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Energy drinks market will grow, says report

By Neil Merrett , 12-Jul-2007

Beverage groups will turn more production over to high margin, functional products over the next three years, to meet the growing demand for sports and energy drinks, according to a forecast report.

The market demand is being driven by the growing consumer awareness of the need for healthier lifestyles. The market segment is expected to reach $39.2bn in value by 2010, currently led by the US where sales are expected to reach $17bn this year alone, according to the findings by Global Industry Analysts. The remainder of global demand is made up by Western European markets and Japan, which along with the US account for 88 per cent of total global consumption. The report stresses that the market is divided into two distinct categories. The first is the specialist segment of sports nutrition for professional athletes and body builders, which is already a mature market, particularly in the US where is it a specialist segment. The second is energy drinks, which through the inclusion of so called "revitalising ingredients" are becoming increasingly popular amongst both adult and children alike. As a result, the segment is expected to grow in the US by 33.7 per cent. In Europe, it is the UK and Germany that currently hold the largest markets with combined sales of $4.6 billion. France is the region's fastest growing market with 18 per cent CAGR. The potential shown by the French market will come as surprise for some analysts considering a ban imposed in the country for the Red Bull brand, which is one of the leading names in energy drinks. Japan's energy drink demand is expected to undergo moderate growth in comparison, the report added. Continued growth within the energy drink segment is expected to be driven by marketing drives designed to broaden the current appeal of the products, the report says. The existing market is generally male-orientated, with producers therefore expected to step up marketing and re-branding to attract more females to purchase its products, while also retaining an ageing customer base. As such, a growing number of manufacturers in the industry are expected to use buzzwords such as "light", "sugar-free", "low carb", on their products to entice female consumers. Greater innovation in formulation is also expected, in a bid to attribute greater health and energy benefits that can be targeted to specific lifestyles and consumer demands, according to the report.


Major players within the market are split in between two group's including beverage and health care giants like Pepsi, Coca-Cola, Danone and GlaxoSmithkline, and dedicated energy drink brands like Red Bull and Dark Dog. The market in Japan is dominated by local companies like Taisho, which produce the Lipovitan brand amongst others.

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