Energy Drink Sales Grow 60 Percent Since 2008

Feb. 13, 2013

New research from Packaged Facts shows how the energy drinks and shots market has grown 60 percent from 2008 to 2012. The report titled Energy Drinks and Shots: U.S. Market Trends also indicated that in 2012, total U.S. sales for the energy drinks and shots market was worth more than $12.5 billion.

Intense competition surrounds the beverage industry as marketers seek to increase market penetration and consumption frequency through positive alignment as a healthy and/or functional beverage. Thirst quencher/sports drinks remain the most formidable competitor for energy drinks as this type of beverage attracts a large constituency of energy drink users. Energy drinks are subject to competition from other energy-boosting beverages such as coffee and tea beverages, as well as an increasing number of new product innovations that tap into the energy trend but are outside of the beverage industry.

At present, energy drinks have the lowest consumption rates of any ready-to-drink (RTD) beverage, according to Packaged Facts, a point which reflects the market's relative infancy but also its growth potential. Analysis shows the growth trend of this market, with the incidence of energy drink usage among adults rising from nearly 13 percent in 2006 to 17 percent in 2012. In addition, there is a modest segment of heavy users: 5 percent of adults consume energy drinks 5 to 7 times per month and less than 2 percent drink energy drinks 10 or more times. Consumers 18 to 34, men, Hispanics, Pacific region residents, and adults with children in the household are demographics that over index in energy drink usage.

Packaged Facts estimates that energy drinks account for some 78 percent market share, followed by 18 percent for energy shots, and energy drink mixes (roughly 4 percent) in 2012. A few select marketers dominate the energy drinks and shots market. This demonstrates the first mover advantage in each category. The result is a market that is highly dependent on a handful of key brands, namely Red Bull, Monster Energy, 5-Hour Energy and Rockstar Energy.

Retail distribution of energy drinks and shots continues to expand at a fervent pace — making these products accessible at nearly any retail outlet from major grocery outlets to dollar stores and smoothie shops to sporting goods stores. Packaged Facts estimates that convenience stores hold the largest share of market sales (59 percent), followed by mass merchandisers (13 percent), supermarkets (10 percent), club stores/warehouse (5 percent), and drug stores (2 percent). In aggregate, all other retailers contribute a significant 11 percent to market sales.

Overall growth of energy drinks and shots is influenced positively by new product launches and expanded retail distribution. Economic factors and shifts in the U.S. adult population by age and ethnicity/race are also factors to market growth. An increasingly competitive market for "energy-boosting" products is perhaps the market's greatest threat.