Energy Drink Profits

Energy drinks are continually proving to be resilient and adaptable, especially within convenience sector.

According to the Australasian Association of Convenience Stores (AACS) 2018 State of the Industry Report (SOI), energy drinks showed strong growth in 2018 despite a “weaker than average 2017 performance”.

The SOI said energy drinks were the standout performer of the key categories, and held 29% of the dollar share, which was 5.5% increase in the dollar growth from the year prior.

Overall, 23% of the total beverage penetration was from energy drinks and the total beverage category has increased in basket penetration up from 70% in 2017, to 73% in 2018.

The landscape continues to be dominated by the big brands including Frucor Suntory and Red Bull, while a few new beverages are making waves within the fridges including Remedy, Carabao and Coca-Cola Energy.

Remedy Drinks co-founder Emmet Condon said, “Remedy’s own market research found that 62% of millennials who had consumed kombucha in the month prior had also consumed energy drinks a the same time”.

“We felt this identified a clear opportunity to create a healthier alternative to the sugar and chemical-laden energy drinks already on the market.”

New Players and Healthier Alternatives

Remedy Kombucha has proven itself to be a front runner in the Kombucha segment but it has now expanded its kombucha range to include a new take on the much-loved beverage; Remedy Good Energy.

According to research conducted by Remedy, two-thirds of millennials have tried kombucha with third drinking it regularly.

Mr Condon said, “our research unearthed a tension between people wanting to make a healthy choice, but also needing an energy boost”.

“On one hand, people are going with their gut and drinking Kombucha, but then also smashing a few energy drinks on the side. So we decided to make it right and develop an energy drink thats actually good for your mind, body and guy,” Condon said.

“Remedy Good Energy contains all the goodness and benefits of Kombucha including live cultures, organic acids, and antioxidants with the added good vibes and good energy buzz of raw green coffee bean extract, green te and ginseng for  smoother, more enduring real energy kick minus the nasties.”

“Remedy Goog Energy doesn’t contain any sugar or artificial ingredients usually found in traditional energy drinks.”

“Until now, there hasn’t really been a healthy, tasty alternative to traditional energy drinks. Remedy Good Energy is a market first and one we think people will jump onboard with having already been bitten by the Remedy booch bug,” Condon said.

Another new player in the energy segment is Coca-Cola who has relesed a new energy drink. Coca-Cola Energy was launched in Europe in April and it’s Australia launched followed in June.

The beverage contains caffeine and guarana extracts and will be available in two variants, one of which is no-sugar.

InsideFMCG reported Coca-Cola Australia’s marketing director Lucie Austin said, “We’re launching Coca-Cola Energy with and without sugar and we’ll continue to expand and diversify our range of products to offer Aussies a wider choice of drinks.”

“We think it will appeal to busy people on the go who are looking for an extra energy kick with a great Coca-Cola taste,” Ms Austin said.

Carabao, an energy drink that launched in late 2018, had a huge global growth before landing in Australia.

According to Carabao’s head of sales Dan Tjahjadi, the biggest point of difference is, “the fact that we are sugar tax ready. We have up to 60% less sugar than all the major competitors on our original and green apple flavours.

The new energy drink is already receiving great feedback from retailers stocking the product.

Director of the Dunn Group Ben Dunn said, “All the flavours have sold particularly well with the Apple really surprising me being no.1 at several of our stores, the Sugar-Free in Energy for us has traditionally underperformed across all banners however Carabao Sugar-free has also been a surprise”.

“Feedback from some of our female customers, in particular, is that they prefer the Carabao products specifically for the sugar content,” Mr Dunn said.

“Pricing across all SKUs is in line with competitor’s pricing but it’s Carabao’s appetite for promoting their brand with strong in-store support from their team that is refreshing.”

Kanguru is another brand that is a recent addition to the market. After four years of development and 1,982 samples before finalising, the product hit the market in 2018.

Kanguru Founder and CEO David Kitchen said: “Kanguru stands alone as a pure play sugar free, better for you energy and vitality brand”.

The caffeine content in Kanguru is 100% derived from five premium super-botanicals.

Mr Kitchen said Kanguru is the: “healthy alternative in the convenience market and energy category with real energy and real benefits beyond a pure caffeine-derived boost”.

Mr Kitchen champions Kanguru as “the local hero”, being that it is an Australian company founded by Mr Kitchen himself, a medical professional.

“I undertook this long research using a scientific evidence-based approach to ensuring only the highest quality and most effective ingredients were included, and at real beneficial amounts, not a token marketing amount like many others,” Mr Kitchen said.

“It’s a sugar-free (and we will never make a sugar-reliant product) energy plus vitality beverage calling upon a synergistic combination of 5 super-botanicals unique to Kanguru: Korean Red Ginseng, Yerba Mate, Guarana, Schisandra and Green Tea.

“These are the ‘dream team’ of botanicals after excluding dozens of others, resulting in an unrivalled multi-functional formula.

“All delivered with complex B-vitamins in a better for you multifunctional beverage that is not only good for you, but tastes great.”

Whilst Kanguru sits comfortably within the energy drink category, Mr Kitchen said it could also easily sit in the healthy and functional beverage category as well.

Mr Kitchen said: “Energy brands are predominantly an impulse purchase and as a result the convenience channel is essential for reaching consumers in need of a healthy energy and vitality boost”.

Mr Condon said: “Energy drinks currently make up approximately a third of all beverage sales in Petrol and Convenience stores and we know that naturally no sugar and organic ranges are delivering extremely strong growth in this segment making Remedy Good Energy a solid choice when looking to shake up your energy drink range in store”.

“Early sales in grocery already indicate there is a strong appetite for healthier, tastier alternatives to traditional energy drinks which is where Remedy Good Energy fits in. There will always be shoppers who want a healthy beverage and with the extensive Remedy range from Remedy Kombucha through to Remedy Switchel and now Remedy Good Energy, there is literally a Remedy drink for everyone and every occasion.

“Start ranging with top selling Remedy flavours to capture incremental sales instore ensuring enough space is allocated to better-for-you beverages given it’s such a fast growing segment,” Mr Condon said.

Mr Kitchen said: “Healthy, sugar free beverages rank as one of the top purchasing priorities in both domestic and international consumer studies”.

“Allocating space to these emerging brands across the beverage category, will set retailers apart and attract new conscious consumers to the door.”

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