CHICAGO — The energy drink market is experiencing unprecedented growth, fueled by changing consumer preferences and lifestyle trends, according to a new report from NielsonIQ (NIQ).

With more than $22 billion in sales in 2023, the energy drink market has shown sustained strength in the ready-to-drink aisle. And while Nielsen found that key players continue to dominate the market, the landscape has also seen the rise of smaller, niche brands catering to specific consumer segments, such as organic, natural and low-sugar options.

Additionally, the fallout from the COVID-19 pandemic has continued to reshape the market, with consumers prioritizing convenience and on-the-go consumption.

With that in mind, Nielsen has focused on four primary trends that it believes will continue to affect the energy drink market moving forward.

1. Health & Wellness Demands

Last year, food and beverage searches for “contains caffeine” grew 17% and searches for “high caffeine” saw a 113% increase. Conversely, 30% of consumers sought low sugar when buying food and beverages, while 29% looked for no added sugar.

This high interest places many energy drink brands into a prime position to leverage a growing market share in the wellness industry, especially for those that offer low-sugar or sugar-free options, the market research firm stated.

2. Innovative Products

In the last year, Nielsen recorded 258 new item launches in the energy drink category, many with unique functional claims and ingredients. The company notes that continuous innovation can help companies boost overall growth during times of volumetric slowdown. NIQ data has shown that manufacturers growing innovation sales in 2022 were nearly twice as likely to grow overall sales than those with stagnant or declining innovation sales.

3. Different Trends by Channel

Energy drink sales are up across the board, but different sales channels have been growing at different rates.

For example, Nielsen found volume growth lagged in c-stores even while distribution remained strong. Additionally, 82% of energy drink shoppers in c-sores planned their purchases ahead of time vs. only 73% of shoppers in other venues.

Nielsen suggested adjusting promotional methods to meet the needs of customers within a particular channel will be more effective in growing both sales and volume, helping energy drink manufacturers maximize their value.

4. Instant Hydration

The rising health and wellness focus in the United States has helped to benefit other beverage silos as well, including instant hydration products, which had $543 million in dollar sales in the past year, according to Nielsen.

With stiffer competition now vying for the attention of consumers post-workout, Nielsen suggests energy drink manufacturers will need to find ways to accurately position their products to combat alternatives through both promotional marketing and innovative product attributes.

NielsonIQ is a consumer intelligence company which provides market research and insights to aid companies in making informed decisions.

Extracted in full from: https://csnews.com/four-trends-impacting-energy-drinks

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