Niche Appeal Squeezes Energy Drink Market

Energy drinks surged to star status for many beverage producers over the past several years. Consumers with concerns about the health effects of canned and bottled soda turned to energy drinks. And the decline in bottled water sales was offset in part by consumer excitement about products with names like Red Bull and Monster. Can beverage manufacturers count on the energy drink category to capture to a larger audience and boost sales?

According to Mintel Global Market Navigator (GMN), energy drinks  cater to a niche audience. Only about  15% of consumers regularly purchase these beverages.  Other consumers hesitate to buy these energy drinks because of:

  • High prices 48%
  • Excessive quantities of caffeine 43%
  • Health concerns 43%

On the other hand, the core group of energy drink purchasers say the products have benefits:

  • Provides an energy boost 71%
  • Keeps them awake 57%
  • Enhances sports performance 23%

There are steps a beverage producer can take to generate interest in its products. Garima Goel Lal, Mintel analyst, says “Providing consumers with more flavors, less sugar and reduced caffeine content are all ways for companies to attract more customers.” Some marketers, such as Jones Soda, are using creative names like WhoopAss and bright packaging to attract the core energy drink audience which includes  “aggressive young males who play hard and party hard” according to CEO William Neissner.

Look for more creative marketing campaigns to come from this sector as businesses attempt to use energy drinks to generate profitable growth.

[Sources: Energy drink market experiences a jolt in sales. Mintel​.com. 11 Aug. 2010. Web. 23 Aug. 2010; Allison, Melissa. Jones Soda seeks to rev up its energy drink. SeattleTimes​.com. 13 Aug. 2010. Web. 23 Aug 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.