Sports & Energy drinks continue to grow faster than any other sector in the convenience sector, and with trends evolving and new products continuing to enter the fray, retailers need to stay on top.
by Kevin Scott
There’s been much written about the impact the Sports & Energy category has grown within the soft drinks market. In Scotland, today, Sports & Energy commands a 23% value share. These days, the category can be split into three sub segments: Functional Energy, such as Red Bull and Relentless; Refreshment Energy such as Lucozade, and Sport such as Lucozade Sport and Powerade.
Functional energy is the largest sub-segment within this commanding a 45% share with Red Bull leading the way worth £15.4m in Scottish impulse, growing ahead of the category at 14.6%.
And for retailers who think that the key to strong energy sales is to offer customers every last product that has ever been launched, think again. Tom Smith, Red Bull Trade Communications Manager, says: “The top 20 Sports & Energy SKUs in impulse deliver a massive 72% of value sales which means retailers should have a focussed range and not give space to products which add little or no value.
“It’s also recommended that they look at how much space they are giving each SKU. Retailers should consider the value each SKU is delivering to their business with value to the category being driven by the market leading, branded products. There is, however a role to play for value brands too but retailers should support the brands that drive good cash margin and profit and not trade consumers down into cheaper alternatives.”
Red Bull is one of the first names that springs to minds when energy drinks are discussed, and the company’s range of products never veers too far from its original 250ml can. In addition to this, also available is Red Bull Sugar Free 250ml, Red Bull 355ml, Red Bull 473ml and the new Red Bull 330ml bottle, which was the leading NPD SKU in the category in the last year.
Smith says: “The 473ml larger can, which is a favourite amongst students has recently benefitted from a redesign to now feature one of their heroes; iconic stunt rider Travis Pastrana.”
This £1.99 price-marked ‘Travis Can’ can carries a QR code, leading consumers to exclusive digital content via their smartphones.
While specialist companies like Red Bull are only active in the Sports & Energy sector, other firms have moved into it, both due to, and contributing to, its overall success. One such company is Coca-Cola Enterprises. Up against Red Bull is the company’s Relentless and Monster brands. Relentless is growing at 17.1% year-on-year and while Origins remains the biggest seller, the Sugar Free version is now worth £4m of the brand’s UK total of £63m.
This May, CCE introduced Relentless Apple & Kiwi to its six-strong range. To coincide with the new flavour launch, the entire Relentless portfolio has also undergone a bold makeover. The new packs have a brighter, eye-catching design for greater stand-out on shelf and to ease shopper choice.
And the brand isn’t just focusing on NPD. Last month it announced that Professor Green will be an ambassador for Relentless Energy Drink throughout 2012, working on a number of special promotional projects for the beverage aiming for maximum consumer awareness amongst its core target audience.
Trailing the Relentless portfolio, with a value of £52m, is Monster. New to the range is Monster Rehab. A mixture of tea, lemonade, Monster Original and enhanced with electrolytes, it is designed to refresh and rehydrate and is aimed at consumers looking for something ‘the morning after’ a late night.
Alan Halliday, Regional Sales Director for Scotland, says: “The trend towards sports and energy products shows no sign of slowing in 2012. They are now not only consumed before and after physical activity, but a huge 82% of sport and energy drinkers actually consume the products at home. As soft drinks category leaders it’s important we continue to invest in this sector with innovative new products and flavours, such as Relentless Apple & Kiwi, and offer a broad mixture of pack formats to meet the diverse needs of sports and energy consumers. With the growth of in-home consumption we have introduced future consumption pack formats, such as our new Relentless and Monster four packs.”
On the sports front, Powerade Sports Drinks (ION4 and Zero) are the official fitness drink of the London 2012 Olympic and Paralympic Games, the brand has an exclusive on-pack promotion under way, giving away a Powerade Olympic Games Sports Bottle free with every purchase. The sports bottle, which features the Olympic Games rings, is the same bottle that will be used in the Olympic Village and by all the athletes competing in London.
Even with the Olympics finishing later this month, the promotion will run though until the end of October, and will feature on all promotional packs of Powerade ION4 and Powerade Zero.
Another leading brand in the area is Lucozade, and the company has taken advantage of the Great British Summer with the launch of Lucozade British edition flavour variants and new Caribbean Crush flavour.
Colin Seymour, Long Term Strategy Director, GSK, says: “With the growing proliferation of products in sports, energy and nutrition, it is increasingly important for retailers to ensure they merchandise their fixtures to make it easy for customers to find what they want. Products that deliver a similar benefit should be grouped together. The beacon brands should be used as a signpost to the type of product they represent; they should be featured more heavily and in a more visible place on fixture compared to smaller brands.”
