were significantly more likely to be using stimulant drugs such as cocaine and prescription stimulants non-medically and be at risk for alcohol use disorder at age 25. The research singles out ED consumption as the contributory factor because they controlled for the effects of demographics, sensation-seeking behaviors, other caffeine consumption, and prior substance use at age 21.

Those in the “intermediate trajectory” group (17.4 per cent) were also at increased risk for using cocaine and NPS relative to those in the “non-use trajectory” who never consumed energy drinks (20.6 per cent). Members of the “desisting trajectory” group (those whose consumption declined steadily over time) and the non-use group were not at higher risk for any substance use measures that were tested.

While the biological mechanism that might explain how someone who persistently consumes energy drinks might go on to use other stimulant drugs remains unclear, the research indicates a cause for concern that should be further investigated.

 

Energy drinks could be fatal for some – research

A world-first study has found that having just one to two energy drinks could be life-threatening for some young people with no known history of heart disease.

The study, published in the International Journal of Cardiology, found that people born with a genetic cardiac rhythm disorder called Long QT Syndrome are at higher risk of dangerous heart rhythms, or even death, after consuming energy drinks.

About one in 2000 people has Long QT Syndrome but many are unaware until they undergo an ECG or a relative dies suddenly at a young age. For some patients with Long QT Syndrome, the first symptom is sudden cardiac death.

The study was conducted at Royal Prince Alfred Hospital in Sydney over two years and involved 24 people with Long QT Syndrome aged between16 and 50.

Patients were given energy drinks or control drinks over a 90 minute period, while undergoing continuous monitoring as well as regular ECGs and blood samples.

“We found patients had a significant increase in their blood pressure of more than 10 per cent after the energy drinks, which was not seen in the control group,” Royal Prince Alfred Hospital cardiologist and Centenary Institute researcher Dr Belinda Gray (pictured below) said.

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“Additionally, while none of the patients in the study experienced dangerous arrhythmias, we did identify dangerous ECG changes in some patients; 12.5 per cent of patients showed a marked QT prolongation of 50 milliseconds or more.

“For ethical reasons, we could only give patients in this study low doses of energy drinks but, the reality is, many young people will consume four or more energy drinks with alcohol in one evening. These drinks are widely available to all young people.”

Professor of Medicine at the University of Sydney and RPA cardiologist Chris Semsarian said it was still unknown whether a specific ingredient in energy drinks was responsible for ECG changes, or a combination of ingredients.

“But, because many young people do not even know they have familial Long QT Syndrome, we have to caution against anyone consuming these drinks,” he said.

While small, the study was robust as the patients acted as their own controls with each consuming both energy and control drinks on separate occasions with at least one week washout, Professor Semsarian said.

Schoolies risking health with alcohol and energy drink mix: report

Young people are fuelling big nights out by drinking alcohol mixed with energy drinks to help them party through the night, according to a new Victorian government report.

The VicHealth report found that people who mix their alcohol with energy drinks are also more likely to be problem gamblers, show other risk-taking behaviour such as heavy alcohol use or illicit drug use, and report more mental health problems.

Executive Manager Dr Bruce Bolam from VicHealth, which funded the studies, said while overall levels of consumption of these products was relatively low compared to beer or wine in the wider population, in young people the level of consumption was very high.

“Alarmingly over one-third of Deakin University students included in one survey reported energy drinks mixed with alcohol being consumed in the past three months,” he said.

“Clearly a lot of the research identified that people consume energy drinks mixed with alcohol to either get a night started or to keep going and also to mask the effects of intoxication.

“Unfortunately the evidence shows this leads to significantly higher levels of intoxication, risk-taking and potential harm.”

Among school-leavers celebrating in Lorne and Torquay on the Victorian coast, 16% of schoolies surveyed said they had drunk alcohol mixed with energy drinks in the past 12 hours.

The study also found one in five 18 to 24 year-olds and one in ten 25 to 39 year-olds reported drinking alcohol mixed with energy drinks in the past three months.

Concerns about heart health

Chris Semsarian, a cardiologist and professor of medicine at the University of Sydney, who as not involved in the study, said the health and medical implications of young people drinking large volumes of energy drinks, with or without alcohol, was a concern.

“There is growing evidence that energy drinks, either alone or mixed with alcohol, can lead to serious cardiovascular effects, including increases in blood pressure, heart rate, life threatening rhythm abnormalities, and even cardiac arrest and sudden death,” he said.

VicHealth’s Dr Bolam said policymakers need to consider that the mix of alcohol and energy drinks is volatile, particularly at night.

“Price, availability and promotion of these products needs to be considered in policy-making.”

Professor Sandra Jones, director of the Centre for Health and Social Research at the Australian Catholic University, who was not involved in the study, said:

“The research we’ve done in my team has been with quite young people – high school students and university students – and what we’ve typically found is that they consume these products to help them stay awake and keep drinking. It’s the ‘life of the party’ motive.”

