With so many New Year resolutions focussed around fitness and going to the gym, now is the time for wholesalers to ensure they are stocking the right sports and energy drink brands.
Sports and Energy drinks exploded onto the scene two decades ago and has since become a bona-fide everyday product for many consumers in the UK.
A fast moving category that has evolved with the times, it offers wholesalers and retailers – and indeed the entire impulse market – excellent opportunities to grow sales, crucially with great profit margins.
“Sales from my Sports & Energy drink will generate more profit than from any other impulse product in my cash and carry, and you see this replicated in the stores of my customers,” says West Bromwich wholesaler Surj Khooner.
Buoyant with numerous brands, including plenty of own-label and value driven drinks, it is the branded products which seem to be providing the ongoing momentum in Sports & Energy drinks.
“For sure, the branded drinks that people know and trust, and who invest in keeping their products front of mind are the ones that outstrip the value driven drinks. Wholesalers should stock a range of top selling brands in order to maximise profitability.” says Surj.
He adds: “Shoppers are more savvy than before, they know all about health, which is why my branded drinks always do really well, especially at the start of the year.”
With renewed fitness goals marking most people’s New Year resolutions, the January-February period is a great sales opportunity for Sports & Energy drinks.
Core products such as Red Bull 250ml, from arguably the biggest brand in Energy, will help wholesalers and retailers maximise from this opportunity.
In 2018, a total of 6.79 billion cans of Red Bull were sold worldwide, representing an increase of 7.7% against 2017. Globally, over 75 billion cans of Red Bull have been consumed since the product’s inception.
The growth of Red Bull over the past year in the UK has been driven by an increase in penetration, says Mark Bell, Strategy & Planning Manager at Red Bull UK, with the brand now reaching 1 in 10 shoppers in the UK, an increase of 963,000 shoppers vs a year ago (Kantar).
“People are increasingly busy and wanting to do more with their time. We see this in changing shopping habits over the last five years with increasing frequency of trips and changes in consumption behaviour, particularly out of home,” says Mark.
“More products are being consumed as snacks or for health reasons. This is reflected in the most valuable impulse packs in store which lean towards soft drinks with a strong presence of Functional Energy.”
Despite a challenging macro environment, for the past decade, Energy Drinks has been the fastest growing segment within the Soft Drinks category (Euromonitor) with growth predicted to continue for the next five years (Mintel).
Having a wide range will be key to driving this growth, says Mark.
“Offering choice is at the centre of the Red Bull range – as consumers increasingly pick up a sugarfree alternative, the Red Bull range has been expanded to include a sugarfree variant of every pack in the range.” This has seen Red Bull launch Sugarfree 473ml, Tropical Sugarfree Edition in 2018, along with Coconut Berry Sugarfree Edition in 2019.
These packs have contributed over £61m to the category in the latest year, as well as making it the highest ever amount of Sugarfree variants sold by Red Bull.
If Red Bull is the market leader in Energy, then Lucozade has arguably mirrored its success in brand recognition and trust in the Sports drinks segment.
The segment is in strong growth of 9% (IRI), ahead of the wider soft drinks category, illustrating just how fundamental it is to a wholesaler and retailer’s soft drinks selection.
The category is large so wholesalers should stock up on the leading brands to ensure they can always offer their consumers what they’re looking for, says Matt Gouldsmith, Channel Director, Wholesale, Lucozade Ribena Suntory.
“We advise wholesalers to follow simple category advice to maximise sales within sports drinks. Focus on Layout, review the Range regularly and Stock up frequently.
“Empty chillers could cause shoppers to go elsewhere, so keep the stockroom full to allow quick restocking during busy periods.
Matt adds: “The layout in the chiller is important in helping shoppers find what they’re looking for quickly and easily. Soft drinks SKUs should be brand-blocked with a minimum of two facings per flavour, and more for a best-seller like Lucozade Sport.”
2019 was a big year for Lucozade Sport, with a raft of activity which kicked off with the launch of its latest NPD, Anthony Joshua Fruit Punch, which is already worth over £5m (IRI)
The brand also partnered with the England Lionesses and the Netball World Cup last summer and continues to invest in PR and social media to celebrate inspiring and inclusive fitness enthusiasts in 2020.
Consumers are always on the lookout for the next big thing within the category, thus innovation has become crucial to attracting the attention of both gym goers and busy workers.
Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP) points to Coca-Cola’s recent activity in “flavour and innovation” giving energy drinks a boost, by driving sales and enabling brands to reach new audiences.
“In October 2019, we entered the performance energy drinks sector with Reign Total Body Fuel, a new drinks range from Monster Energy engineered to fuel optimum performance for workouts and strength training,” says Amy.
“Reign Total Body Fuel is designed to be consumed pre and post workout and contains 200mg of natural caffeine extracted from green coffee beans.
“The no sugar, no calorie range also contains a number of ingredients intended to enhance performance, including branched-chain amino acids (BCAAs), which can help to prevent protein muscle breakdown, and L-Arginine, which improves blood flow and stimulates the release of growth hormones.”
