Market gets a boost from energy drinks: alternatives to sports drinks are gaining globally and drinkmakers are answering demand

DSN Retailing Today, July 25, 2005 by Mike Duff

Muscling up presentation and more carefully targeting demographics have generated a resurgence in energy drinks that has propelled beverage makers of all stripes.

Hansen's first-quarter sales increased 90.3% to $73.7 million and net income increased 400% to $8.8 million, driven by what ceo Rodney Sacks characterized as the exceptional performance of Monster Energy drinks, including Lo-Carb Monster and Monster Energy Assault, introduced in September 2004; Lost Energy drinks, roiled out in January 2004; and Joker energy drinks in 16-ounce cans, introduced in January 2005.

To keep Monster stoked, Hansen did a motorcycle giveaway this spring. "We are the only one doing ]major consumer] promotions in energy drinks,' said Sam Pontrelli, Monster Man, a title that translates into vp of marketing.

In contrast, the company's more established products, including Hansen's Natural Sodas, Hansen's energy and functional drinks, Energade sports drinks and E20 Energy Water drinks suffered softer sales.

Energy drinks are gaining globally. In its recent "What's Hot Around the Globe" report, ACNielsen noted that energy drinks grew at a 10% rate in the 59 markets examined, including the United States and Canada. Energy drinks have gained favor worldwide, with Europe, at a 17% growth rate, particularly enthusiastic.

As the Hansen case suggests, vendors seem to be keener on the "recreational" rather than sports energy drinks and are responding with new and retooled products. Coca-Cola, for example, launched Full Throttle in the first quarter. Full Throttle has all the characteristics--metal can, macho name and heavy metal graphics--of the newer energy drinks aimed at young men 20 to 30. Coca-Cola has launched a new sports energy drink, but characterizes it as an attempt to grab some of Gatorade's share. Full Throttle seems more of a departure and an attempt by Coca-Cola to enter the growing energy drink category.

"Energy drinks continue to demonstrate strong growth and we see this as an opportunity to

compete more effectively in a profitable beverage category," said Scott Wiiliamson, a Coca-Cola spokesman. "Full Throttle is a brand that we believe will speak to core users of energy drinks in an engaging way." Like most newer energy drinks, Full Throttle gets its charge from more than sugar and caffeine, adding ingredients such as ginseng extract, taurine, guarana extract and B vitamins.

Even if they borrow a few New Age ingredients, Full Throttle and its ilk aren't going soft. Attitude still counts. In describing his new product, Tim Baggs, ceo of Charge Beverages, said, "Liquid Charge is for the person who craves the entire edge, not just a piece. This is the first in a long line of many upcoming products from Charge Beverages that will help you keep that balance throughout the day and well into the night."

Liquid Charge does depart from the usual foundation for recreational energy beverages, even though its ingredient list includes caffeine, taurine, guarana and ginseng. Liquid Charge is a malternative that contains 6.9% alcohol by volume. Other recreational energy drinks may be combined with alcohol for that long night's buzz, but Liquid Charge saves consumers a step and adds the alcohol for them.