Packaging and image play a role

Professor Jones said the packaging and the image of the products also appealed to high school students as it wasn’t immediately obvious to adults that the prepackaged products contained alcohol.

“They also know the taste of energy drinks already and are comfortable and familiar with the product,” she said.

“One of the very sensible suggestions in the report is around restriction on their sale in night-time entertainment precincts after certain times; those sorts of strategies are certain to have more of an impact than telling people ‘don’t drink this because it’s bad for you’,” Professor Jones said.

The researchers carried out six separate studies over three years to look at the pattern of drinking in young people.

Their research included watching pub goers across five Australian cities, conducting online and phone surveys, interviewing school-leavers in the street at schoolies events, analysing ambulance data and interviewing 25 young people who drank alcohol mixed with energy drinks.

The Conversation

Jocelyn Wright, Editorial Intern, The Conversation

This article was originally published on The Conversation. Read the original article.

Gatorade launches its world-first liquid concentrate

Gatorade is revolutionising hydration options for Australians with the introduction of new Gatorade Liquid Concentrate, a thirst-quenching and easy source of hydration for athletes.

Available in Woolworths, the 1 litre Gatorade Liquid Concentrate is available in two flavours – Blue Bolt and Lemon Lime – and will make 5 litres of Gatorade by adding water.  It is on shelves in Woolworths, and will be rolled out with other independent retailers over the next few months.

This launch is backed up with digital advertising, out of home, a social media campaign and a range of in-store activations and display support.

“Gatorade Liquid Concentrate is a world first for the brand and it’s going to change the way teams and individuals hydrate to ensure they perform at their best. This product has all the Gatorade benefits in a new convenient format, with the backing of over 50 years of scientific research,” said PepsiCo Australia & New Zealand Senior Director Franchise Beverages, Brad Van Dijk.

 

Pink grapefruit & mint natural energy drink

Level Beverages has added 28 BLACK – Pink Grapefruit Mint as the newest addition to their taurine free collection of energy drinks.

Hitting the shelves in September, this flavour not only looks and tastes great but will also give back to the community, with 10 cents per can sold being donated to the McGrath Foundation, the charity which raises money for Breast Care Nurses.

According to the company, the product is a premium and less synthetic energy drink, a better for you alternative. Key differences between 28 BLACK and other energy drinks on the market include:

  • Taurine free
  • Natural caffeine
  • No preservatives
  • No artificial colours
  • Gluten free
  • Vegan friendly

“What’s even better than the delicious pink grapefruit and mint combination is the fact that 28 BLACK energy drinks are free of preservatives and artificial colours! The drinks also don’t contain the amino acid Taurine – this is great because some people can experience nasty side effects when Taurine is combined with caffeine and sugar in energy drinks. It’s true, not all energy drinks are bad for you,” commented Nutritionist Heidi Meyer.

 

Caffeinated water brands aim to take share as demand for functionality grows

Bottled water volumes continue to rise at the expense of carbonates. There is rising demand for beverages that offer functionality but without artificial ingredients and little or no added sweeteners. Viewing this as a “white space” opportunity, a number of companies have recently launched or relaunched caffeinated water in the US to target consumers looking for healthy and natural functional drinks. Caffeinated water joins other products such as electrolyte-enhanced water, protein-enriched water, and vitamin-enhanced water in the small but rapidly growing functional bottled water category.

The growth in products marketed as “water” reflects changing consumer sentiment. Consumers want the purity and simplicity of water and the benefits of functional drinks. Going forward, caffeinated water may have a chance to take some share from sports drinks and low calorie cola carbonates, as well as to attract older energy drinks consumers. Though these companies are currently focused on the US, there may be opportunities for caffeinated water to succeed in other parts of the world including Asia Pacific. In China, caffeinated water may be able to gain a presence by focusing on the energy-boosting aspects of caffeine to compete against carbonates and juice drinks.

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CAFFEINATED WATER AS REPLACEMENT FOR LOW CALORIE COLA CARBONATES

Among the consumers targeted by caffeinated water producers, regular drinkers of low calorie cola carbonates appear to be the biggest group in the US. Industry observers state that many drinkers of low calorie carbonates are avid users, consuming it several times, both in the morning and as an afternoon pick-me-up. The media has increasingly focused on low calorie carbonates by questioning the safety of artificial sweeteners and citing studies linking weight gain with low calorie carbonates consumption. Negative reports about low calorie carbonates have led to their continuing decline in the US despite initiatives such as PepsiCo removing aspartame from Diet Pepsi and replacing it with sucralose and acesulfame potassium in August 2015, and the November 2014 launch of mid-calorie Coca-Cola Life with stevia. Many of these diet carbonate drinkers are believed to be switching to bottled water to improve their health. Hint Water CEO Kara Goldin has said that, “Most of our customers are on to health concerns about sweeteners, telling us that they have definitely moved away from diet sodas.” By offering the energy boost of caffeine to water and positioning itself as a healthy functional beverage, caffeinated water has the opportunity to take share from diet carbonates.

