Energy drinks go natural
A new report* from Business Insights finds that energy drink manufacturers are jumping on the health bandwagon and introducing natural ingredients to their beverage range. Recent innovations have led to a shift from stimulant, instant boost energy drinks, such as Red Bull, to a more sustainable, longer lasting energy lift which is obtained through the use of natural ingredients.
The energy drinks market continues to offer significant growth opportunity and is expected to grow at a CAGR (compound annual growth rate) of 4.5% in Europe to 2011 to reach $5bn. Within the region, the Italian market will experience the fastest rate of growth at 10%, followed by Sweden (7%).
According to Productscan (the world’s largest database of new consumer packaged goods), of all sports and energy food and drinks launched globally in 2007, 7% claimed to be natural and 12% claimed to be high in vitamins. These products contain ingredients such as oats and ginseng (a well established energy provider) and more novel superfruits such as açaí and goji berries.By formulating drinks with such ingredients, manufacturers are not only able to make a natural claim; there is also the added benefit of positioning the product as an everyday soft drink, targeted at consumers looking for vitality and wellness benefits. Sports drinks in the US, such as Gatorade, are consumed for general wellbeing and hydration, not just for sporting activities, and manufacturers in Europe have the opportunity to tap into this trend – according to Business Insights.
An example of the trend was the March 2007 launch of Volvic Revive Energy Drink by Danone Waters in the UK. Volvic Revive is a flavoured water formulated with no added sugar and contains stimulating plant extracts such as ginseng and guarana. Business Insights report that the product meets consumer needs for hydration, due its association with water, as well as delivering an energy boost through the incorporation of natural ingredients such as guarana.
Natural will continue to grow in importance in food and drinks as consumers become increasingly concerned of additives and unnatural preservatives. Energy drink manufacturers are developing brands to target this opportunity, by appealing to consumer concern for ‘better for you’ products. However, as the Danone example highlights, this product differentiation and movement into more mainstream markets means that there will be further competition from other soft drink manufacturers as they attempt to gain a greater share of this growing market.