The stimulation segment is still big within the soft drinks category, so making the most of it in the busy festive period could be key to driving sales.
By Elena Dimama
The energy drinks market is still going strong, buoyed by a resilient soft drinks sector.
In Scotland, the soft drinks category is experiencing solid growth at 6.5% year-on-year on a 52 week-ending basis to 10 September 2023, according to TWC. Drink-now products account for 66.8% of value sales in Scotland within the soft drinks sector, enjoying a 12.2% uplift north of the border.
Sports and energy drinks are the biggest driver in the drink-now products growth, accounting for 51.5% of the category in Scotland – growing at 18.7% year-on-year.
Meanwhile, stimulation is “by far” the largest contributor to the sports and energy category, accounting for a share of more than 80% in Scotland.
Category strength
“Energy has established itself as one of the biggest growth drivers in soft drinks, and that shows no sign of slowing down,” Amy Burgess, Senior Trade Communications Manager at Coca-Cola Europacific Partners (CCEP) says. “It’s now worth £1.8bn to retailers and has enjoyed 20.4% value growth and 19.5% volume growth in GB over the last year.”
According to Burgess, innovation is key to increasing sales, “delivering 29% of all category growth last year, so making space in the chiller for the latest launches that are going to capture consumers’ attention is key”.
Red Bull adds: “As the second-largest sub-category after Colas, Sports & Energy is a vital category to include in chillers, delivering the most actual growth of any other soft drinks sector, at +20.2% year-on-year to a value of £2.1bn.
“With more shoppers at the fixture, we see a growth in the number of Sports & Energy trips, and this year shoppers made 492 million trips, which is up 6% on the previous year. This means that it has never been more important for retailers to ensure that they have sufficient stock on shelves.
“Place bestsellers at eye-level to signpost the category – making the fixture easier to shop – and provide multiple facings to ensure you always have chilled stock available for immediate consumption.”
- One in three on-the-go soft drinks sold are energy drinks, so make plenty of space in your chilled soft drinks line-up.
- Help shoppers navigate the fixture by grouping energy brands and create clear segments for traditional, zero sugar, flavoured energy and functional energy sectors.
- Remove slow-selling lines and replace them with new launches or double facings of your best sellers.
Health and fitness
Sales of low and no-calorie soft drinks are equally resilient, with volume sales having grown by 8.7% during 2023 in the category overall, according to BSDA.
In addition, fitness has been a focal point for a large number of consumers, which is where function and energy drinks come to the fore.
“One in eight people in the UK are currently a member of a gym, and a further one in five said they were planning to join a gym in 2023,” Burgess notes.
“That’s why performance energy drinks, with added benefits to fuel people during their workout, are growing in popularity – over the past year the value of this subsector has increased by 22.9%.”
CCEP is launching two new variants in its Reign Total Body Fuel range designed to capitalise on the fitness trend – the Mang-o-matic and the Peachy Keen products.
Lucozade is also focusing on the low- and no- trend, with the Lucozade Alert Zero Sugar Mango Peachade now including a £1 price-marked variant. Matt Gouldsmith, Channel Director, Wholesale, Suntory Beverage & Food GB&I, explains: “Lucozade Alert Zero Sugar Mango Peachade is the brand’s first move into the zero-sugar energy segment, which is currently experiencing 24.3% growth.
“Within energy, stimulation has been the strongest performing segment over the last five years, making up 80% of the category and worth £345m in the convenience channel in the last year.”
He adds: “Less than 15% of stimulation value sales currently come from zero-sugar drinks; however, zero-sugar drinks are driving category growth with more than 30% of stimulation category growth.”
A focus on health is also evident from Red Bull too; stocking both full sugar and sugar-free products is crucial. “Less than one-third of Red Bull Sugar Free shoppers also buy core Energy Drink, demonstrating that there are distinct shopper groups that these SKUs appeal to,” the company tells SLR.
Flavour matters
Flavoured sports and energy drinks are “vital”, according to Red Bull, helping drive the growth of the category.
“The area which sees the most innovation, Flavoured Sports & Energy drinks are up +24.4% year-on-year vs unflavoured at +12.0%, with tropical flavours a core opportunity, growing 18.5% vs mainstream flavours at 17.4%,” Red Bull explains. “We also know shoppers love to explore new flavours, so we are constantly innovating, to add excitement to the category, which has not only helped us to drive sales but also encourage trial by introducing new shoppers to the sector.
“This has led to Red Bull Editions tripling in value within the last two years, growing +81% shoppers incrementally year-on-year and appealing to more females, with 62% of Editions spend by female buyers.”
Lucozade is also introducing new flavours, following 18 months of research and development, along with input from 6,500 consumers. The brand has enhanced its Original and Orange flavours of Lucozade Energy, aiming to deliver bolder tastes.
“The changes are subtle but further elevate the drinks’ flavours, giving Lucozade Energy drinkers more of the unique notes they associate with the brand,” Gouldsmith says. “Marketing plans, set to be unveiled in the coming weeks, will work to bring in new consumers to trial Lucozade Energy and help drive retailer sales.”
The revamped flavours also come in a fresh pack design in a bid to create greater appeal to shoppers.
Christmas opportunity
The festive period is not one to be underestimated, especially in these financially challenging times. It is a crucial time for shoppers to spend just a little extra and a key period to try new flavours.
Brands are taking note of this trend, with Reb Bull, for example, targeting winter occasions, such as socialising, with the range having enjoyed strong growth last year.
“To cater for these key missions, it is important to have availability of the four pack for entertaining and socialising, as well as chilled availability of single cans – in particular larger formats such as 355ml and 473ml – when shoppers are looking for that boost of energy to get them through the season,” Red Bull says. It adds: “Larger sizes and multipacks are winning formats at Christmas, with Energy Drink 473ml gaining +1.2pts in value share of Red Bull sales, and Multipacks +4.8pts in December vs the rest of the year.”
Irn-Bru has recently powered into the flavoured energy market with Pwr-Bru, a four-strong range exclusively available to Scottish retailers.
Price-marked at £1.19 and available in four flavours – Origin (Original), Maverick (Berry), Diablo (Cherry) and Dropkick (Tropical) – the range is supported with a £3m brand campaign.
As part of the launch, brand owner Barr Soft Drinks partnered with independent convenience retailers in Scotland to examine how the range performed in store from launch.
Dennis Williams, of Broadway Premier Convenience Store in Oxgangs, Edinburgh, introduced all four varieties and says he is now selling six cases a week.
“It’s doing really well for us. Our shoppers always love new products and we’re seeing Pwr-Bru attract a mix of existing energy drink shoppers and consumers who didn’t buy into the category before,” he says.
“Our bestsellers are Original and Berry and I’m finding that the price-mark is very effective at communicating good value.”
It’s a similar story at Saleem Sadiq’s Spar store in Renfrew. “Our shoppers really like it and I think it’s a launch that will certainly keep delivering for us,” he said.
“We were really pleased with the level of the support we received from Barr. They even sent reps to our store to hand out samples and drive engagement.”
An AG Barr spokesperson said: “Pwr-Bru is without a doubt the biggest launch the Scottish energy sector has seen this year. We are so excited to see it delivering such great returns for our customers already and we had a great day with Saleem, his team and customers.”
The launch of Pwr-Bru comes as energy drinks are delivering one-third of all soft drinks growth in Scotland, with flavoured energy a major driver of the market; 98% of big-can energy drinkers said they would try Pwr-Bru at the time of launch.