The advice from GSK is to lay out the fixture so it is easy for people to navigate, but also to maximise the opportunity for the discovery of new products and ideas. Seymour says: “Laying out the fixture in a logical way and incorporating vertically blocking groups on fixtures, will facilitate category growth. In addition, using supplier POS will help to ensure consumers understand the product offerings and help align them in-store to the ATL communication campaigns. Giving Sports & Energy the correct amount of space will significantly increase retailer sales in 2012.”
When looking at NPD bear in mind that in 2011, 43% of Sports and Energy NPD value sales came from Lucozade.
Lucozade will be supporting retailers with a host of NPD and OPOs planned for 2012, which are designed to create noise and activity around the brand, the category, and drive incremental sales.
Throughout the year, the Lucozade Sport team will be activating great campaigns to support its unrivalled array of sports sponsorships. These include: The Premier League (since 1992), the England & Republic of Ireland football teams, a host of football clubs, 25 running events, including Virgin London Marathon and UK Athletics.
Red Bull Category Tips
Like any category, there are some key merchandising principles retailers can adopt which are proven to increase spend and maximise sales:
- Shoppers shop based on shape and colour and they use they use them as category signposts to help them shop more effectively
- Place signpost brands at eye level
- Signpost brands should be at the centre of the planagram to drive the most penetration in soft drinks
- Sub category blocking should be vertical for ease of shop and the quicker it is to find a product, the more money made per shopper minute
- Use the stair step approach – stocking sizes next to each other, this will encourage consumers to increase their weight of purchase.
Moving like a rock star
With the energy drinks category continuing to grow, retailers should make the most of the profit opportunity by offering a wide range of energy drinks, according to AG Barr, manufacturer of the Rockstar energy range.
“Drinks presented in the ‘big can’ format are performing particularly well,” says AG Barr’s Head of Marketing Adrian Troy. “There are plenty of options available for retailers looking to meet the growing demand for 500ml, ‘big can’ drinks”.
Rockstar launched with Original and Juiced 500ml variants in the UK in 2007. Since then the range available from the brand has grown to include Guava Punched and Rockstar Recovery, the UK’s first non-carbonated energy drink. Rockstar also added a touch of style to the energy category with the launch of Rockstar Pink, the first energy drink to be targeted specifically at women.
AG Barr further expanded its energy drinks portfolio in 2011 with the launch of Rockstar Xdurance 500ml, which was designed to prepare consumers for extreme mental and physical performance. Xdurance, in its distinctive blue can, is now the fastest selling Big Can Energy drink in Scotland Impulse.
Troy concludes: “NPD is the key driver of growth, driving interest and incremental sales to the Energy market. In February, we launched a new flavour, Fruit Punch, under the successful Rockstar Punched brand and we have just launched Xdurance Berry and an all-new Xdurance Orange in 500ml PET in plain pack and 99p PMP.”
Retailer Tips from CCE
Coca-Cola Enterprises believes that its Open More Business category management plan is the way forward for retailers looking to make the most of their Energy and overall Soft Drinks sales. Four key areas that independent retailers must consider are:
- Approach zone – do they have signage/ promotions outside the store to entice shoppers?
- Impulse zone of store – can shoppers easily buy products at till point which helps to drive incidence purchase.
- Chiller zone – is the product availability there for those making destination trips?
- Ambient or Promotional zone – do you have an area in store that will attract people to up-weight basket spend with products and promotions they could otherwise buy elsewhere?
Worldwide reach
Red Bull is also currently on TV and in cinema with its first core brand advertising campaign away from the classic Cartoon style. It celebrates the World of Red Bull, showcasing Red Bull athletes, events and properties from around the world and communicating how Red Bull enables people to take the next step towards their dreams or goals.
Trade Communications Manager Tom Smith says: “Add to this the ongoing success of Red Bull Racing in Formula 1 and you have a huge programme in place, packed with ground breaking events as well as communications and ATL campaigns to drive awareness, trial and education throughout the year ensuring the ongoing success of the category.”
“Sports & Energy products are now not only consumed before and after physical activity, but a huge 82% of sport and energy drinkers actually consume the products at home.”
Alan Halliday, CCE
Did you know? over 100 Sports & Energy drinks are sold per minute in Scottish convenience stores?
Did you know? For the second year running, Sports & Energy is the fastest growing category in FMCG?
23% Sport & Energy’s value share of soft drinks category
