Market research company Mintel describes the sports/energy drinks market as “the true success story of soft drinks over the past 10 years” because it has not been derailed by the economic slump. Indeed the market was expected to exceed the pound;1bn barrier last year and Mintel reckons it will be worth more than double that by 2016.
Red Bull trade communications manager Tom Smith believes there are some big opportunities for further sales growth in cash and carries/wholesalers by adapting range and space to fit the current landscape in the market.
“Soft drinks are the most frequently purchased category for retailers in depots and make up 18% of a retailer’s basket spend (him research amp; consulting). As sports and energy is the largest category within this, and the fastest growing, depots should look at their fixtures to make sure they’re reflecting this. Many depots haven’t re-layed fixtures for a number of years which could mean they’re missing out on sales by not giving enough space to the best-performing categories.
“It’s also recommended that they look at how much space they are giving each SKU. One hundred and eighty three products registered sales in the past 12 months, however over 50% of sales comes from just eight SKUs. Depots should consider the value each SKU is delivering to their business and help retailers understand which products are must stocks by making core range recommendations. Value to the category is being driven by the market leading, branded products but there is a role for value brands too. However, depots should consider the interests of their customers by supporting the brands that drive good cash margins and profits and not trade customers down into cheaper alternatives.”
Smith says availability is also key, as him research found that 23% of retailers failed to buy an intended item in depot with 12% of this being soft drinks, so reviewing fixture space could help.
Prices of energy drinks vary widely and according to Mintel price can be a barrier to purchase for some consumers. Simon Gray, managing director of Boost Drinks, says: “As the original value brand in the market we feel confident that we have a strong position.
“There has been an increase in the number of value option and own-label energy drinks which has partly come about through the tough economic climate. But, as a brand that has been established and successful for 10 years, wholesalers know they can trust Boost to deliver for their customers in terms of quality, value, keeping in touch with trends and driving consumer awareness.
“We know it’s a crowded market so understanding what our consumers and customers want and responding to that is essential to the success of our Features > Business, as is our great value, great taste proposition which is what our ‘It’s a no brainer’ campaign message is all about.”
Last year was a ‘great one’ for growing Pussy Natural Energy’s wholesale distribution network says founder Jonnie Shearer.
“Since January 2011 we have brought on board AF Blakemore, L amp;F Jones, Bestway, Parfetts, United Wholesale as well as other smaller independent suppliers. This is added to the list of Booker, Dhamecha, Makro and other leading members of the Today’s Group and Landmark.”
He says his company always tries to support wholesalers with regular promotional activity especially on their trade days by offering deals to drive the volume that is required.
He adds that this year will be about mass distribution into the retail trade and working closely with wholesalers region by region, to drive distribution.
“We are still a niche brand within the category as a 100% natural product but our growth last year was double that of the energy category and as a premium brand in a tough economic climate we did very well. The general trend was undoubtedly towards the influx of own label and low-end price-marked cans but we like to offer retailers good margins with strong case deals and a pound;1.29 recommended retail price.
“We will be looking at four-packs for the take-home market and possibly ‘added value’ flash packs this year as one of the mechanics within wholesale.
Meanwhile, Neal Haworth, brand manager for No Fear Extreme Energy, describes performance of No Fear in the wholesale channel as excellent.
“Generally wholesalers are good at supporting the No Fear Extreme Energy brand. Proactive wholesalers are allocating more shelf space to energy drinks and we’re expecting our brand to go from strength to strength as more and more wholesalers see the opportunity for No Fear in their soft drinks range.”
However Haworth has his reservations about new flavours. “We’ve noticed an increase in different flavours of energy drinks which are securing shelf space, but not delivering the expected rate of sale that their space should demand. People predominantly want to buy the original flavour, which is why brands like No Fear are still experiencing such growth.”
Wholesalers are a key channel for GSK in achieving a route to market and getting its products on the shelves of the independent retailers, says the company’s category management controller, Paul Gurnell. “We fully recognise the importance of the channel and fully support it with dedicated resource in account sales, category marketing, shopper marketing and field teams, including a specific wholesale development team.
