Australia and NZ’s ‘unique’ energy drinks markets

Posted by AFN Staff Writers on 22nd May 2013

Both Australia and New Zealand have built a “strong self-contained” soft drinks industry, with specific product, brand and packaging preferences, according to research from global beverage market research organisation Canadean.

Energy drinks in particular are a growing sector in Australia and New Zealand. Canadean said that energy drinks volumes have more than quadrupled across Australia and New Zealand in the past ten years, and continue to expand, albeit it at a lesser rate.

According to Canadean, sustained consumer interest and new consumption occasions, coupled with a broadening of product variations, and supported by image focused marketing, are continuing to drive the category. As a result, Canadean predicts that demand for energy drinks in Australia and New Zealand will exceed 220 million litres by 2018.

Canadean said its research shows that while most soft drinks in both Australia and New Zealand are produced locally, imported energy drinks total nearly 100 million litres a year, including trade between the two countries.

Most popular brands ‘home-grown’

Even though energy drinks are the main imported beverage in Australia and New Zealand, two of the most popular brands are home-grown.

Canadean said its research reveals that V, which is produced by Frucor Beverages, a subsidiary of Suntory Holdings, accounts for more than a third of total energy drink volume sales across Australia and New Zealand. Mother, which is owned by Coca-Cola, is also one of the top sellers. Yet Canadean said both V and Mother are largely unknown elsewhere in the world.

Drink size in Australia and NZ unique

According to Canadean, the Mother brand was instrumental in the growth of a new trend in energy drink size – one almost unique to the Australian and New Zealand markets. The 50cl container size already existed, but its popularity was cemented with the re-launch of Mother in the 50cl can in 2008.

The 50cl can is now responsible for two-fifths of the category’s volume sales across Australia and New Zealand, which is slightly more than the contribution made by the more internationally recognised 25cl size can.

Canadean said the 50cl can is still “in its infancy” globally, being responsible for less than 5 per cent of energy drinks volumes worldwide.

Packaging trends

Another popular pack for energy drinks in Australia and New Zealand has been the single-serve non-refillable glass bottle, according to Canadean. In recent years, the glass bottle has declined in popularity because of a move towards larger-sized packs, but it is still responsible for 15 per cent of the market share, which is higher than the international norm. Canadean said it believes the popularity of glass bottles reflects a seasonal shift in favour of bottles over the summer months when Australiasian consumers are outdoors more and prefer the convenience of resealability.

Screw cap glass bottles are most favoured by female drinkers, according to Canadean. The launch of sugar-free versions of both V and Red Bull in 2003 is believed to have encouraged the use of glass bottles among diet-conscious female consumers. According to Canadean, sugar-free energy drinks currently hold about a 7 per cent category share across Australia and New Zealand, which is slightly above the global average, but does not represent a growth from 2003 levels.

“Clearly most target consumers in an age range of 18-35 are more interested in the energy boost provided by these beverages and not so concerned with calorie control,” Canadean said.