Additionally, the range of drinks are enriched with Vitamins B3, B6 and B12, which all contribute to reducing fatigue and normalising metabolism, and contain no artificial colours or flavours to increase appeal amongst target consumers.
Reign is available in four flavoured variants – Melon Mania, Razzle Berry, Lemon Hdz and Sour Apple. Each 500ml can is adorned with distinctive and eye-catching warrior-themed packaging and is available in plain and price-marked packs.
A massive development in energy drinks last year was the introduction of one of the biggest brands in retail – Coca-Cola.
“In April we introduced a new and different option to the energy drinks market by launching Coca-Cola Energy, the first energy drink released under the Coca-Cola brand,” explains Amy.
“Coca-Cola Energy has been designed to complement the upbeat and busy lifestyle enjoyed by many of our young adult consumers, combining the great Coke taste people already know and love with caffeine from natural-derived sources, guarana extracts and B vitamins.
“It is available with or without sugar, helping wholesalers and retailers to meet the different demands of an increasingly health-conscious audience. Both variants come in 250ml cans with a sleek, distinctive design that matches the unique drink inside.”
Of course, Coca-Cola already has a strong performer in this market.
Monster Energy drinks is an established brand that has benefited over the past few years from a range of high-profile promotions with complimentary brands like the global gaming hit, Call of Duty.
They also have a global partnership with three times Formula One world champion Lewis Hamilton, which saw Lewis bring out his own Monster Energy drink called LH44, named after Hamilton’s race number. In March 2019, Monster Energy unveiled its first range of RTD coffee drinks and supplemented it recently with a new flavour – Espresso Salted Caramel.
Available in a premium ‘touch ink’ black 250ml can, the new flavour adds to a range that is now worth £5.5m (Nielsen).
More innovation in energy drinks came from Barr Soft Drinks, which is tapping into growing consumer interest in energy with additional functional benefits with the launch of new Rockstar XD POWER. Launched in October 2019, Rockstar XD POWER is available in two 500ml variants, Blue Raz and Hardcore Apple.
The performance is delivered by 200mg of caffeine per can, complemented by Branched Chain Amino Acids which help fuel protein synthesis and muscle recovery.
XD POWER also contains the signature Rockstar B Vitamin blend which directly impact energy levels and brain function. Both variants are zero sugar and free from artificial flavours and colours.
“The launch of Rockstar XD POWER comes as performance energy drinks with added functionality are delivering high market growth in the USA,” says Adrian Troy, Barr Soft Drinks Marketing Director.
“This new product offers a different proposition to current energy products and will appeal to the 61% of men in the UK aged 16-34 who use supplements. In addition low calorie energy is in strong double-digit growth, so we are confident that Rockstar XD POWER will deliver incremental category growth for wholesalers and retailers.”
Barr Soft Drinks recommends that retailers merchandise Rockstar XD POWER in the ‘on the go’ section of the chiller, where nearly one in two purchases is an energy drink (IRI), to meet the needs of shoppers on the lookout for this functional energy proposition.
Timing can be an important part of driving sales in Sports & Energy drinks, especially with brands that have time-specific marketing initiatives.
No retailer wants to miss out on sales of a particular product because he/she didn’t know about core activity, making it crucial that wholesalers help their retail customers understand what is happening in the sector. Which is why David Butcher, Managing Director at Carabao is urging wholesalers to get their sales off to a fast start this New Year by taking advantage of “huge Carabao brand awareness in January and February”.
The energy drink that originates from Thailand made a big splash in the sector a couple of years ago when it became a lead marketing partner with the English Football League Cup, taking over sponsorship to rebrand as the Carabao Cup.
The tie-in continue to deliver amazing brand awareness, and David is keen to remind wholesalers and retailers that the semi-finals and final of the competition occurs over the next two months, which according to David will generate over £122 million media value.
He adds: “We have ambitious plans to win over shoppers everywhere; our 2020 plans are bigger than ever with a new flavour launch and building on our massive football sponsorship deals with the EFL and Chelsea FC.
While mainstream brands provide much of the sales and growth in Sports & Energy drinks, more niche brands have an important role to play to keep the sector invigorating.
Grenade, renowned for its popular Carb Killa energy bar range, is certainly freshening things up by entering the energy drinks market.
Well-known in gym circles the brand’s new product, Grenade Energy, is designed for consumers looking for an extra boost whilst reducing their sugar intake.
Using all-natural caffeine and zero sugar, Grenade Energy packs the same caffeine as two espressos, added electrolytes for hydration (including magnesium), with a thrown in boost of B vitamins to aid recovery and added BCAAs – plus no artificial preservatives or colours.
CEO and co-founder, Alan Barratt, comments: “We’re pumped to take the energy world by storm with our new product. There is no doubt that the sports and energy drinks sector is a large and dominating market – but in true Grenade style, we’re offering something different to market, whilst immersing our brand into the category.
“Our brand-new flavour-packed Energy drink will give consumers the ultimate energy fix that comes at no cost to their healthy and active lifestyle. Watch this space.”
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