THE ENERGY DRINK CATEGORY IS NO LONGER “maturing.” More than ten years in, with annual growth, from emerging metrics, down to a stately 4 percent, and three brands swallowing up 2/3 to 3/4 of the market, it’s fair, now, to call the once young and explosive category “mature.”
Red Bull (see Red Bull Back in the Herd, but Ready to Bust Out, pg. 40), the top seller by dollar-value, still maintains its network of independent distributors, but other big sellers have sorted themselves into Coke and Pepsi camps. Monster, the top seller by volume, currently pushes its product through the Coca-Cola and Budweiser systems; number-three player Rockstar gets its product to stores on the same trucks as Pepsi and Mountain Dew. Even in the quadrant of the energy drink market not owned by those three brands, the biggest players claim some affiliation with the big houses. Amp, Pepsi’s in-house invention, tops the also-rans followed by Coke-baby Full Throttle, Pepsi-ally Starbucks’ Doubleshot, and NOS, a subsidiary of FUZE, itself a subsidiary of Coca-Cola.
For independent brands, that means the already-difficult task of building a successful business in the energy drink segment has gotten harder. Not only do they have to formulate an innovative product, build a brand identity, and scavenge customers, they have to do so while in direct competition with the world’s two most powerful beverage distribution networks.
Under those conditions, the number of private brands has fallen. BevNET’s 2008 energy drink guide listed 228 energy brands. The 2009 guide lists about half that number, a reflection of the growing number of entrepreneurs that have discovered that the energy drink gold rush is over.
But even in that environment, there are still some strong independent players. Jolt and Go Girl, in particular, posted high enough sales to make it on IRI’s leader board, and brands like BAWLS and Redline have carved out enduring or growing niches for themselves.
Though those brands continue to find room to live and expand around the edges, the age of the entrepreneur as king of the energy category may be over. Still, there’s opportunity for retailers to sell smart, well-run independent brands that have the potential to keep growing. Their ongoing ability to survive proves that they’ve hooked an enduring segment of the populace, and those customers may follow the product into your store.