Energy drinks off, running

Chain Drug Review, May 24, 2004

NEW YORK -- Sales of energy drinks leaped 42.7% in the drug channel in 2003, with Red Bull GmbH leading the way with a market share of over 50%.

While many compare Red Bull's dominance of the segment to PepsiCo Inc.'s commanding position in the sports drink segment with Gatorade, industry observers think the leading beverage manufacturers will soon begin to erode Red Bull's share.

PepsiCo is currently selling PepsiX, a so-called energy cola, in 8.4-ounce cans outside of the United States. If it and Coca-Cola Co. get into the energy drink category here, Red Bull will have a battle on its hands.

Both Coca-Cola and PepsiCo entered the bottled water segment a bit late but with a flourish, and they have now become the two leading manufacturers in the category.

However, Red Bull has built a fiercely loyal following among young people, and retailers are impressed with how it has maintained its $1.99 pricing level for a 6-ounce can.

Hansen Natural Corp. has two popular brands in the category as well--Hansen's and Monster--and it plans to soon launch a low-carbohydrate version of the latter.