Little Competition

FIRING A POWER SHOT

As Sperber describes, that lack of competition from big-name energy drinks has helped the Michigan-based brand take early ownership of the category. But some well-known players, particularly NOS, are about to jump into the market.

“We’re the hot brand at the hot time,” said Fine. “We’re putting it on everybody’s radar.”

NOS, best known for a set of bottles shaped like a popular brand of automotive nitrous oxide booster tanks, has taken off in the past year through a combination of innovative package design and clever channel marketing, climbing to nearly $160 million in sales.

In early May, Fine plans to introduce the NOS Power Shot throughout the Coke system. Fine says that with Coke’s distribution power, the growing popularity of the energy shot, and the momentum of the NOS brand, Power Shot will quickly turn into a top SKU.

“Think about how excited we were when we first saw this nugget of a category nine months ago,” Fine says. “Based on what the NOS brand is all about, we thought we could take the same brand platform and extend it into this new category.”

Still, there are some skeptics who believe that the strong energy drink players won’t be able to make the transition into shots.

“If it was about taste, rather than the benefit the consumer gets from the product, that might let energy drink makers in,” said one convenience store executive. “It’s going to take some innovative products or a value-added proposition to take the share away.”

NO ATTENTION

So, aside from 5-Hour’s television ads – it spent nearly $10 million in 2006, according to A.C. Nielsen Monitor Plus -- why haven’t energy shots picked up much media attention yet? Part of the reason is that the shots are tracked as vitamin supplements, rather than selling in the heavily-advertised beverage space. But the introduction of energy shots has turned vitamin, health and beauty into a major growth sector for C-Stores and other retail channels – according to one C-Store executive, in fact, it’s a boom that hasn’t been seen since the pre-regulatory Ephedrine tablet sales bonanza of the 1990s.

7-Eleven has increased its space allocation for liquid vitamin supplements – the category energy shots dominate – for 12 straight quarters. Energy shots now represent 25 percent of the sales in the health and beauty category at Circle-K – even though the category includes everything from marital aids to Advil.

“I would classify it as outstanding growth,” Sandra Colvin, the 7-Eleven category manager for vitamins and supplements, says of energy shots. Starting with the single 5-Hour Energy product, she says, “we went from a bottle, to a shelf, to a shelf and a half, and our individual stores are going further depending on what their customers want.”

Marketers are betting they’re going to want quite a bit more. Last November, at the National Association of Convenience Stores Show, the rising tide of energy shots was easily evident, as brands from established players like Jolt Cola and distributor-produced rollouts like Blutonium alike jostled for attention. There is the sense that, just as with energy drinks before them, there are going to be a lot of similar products on the market in the near future. Already, in fact, 5-Hour executives are complaining about me-too products making claims of six hours of energy and beyond, filing suit against Nitro2Go in Michigan. One of the first sports tie-ins is in place, as well – Baseball Hall-of-Famer Johnny Bench is on board with Turbo Power Energy.