Stimulants – think Red Bull, Monster, Rockstar, Lucozade, natural energy brand Purdey’s and Rubicon Raw Energy - outperformed the market by 2020, growing 28% compared to 8.6% growth for total soft drinks, according to NielsenIQ data. This is despite 80.7% of the segment being in single serve, a format which for total soft drinks declined that pandemic-hit year by 13.3% due to shoppers remaining at home.
Growth continued in 2021, with stimulants overtaking cola to become the biggest soft drinks segment in the convenience channel, growing by 19.6% to £656m, according to IRI Marketplace. Overall, stimulants grew 19.8% to £1.12bn, making it the second largest segment behind cola (which grew by 4.8% to £2.27bn, held back by full-sugar cola, which grew more slowly at 3.2%).
Monster Energy and Red Bull remained the key brands driving category growth, with year-on-year value sales up 30% and 21% respectively.
“While these brands helped meet increasing shopper demand for energy-giving products, there remains significant opportunity for further growth in stimulants, with 91% of the UK population not currently purchasing stimulants,” says Britvic.
‘Pick-me-up demand’
The stimulants category continues to cater for growing need states, with 53% of the population claiming they often feel tired, according to Mintel.
It also represents a strong trade up opportunity for the category with approximately two times higher average price per litre than the soft drinks average.
Stimulants has a core of extremely loyal buyers, with 20% of shoppers accounting for over 75% of volume and buying more than three times per week.
Core variants and flavors continue to be the most popular among shoppers and lead the way in sales, reflecting many consumers’ preferences for the taste of these products.
And yet to grow the category, manufacturers need to push outside of the category’s current state and look for new audiences and opportunities.
“The stimulants category could continue its impressive run of growth by broadening its appeal, as it is currently bought in the main by young, male shoppers. These are valuable consumers, spending considerably more in the take-home category compared with the average shopper. Although a large segment, there is room for growth by broadening the segment’s appeal to more consumers, which is currently only being bought by one in three UK households.”
Diversifying product offerings
Meanwhile, although stimulate consumers gravitate towards core ranges or classic flavors, there’s an opportunity to offer expanded ranges and new flavors.
“17% of sports and energy drink consumers actively seek out new flavours and we have seen this need being met through a variety of NPD and flavour expansions across the brands,” notes Britvic.
“Stocking a range of core stimulants flavours and new variants has been key to the success of the category. Range expansion has been vital in keeping pace with increased demand and retailers should consider stocking a selection of products and flavours to help attract new shoppers into the category, including bestselling brands such as Monster, Red Bull, Rockstar and Relentless.”
Another opportunity is to bring in stimulants and energy drinks that offer additional benefits, with 72% of category users agreeing that sports and energy drinks with added benefits appeal to them. Many people have concerns over how stimulants affect sleep – so manufacturers should consider added benefits around mental and physical performance or gut health.
Retailers need to bring this all together in how they present products to consumers.
“Retailers are advised to stock a range of products that address the key barriers to enter the category and increase the number of users and usage occasions for this category in store.
"This can include stocking larger pack formats to target shoppers consuming energy drinks at home. Larger packs are particularly popular with the 34% of energy drink users who consume these drinks at least twice a week. Take home packs of energy drinks are now worth £46 million and have grown 16% over the past year.”
Sugar reduction: a double-edged...success?
One challenge – or opportunity, depending on how you look at it – is the effect of upcoming HFSS restrictions on the impulse channel in England.
These will put restrictions on high-sugar drinks, a category that energy drinks often fall into.
But this could offer a win-win situation for stimulants. Reformulation and lower calorie alternatives will all stimulants remain in impulse buy locations; but, in reducing sugar, also address consumers' concerns about the high sugar levels in drinks.
“Retailers should consider evolving their energy offering away from just stimulants, giving enough space on the fixture to growing brands in natural energy such as Purdey’s to appeal to these consumers and help them to live a more naturally energized and balanced lifestyle," notes Britvic.
“Natural ingredients appeal to one in three sports and energy drink users. The importance of natural ingredients increases with age and, with the stimulants category being heavily skewed towards younger shoppers, this represents an opportunity to expand the appeal of energy drinks.
“The link between sugar content and stimulants drinks is a considerable barrier to entry in the category, with 44% stating that the drinks containing too much sugar are the reason for them not drinking an energy drink in the last three months.
"Stocking low sugar free variants, which are smaller but growing rapidly, will also help retailers to maximise their sales by addressing this concern while also enabling them to comply with the upcoming HFSS legislations.”
A number of brands are updating their ranges to meet this demand including Britvic distributed Rockstar, which will have its six top bestsellers HFSS compliant ahead of regulations coming into effect.