We extend this support out to wholesale customers and offer dedicated field support throughout independent retail. Our aim is to call on 30,000 independent retailers on top of thousands of foodservice outlets across the UK.”
Gurnell says GSK expects 2012 to be a year of strong growth for sports and energy drinks (the company’s forecast is 14%) driven by major sporting events not only the Olympics, but also the Euro 2012 Football Championships.
He says wholesalers can help the category by educating customers on the significance of passing on promotions and discounts they receive in depot and converting them into in-store promotions, which help to deliver incremental sales.
Incremental sales can also come from new lines, and GSK is launching a Lucozade sub-brand called Lucozade Revive. The company says it is a light energising drink that it believes will drive incremental sales through its naturally invigorating flavours, low calorie content and credentials as a healthier option. It contains B vitamins and contains 50 calories per bottle.
It will be available from April in two flavours to the general trade: Lemongrass with Ginger and Orange with Acai; with a third flavour Cranberry with Acai initially only available in Tesco.
Sophie Birrell, Lucozade Revive’s senior brand manager says the drink offers “something completely new and relevant to consumers who don’t currently drink energy drinks”.
The launch will be supported by a pound;6.1m spend which will go on TV, outdoor, press and digital advertising, as well as extensive sampling.
Meanwhile, Britvic and PepsiCo are repositioning Gatorade as the sports nutrition range of choice for athletes with the launch of G Series Pro. Each product has been developed to cater for specific needs. G Series Pro 01 Prime is a pre-game fuel liquid which comes in a 118ml pouch. It is designed to be taken 15 minutes before activity. G Series Pro 02 Perform available in both powder format and ready-to-drink offers consumers a blend of fluids to help rehydrate, replace sweat loss and fuel working muscles. G Series Pro 03 Recover is ideal for use 30 minutes after activity to help support muscle recovery and replace electrolytes lost during workout or competition.
The launch is supported by a Game Changer marketing campaign in the health and sports press.
Jon Evans, head of Gatorade marketing at Britvic, comments: “The launch of the Gatorade G Series Pro gives us a great opportunity to reposition Gatorade to an audience of athletes who are passionate about exercise and elite level sport.
“Gatorade is famous for changing the game. It was the first sports drink of its kind and now we’re changing the sports nutrition game again, with G Series Pro. Gatorade is the most researched sports nutrition drink and with the line already established in the US, we’re in a great position to offer a fantastic product.”
Coca-Cola Enterprises (CCE) reports that Powerade Energy, which was a new addition to its range last year, is driving incremental category growth. According to Nielsen data, 74% of sales have been incremental to the category. Meanwhile CCE’s Relentless continues to sell well. Since its launch into the wholesale sector, over 500,000 cases of the latest Libertus variant have been sold.
CCE distributes Monster Energy in the UK. According to Nielsen, Monster is now worth pound;98m in the UK retail and licensed channels, and is the fastest-growing energy brand.
Ed Woolner, business director at Monster, says innovation is core to its sales success. The brand’s latest innovation is Monster Rehab, which will be available from March. It’s a combination of tea, lemonade, electrolytes and “the bad-ass Monster energy blend”.
Woolner says it quenches thirst, hydrates like a sports drink and is perfect after a hard day’s night. “Within two months Rehab smashed its way to being the seventh biggest energy drink SKU in the States (Nielsen data),” he adds.
Les Ashton, sales manager, PLA Soft Drinks, Merseyside
Monster and Relentless are our biggest selling energy drinks. We stock all the flavours and I understand there are two new Monster flavours coming soon as well as a new Relentless one.
Both Lucozade and Red Bull have taken a dive for us but Lucozade sales are slowly recovering.
We sell mostly to shops and cafes which is where Monster and Relentless are popular; I think Red Bull is more popular in the licensed trade.
I see Monster as a drink for younger people while Relentless is more popular with grown-ups.
Another popular line is Landmark’s LSV and I think that’s because it’s cheap.
We run promotions on energy drinks when we can, typically money-off or multi deals. We delisted all our energy shots because they weren’t selling. I don’t think people understood them.