Energy is getting tastier

energy
New flavour variants are one of the key trends driving the energy market, writes Nikki Allen

“The biggest trend in energy drinks this year is the development of flavours in the category,” says Guy Gissing, national impulse controller at the owner of the Rockstar brand, AG Barr.

“This needs to be reflected in the range wholesalers have on offer. In the 500ml big can format, for example, flavours are fuelling market growth at 48% in value and Rockstar has six different great-tasting flavours with vibrant packaging.”

Top Tips

  • Experiment with new tastes: Flavours are fuelling market growth so stock alternative flavours of the best‑sellers.
  • Cover all bases: The energy category is split into value, mainstream and premium – stock evenly across each tier.
  • Price-marked packs are popular: 63% of retailers say they are more likely to stock a new product if it is price-marked.
  • Use signage: Use key brands as signposts for the category by placing them at eye level. Vertical sub-category blocking makes it easy for customers to locate the right products.
  • Think formats: The 250ml format is a functional energy boost but 500mls are equally popular as longer, energising beverages. Where possible, try to allocate space to both formats.

Lucozade category director Georgina Thomas says: “Innovative products are the lifeblood of the category and research shows the opportunities for sales in-depot lie in exciting tastes. After just 28 weeks on the market, Lucozade Energy Pink Lemonade was worth an impressive £11.2m, contributing 6% to total energy growth.”

Boost sales director Al Gunn agrees: “We invested heavily in research, which has shown there are opportunities for wholesalers to grow sales using exciting flavours combined with good value.”

Know the market: Get to know the top brands

Growing year-on-year by 5.4%, the sports and energy drinks sector is vital to both independent retail and foodservice customers.

“The energy drinks sector is worth £324m to independents and symbol retailers, so energy drinks are a must-stock for wholesalers,” says Dave Turner, trade communications manager at Coca-Cola Enterprises. “Brands make up the majority of that value share in both the on- and off-trade, and have helped drive market growth, as many have invested heavily in marketing campaigns.”

Emma Hunt, marketing manager at Vimto Soft Drinks, adds: “Consumers are always on the lookout for the next big thing in energy, so wholesalers should be on the front foot to make the most of these opportunities.”

Get the right balance: Offer value, mainstream and premium

“The energy market can be split into three tiers: value, mainstream and premium,” points out David Willey, Red Bull trade communications manager.

“Wholesalers should make sure they allocate space to each of these tiers. As a general rule, there should be an even split across the three.”

Guy Gissing agrees: “By offering alongside premium brands a combination of value tier products, price-marked packs and promotional activity, wholesalers will see profits grow.”

Dave Turner adds: “Big brands, such as Monster Energy and Relentless, deliver great value to retailers and foodservice outlets, while the value brands that have entered the market in recent years deliver on volume. So we’d expect wholesalers’ customers to try to find a balance between cash margin and rate of sale, meaning wholesalers should stock a mix of products.”

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WHOLESALER VIEWPOINTS

Richard Booth, deputy training controller, Bestway Group

“Energy is a hugely important category for retail customers. Looking ahead, the sector is forecast to continue its strong growth and flavours are key. We offer leading brands, so Red Bull, Lucozade, Rockstar, Monster and Relentless. Boost is a tertiary brand with strong sales and should also be in depots.” 

Peter Hindmarch, Nisa trading controller

“The energy drinks category has surprised me over the past year. Value is being taken out of the sector, as major brands compete with things such as promotional offers and low price point price-marked packs, and there has been growth in pocket money brands that deliver little cash value to retailers.” 

Susan Darbyshire, Spar UK brand director

“The sports and energy drinks category accounts for 29.5% of Spar’s total soft drinks sales, so it’s a huge sector for retailers. Flavours are an important trend and new, exciting variants of sports drinks are a big seller for retailers at the moment.” 

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Stock price-marked packs: Shoppers want value for money

Price-marked packs (PMPs) help shoppers feel they are getting great value for money – which means repeat business for your retail customers.

“We have seen many wholesalers experience the benefits of offering PMP energy drinks, with 63% of retailers claiming they would be more likely to stock a new product in a PMP,” says Georgina Thomas. “In fact, within the energy category, PMPs have driven 36.4% value growth compared to a standard pack.”

Guy Gissing adds: “Value has never been more important to shoppers than in the past five years, but it is not just about price. Shoppers are looking for ways to spend less without compromising on quality and PMPs clearly represent value for consumers, currently making up 29% of all impulse energy sales.”

Display energy drinks in-depot: Offer a choice of formats

By using simple merchandising principles, wholesalers can boost their sales and encourage more retailers and foodservice customers to stock up, says David Willey. “In-depot, wholesalers should use key, major brands as signposts for the category by placing them at eye level,” he suggests.

“You should also locate signpost brands in the middle of your energy drinks fixture, with multiple facings and blocked with similar products. Vertical sub-category blocking makes it easy for your customers to find the right products in depots, too,” he says.

“Offering a choice of formats and displaying these in the right way is also a critical component,” adds Guy Gissing. “The 250ml format delivers the functional impact, whereas 500ml combines the benefit of function with a long, refreshing and tasty drink, meaning wholesalers need to allocate space to both sizes.”

Support seasonal events: Get ready for the World Cup

The World Cup is almost upon us, and with it, a boost in both TV viewing figures and the number of people getting involved in sport. This means sales of energy drinks are set to soar, say suppliers. Guy Gissing points out that Mango Month in May and the Commonwealth Games in the summer are two of the biggest seasonal opportunities for wholesalers this year.

“People were a little bit apprehensive about going to the Olympics but the Commonwealth Games is different – everyone will be out celebrating and the must-stocks at this time for retailers are Irn Bru and Irn Bru Sugar Free, plus the Mango, Passion Fruit and Guava flavour variants of Rubicon in both still and carbs. These are our bestsellers.”

“The synergy between energy drinks and major sporting events provides huge potential for growth in the category,” says Lucozade’s Georgina Thomas. “Wholesalers should take full advantage of events to boost sales by cross-merchandising and creating stand-alone displays focusing on the key promotions, which will encourage customers to cross-purchase and impulse buy in other ­categories.”

Stocking limited edition sport-themed variants, such as Lucozade’s Brazilian flavours, is also useful for attracting customers and boosting sales, she adds.

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