Global Convenience Store Focus

An Opportunity in Natural Energy Drinks

European c-store retailers are well placed to exploit the growth in energy drinks, according to a new report from Business Insight.

It claims the energy drinks market continues to offer significant growth opportunity and will be further boosted by the trend to natural products.

The report – Innovation in Sports and Energy Food and Drinks – shows the latest product launches have shifted from stimulant, instant boost energy drinks, such as Red Bull, to drinks that offer a more sustainable, longer lasting energy lift, which is obtained through the use of natural ingredients.

Business Insight says this trend will help fuel a compound annual growth rate of 4.5% in Europe to 2011 and give a total market value of $5bn.

Within the region, Italy is forecast to record the fastest growth rate at 10%, followed by Sweden at 7%.

The UK market is predicted to grow by 4.2%.

UK convenience store retailers have a 33% share of the total take-home soft drinks market, according to Britvic’s Soft Drinks Report 2008, and they are star performers.

In the year to 29 December 2007, soft drink sales through c-stores increased by 6% versus 2% growth at out-of-town retailers and flat sales on the high street (Nielsen).

Business Insight’s Productscan service, which monitors all sports and energy drinks launched globally during 2007, found 7% claimed to be natural and 12% to be high in vitamins.

These products contain ingredients such as oats and ginseng and more novel ‘superfruits’ such as acai and gogi berries.

“By formulating drinks with such ingredients, manufacturers are not only able to make a natural claim; there is also the added benefit of positioning the product as an everyday soft drink, targeted at consumers looking for vitality and wellness benefits,” said Jessica Sadler, Business Insight’s head of publishing, consumer goods.

Sadler pointed to trends in the US market where sports drinks like Pepsico’s Gatorade, for example, are consumed for general well-being and hydration, not just for sporting activities.

Sadler said manufacturers in Europe can tap into this trend and cited one recent European example with Danone Waters’ launch of Volvic Revive in the UK in March 2007.

It is a flavoured water formulated with stimulating plant extracts and no added sugar. It meets consumer needs for hydration due to its association with water, as well as delivering an energy boost through the incorporation of natural ingredients such as guarana.

Sadler added natural will continue to grow in importance in food and drinks, as consumers become increasingly aware of other issues such as food safety and ‘additive free’.

“Energy drinks manufacturers are developing brands to target this opportunity, appeal to consumer concern and be healthy,” she said.

“However, as the Danone example highlights, this product differentiation and movement into more mainstream markets means there will be further competition from other soft drink manufacturers as they attempt to gain share of this growing market.”

Further examples of innovative, natural energy drinks: Actual is a whey-based drink launched in Russia by Kombinat Molochnykh Produktov Edelveis-M. The company claims the drink is a natural source of energy and is offered in orange/mango, apple/pear, and peach/maracuja variants.

Loka Apelsin Havtorn Flavoured Bottled Water was launched in Sweden by Spendrups Bryggeri. The product is claimed to be aimed at the growing market for natural fruit-based energy drinks, especially the teenage consumer segment. It is a sea buckthorn (Nordic passionfruit) flavored beverage.

Venga Functional Infusions were launched in Germany by Beverage Innovations. The energy variety, Energize, is claimed to made with energy-red apple, dragonfruit, sea buckthorn and yerba mate tea. The drinks are said to be free from preservatives, artificial colours, flavours, and high fructose corn syrup (HFCS).

Ocean Spray Cranergy Energy Juice Drink was launched in the USA by Ocean Spray. The drinks are said to contain real fruit juice, five B-vitamins, vitamin C, Splenda, and green tea extract.

Odwalla Nutritional Serious Energy Natural Tropical Juice Drink was launched in the USA by Coca-Cola. The company claims Odwalla Nutritional Serious Energy is “a new energy drink specially formulated to refuel and renew the body and soul”. The Natural Tropical Juice Drink, which contains vitamins B and C, 200mg yerba mate extract (and) 100mg green tea extract is touted as having “a great tasting tropical fruit juice blend that combines juices - including pineapple, mango, guava and passion fruit - to refuel and renew your energy”.

Naked Juice, an all-natural energy juice smoothie was launched in the UK by Naked Juice Co. The drink is claimed be an all-natural energy 100% juice smoothie.

Shift, a natural energy drink, was launched in the UK by Stonyfield Farm. They are described as drinks that give you good, lasting energy and real nutrition, instead of that fleeting, unhealthy caffeine high, and are said to contain proteins, vitamin B3 and B6, acai and ginseng and are certified organic.