16.07.2024
Study
4 energy drink trends that promise sales growth
Innovative flavors and healthier options are helping this “affordable luxury” continue to grow despite inflation, experts say.
Energy drinks have become popular among convenience store operators, and experts see no end in sight to the category’s growth, given the continued demand and innovative products.
Convenience store sales of energy drinks grew 14.2% for the quarter ended February 26 and 9.7% to $12.5 billion for the year ended February 26, according to market research conducted by Chicago-based Circana (formerly IRI and NPD Group). Conversely, sales in the multimarket category were up 16.8% for the quarter and 14.7% for the year.
Meanwhile, the 30,000 retailers surveyed by Goldman Sachs expect the category to grow 14% overall this year – up from a projected 11% growth in 2022.
“Sales of energy drinks, like many other convenience store beverage categories, have rebounded as people continue to get out and about more,” said Jeff Lenard, vice president of strategic industry initiatives at NACS. “The morning commute continues to make a comeback, and this is also driving growth in energy drink sales, especially during the morning rush.”
Retailers can continue to grow energy drink sales by understanding the strength of the category even in an inflationary environment, keeping both popular and innovative products from leading and up-and-coming consumer brands on store shelves, promoting healthier options and understanding the demographics of the core consumer base.
Consumers see energy drinks as an “affordable luxury”
Despite rising inflation for energy drinks, sales remain strong. According to Rabobank, in the 12 weeks ended December 11, 2022, inflation rose by about 7.5%, while sales also increased by 6% in the same quarter.
“Energy drinks are one of the few categories that have been able to grow volumes despite aggressive price increases,” says Burkard Nesin, Beverage Analyst at Rabobank. “This is largely due to the fact that this category is producing a lot of interesting innovations around its core product (energy).”
One retailer interviewed by Goldman Sachs noted that unit growth in the category in its stores was up about 11%, despite price increases by all manufacturers, leading to “very strong” sales growth.
The investment bank noted that despite price increases for major brands such as Monster and Red Bull, “the majority (~59%) of retailers see no signs of consumer backlash.”
One retailer commented that consumers are willing to cut back on other foods to buy energy drinks, “which is consistent with our view that this segment is often seen as an affordable luxury,” the report notes.