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AN ENERGY BOOST FOR OLDER CONSUMERS

Energy drinks continues to be the fastest-growing category in global soft drinks, with off-trade volume sales growth of 9% in 2015. Makers of energy drinks have been able to attract young consumers through sports and music marketing and the offer of functionality to improve mental and physical performance. However, energy drink companies have generally not been successful in reaching older consumers who turn to coffee, cola, or energy tonics when they want an energy boost. By offering a caffeine boost minus taurine and artificial flavours and sweeteners, caffeinated water may hold appeal for older consumers. Avitae USA LLC CEO Norm Snyder said that Avitae caffeine + water’s third leading consumer group is older energy drinkers. He said that “As you get over 24, you get more concerned about health”. Among older consumers, caffeinated water may have growth potential in the workplace. Speaking about the company’s Water Joe caffeinated water, Andrea Mace, Premium Waters Regional Sales & Marketing Manager, said she has seen “increased interest in our products from technology industries”. Gaining access to the office market is likely to be challenging as most offices in the US already offer free coffee and tea. But in technology and sales companies, caffeinated water may hold appeal because of speed (no need to wait for coffee to brew) and smell (no coffee breath).

CAFFEINE FOR SPORTS ENHANCEMENT

Coconut water sales have grown rapidly and outperformed other juices in the US and beyond as producers have been able to successfully market it as nature’s sports drink by emphasising its naturally high electrolyte content with no added sugar or preservatives. With the rise in the popularity of athletic activities such as spinning and yoga, caffeinated water may be able to gain some of these active consumers, especially women, who may not have related to sports drinks marketing or who were put off by its sugar and caloric count. Sports drinks have historically targeted men by featuring male athletes such as Michael Jordan. Caffeinated water producers state that one of their main consumer groups is people who work out. Avitae’s Snyder says that “Caffeine is becoming a popular pre-workout supplement for people that work out.” Hint Water’s Goldin stated, “A number of athletes drink Hint Kick, before a tennis game, before playing basketball.” Some studies have shown a link between caffeine consumption before a workout and enhanced athletic performance. However, drinking coffee before exercise is not a common ritual because it takes time to brew and drink hot coffee. Caffeinated water offers the advantage of zero or few calories, no or minimal amount of sweeteners, and no artificial colours and flavours.

STRONG DEMAND FOR FUNCTIONAL BOTTLED WATER IN CHINA

As health awareness and concerns about obesity and sugar consumption increase worldwide, more consumers are expected to look for healthier beverages. Some countries in Asia Pacific including China could be receptive to the idea of caffeinated water as a healthier alternative to carbonates and juice drinks with less or no sweeteners and no artificial ingredients. Euromonitor International’s December 2015 article on Get Moving! Consumers and Exercise in the Asia-Pacific Region talks about the rise of obesity in the region as well as how fitness fever has hit Chinese women. Hectic lifestyles, growing health awareness, and a rise in disposable incomes are benefiting sales of all functional beverages in China including functional bottled water. Driving the growth is Groupe Danone’s Mizone vitamin-enriched water with 15% off-trade volume growth in 2015. Mizone’s success ties into the new trend of emerging refreshing drinks in China which offer lighter taste profiles. In a sign of potential growth opportunities in Asian functional bottled water, the private investment arm of Hong Kong business magnate Li Ka Shing, reportedly the richest person in Asia, announced a strategic investment in US-based Agua Brands. His Horizons Ventures invested in the maker of Agua Energy Water (a caffeinated water made with caffeine from the guarana berry) and Agua Fruit Essence (an electrolyte-enhanced water). The October 2015 press release announcing the deal stated that “The investment will kick-start Agua’s international expansion plans, beginning in Asia – the perfect launch market to introduce a healthier pick-me-up energy beverage.”

33.jpgFUTURE PROSPECTS

As sales of low calorie cola carbonates are expected to continue their decline globally over the forecast period, other beverages will take its place. The future of functionality is likely to be a growing interest in “natural” hydration where beverages offer the simplicity of water (no artificial colours, flavours, or preservatives) with functional benefits. PepsiCo’s January 2016 announcement of an upcoming organic version of Gatorade sports drink in the US reflects the change in consumer sentiment towards more natural beverages amid growing competition from “plant water” such as coconut water and electrolyte-enhanced water. In the years ahead, there is likely to be a growing convergence between bottled water, juice, and sports drinks.

Virginia Lee is a Senior Beverages Analyst at Euromonitor International. Read the original article here.

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