Time was, if you wanted a diet energy drink, you had to raid Dietrich Mateschitz’s private stash. But no longer.
Although diet energy drinks are still considered something
of a weak sister in the category – kind of amazing in and of itself,
when one observes that they sold more than $250 million in product in
convenience stores alone – the future is one in which the weak sister
grows into a strong sibling in her own right.
Right
now, they sit at only about 13 percent of the fast-growing category – a
ratio that’s appreciably less than diet versions of CSD’s. But energy
drinks are still a fairly young category, so it’s important for
retailers to note that things are still changing, and there’s
definitely reason to pay attention to new diet- and low-calorie options.
For
example, in looking at leading diet energy brands, the West Coast is
still a big indicator of where things are headed – and from that
perspective, take a look at Diet Rock Star, the second-place
brand. Rock Star has long been much more popular on the West Coast than
out East – and its $65 million in sales in the convenience channel is
about half of what its full-calorie line sold. Diet Rock Star grew by
63 percent last year, according to AC Nielsen, while the full-calorie
version grew only 11 percent – lagging the category’s growth overall.
Rock
Star has always had an advanced cachet with female consumers, which may
explain the high uptake of its diet brand, as well. But that also
speaks to the evolution of the category – as one of the first of the 16
oz. brands, it is more mature than much of its competition, and as it
penetrates outside of its core demographic, it enters into even more
demographic bands that are more likely to reach for a product with
fewer calories.
Similarly, Sugar-Free Red Bull,
which still only has 1/5 the sales of the full-calorie stuff,
nevertheless grew faster than its parent brand – and 20 percent faster
than the category overall. And SoBe, which has been sliding
backwards in terms of sales and share – no mean trick in a category
that grew by 1/3 again last year – continued to see forward progress
from its diet brands.
As the category separates
into a lead pack and its niche competitors, it’s going to be more
important to look to diet energy as a way to keep building share,
analysts say.
There are two main reasons for this:
1.
The category is continuing to catch up among women and older consumers
– many of whom are more calorie-conscious than the category’s longtime
core consumers, young men and
2. As they get older, those longtime young men/longtime core consumers are also becoming more calorie-conscious themselves.
So
what is out there for retailers to consider? For people new to the
category, it’s likely that the more established brands are going to be
the ones that they turn to for diet drinks.
But there are also a few products that only have diet characteristics – one of them, Xyience, has a strong base among men, and has show rapid growth since its introduction last year. Another, Tab Energy,
has been slow and steady, but its growth lags the category – it may be
lost in the wide number of energy SKU’s recently taken on by the
Coca-Cola Co.
Still, as a sub-category it faces
some challenges: the growth of teas and, even more so, yerba mate
blends that may be more appealing to certain consumers because of their
specific health properties; additionally, a growing number of
functional waters contain caffeine and other “energy” ingredients.
Nevertheless,
if you’re taking on an energy drink, chances are you’re also getting
the opportunity to take on a diet brand, as well. Look at who is
walking up to your cooler, look at who is shopping your aisles, and if
you’re ready, expand – particularly if you’ve got the type of consumers
who are trying not to.
The category is continuing to catch up among women and older consumers...