The growth of the sports and energy sector shows no signs of stopping, with retailers playing their part in fuelling growth, but what trends will help keep this momentum going throughout 2014?
Its growth has been meteoric in recent years and yet sports and energy has still to plateau. Recent figures put growth at 3.1%. One of the reasons for this growth is the work being done by independent retailer to accommodate sports and energy brands in their soft drinks chillers. As Dave Turner, Trade Communications Manager at Coca-Cola Enterprise, says: “Independent retailers are capitalising on the rising popularity of energy drinks which are performing particularly well in the convenience channel. Our See ‘The Opportunity Report’ illustrates the great opportunity for growth in impulse soft drinks.
The energy drinks sector is one of the key drivers for this growth as people look to energise themselves on the go.” As well as increased distribution, innovation has played a major role in the success of the sector, though as Turner admits, the sheer numbers of SKUs out there can present retailers with a headache. “The sector can understandably be a minefield for convenience store owners with so many new variants coming onto the market. With so many different brands, flavours and formats, it can be challenging to understand, which are the right products to stock. Retailers should look to established energy drinks brands that are investing in the future of the sector with multi-million pound marketing campaigns, and suppliers that can offer ranging advice.”
According to Adrian Troy, Head of Marketing for AG Barr, retailers need to ensure that they give energy drinks the space they merit as the biggest and second fastest growing category within impulse soft drinks. “Outlets should take account of which brands and sub-sectors of the category are growing to ensure the range reflects the current trends. In particular, flavoured energy needs to be given more space to ensure retailers can offer consumers the choice they require,” he says. He too points to the trend for development of flavours in the energy category, commenting: “In the 500ml big can format, flavours are fuelling impulse market growth at +43% by value.
Rockstar is leading this growth and seven of the fastest selling 10 500ml product lines are Rockstar flavours.” At CCE, it’s been a good year, with Monster Energy sales up by 5.7% and Relentless growing 4%. Turner predicts further growth this year: “Convenience retailers should expect to see further innovation in flavours and formats in the coming 12 months to help bring new consumers to the category. Sub-segments will also continue to form. Monster Energy has been ahead of this curve following the launch of its Rehab range of still energy drinks in 2012 with a Tea and Lemonade variant.
The success of this innovation led to the introduction of two new flavours – Green Tea and Orangeade – at the beginning of 2013.” He adds that shoppers are increasingly looking for sugar-free variants, so retailers should look to stock these alongside regular versions. Troy at AG Barr agrees that low calorie variants are growing, predicting that it will grow from £43m to £200m in the next five years and Rockstar has launched a flavoured zero sugar big can energy drink. “There is currently little consumer choice available in this growing sector,” he says. “The launch of Rockstar Pure Zero will fulfil both the demand for a low calorie option and the demand for great-tasting flavoured energy. Rockstar Pure Zero is available in a 500ml big can format in our popular Fruit Punch flavour.
The new variant offers the full Rockstar energy hit with zero sugar.” Retailer shouldn’t think fruit flavours are going to stop growing though. The development of flavours remains a key driver of the category. In the 500ml big can format, flavours are fuelling impulse market growth at +43% by value with Rockstar having seven of the fastest selling 10 500ml lines. Rockstar isa strong player in the flavours sector with innovative NPD. Rockstar SuperSours have already delivered over £7m of sales since launching in February 2013 and its BubbleBurst variant is the UK’s second fastest selling Big Can in Impulse. AG Barr has also built on the success of Rockstar Xdurance with the launch of a new variant, Tropical Orange. Price and value are also key to the sector’s success and as of last month a £1 PMP has been available across the Extreme energy and sports range in the convenience channel, to help boost sales at a time of year when consumers are likely to be strapped for cash.
The launch is supported by a van sales distribution drive and in-depot activity where all displays are fully dressed with Point of Sale. The £1 PMP will be available in convenience throughout the next couple of months and again at key seasonal trading periods throughout the year. Vimto Soft Drinks Marketing Manager, Emma Hunt says: “Consumers are always on the lookout for the next big thing within the category and energy drinks are increasingly becoming part of their everyday lives. More drinking occasions for energy and sports drinks are emerging all the time and it is important that independent retailers are on the front foot to capitalise on the opportunities this presents.There has also been a significant rise in 18-34 year olds participating in extreme sports, more than any other group of outdoor sports. Therefore, there has been a rise in demand for sports drinks from this audience.”
- Merchandising tips from CCE Q Merchandise energy drinks together on the fixture so shoppers can quickly identify and grab what they want when on the move.
- Stock energy drinks close to the centre of the chiller as they are one of the top performers in the soft drinks sector
- Ensure to block brands together so they are easily identified as shoppers will look to brands they know and trust to deliver on quality
- Where possible, ensure a minimum of two facings per SKU, three for best sellers
- Always stock a balance of branded and value to give consumers choice
- Shoppers are increasingly looking for sugar free variants. Stock these alongside their regular equivalents
Finding energy in milk
Energy milk drinks, or functional milk drinks, are becoming an interesting sub-sector of the energy market. Enco Products has taken its Nurishment brand into a new, growing market sector with the launch of Nurishment Active, an enriched milk drink specially formulated to help the body recover after exercise. Nyree Chambers, Head of Marketing for Enco Products says: “There is growing interest in the use of milk as a rehydration solution as it’s a natural provider of water, sugar and electrolytes. This has led to the development of innovative enriched milk drinks such as Nurishment Active, where vitamins, minerals and protein are added to milk to create the ideal sports recovery product.” Nurishment Active is available in Vanilla, Strawberry and Chocolate flavours. Nrich is another such product.
Having relaunched last September in the functional milk drinks market, it is continuing to deliver strong sales, with flavours including Chocolate, Strawberry, Vanilla, Banana and Peanut. Jag Singh, marketing manager at Nrich, says: “The category is becoming ever more crowded, and it is inevitable that there will be a natural clear-out. Milk drinks I believe have a very significant part to play moving forward. The debate rages on about the right types of energy drinks that consumers can or should use for different occasions. The case for good milk based drinks has already been made by health professionals. The next step is communicating this to consumers so that they can make the right choices for their every-day sports and energy drinks needs.”
Giving indies a Boost
Created specifically for the convenience channel, last year saw the launch of Boost’s biggest trade campaign to date – Champion of the Independents – which is designed to raise awareness that Boost is the only brand dedicated to the independent retail sector. Boost’s Founder and Managing Director, Simon Gray, says: “We are still totally focused on this sector of the market today. We wanted to remind our customers about this, so we launched our Champion of the Independents campaign to do just that.”
The Champion of the Independents campaign will continue in 2014 and includes in-depot displays, direct communications and a range of useful branded items to reinforce the campaign message. Gray adds: “We are an independent company ourselves so recognise and understand the needs of our colleagues in the business.
This campaign – which will continue in to 2014 and beyond – demonstrates that Boost is, and will continue to be, a champion of the independent retail sector. We are confident that this is the right strategy for us as a business and will continue to support it as, when it comes to consumer purchase behavior for soft drinks – particularly sports and energy drinks – independents have a major advantage over the multiples.” Boost covers all three sectors of sports and energy drinks – stimulation energy, glucose and sports/isotonic – including both plain and price-marked packs.
The company has recently launched a limited edition 49p PMP on the 250ml Boost Energy can in all five variants – Original, Sugar Free, Cola, Citrus and Orange & Mango. The promotion is designed to further drive sales and still offers a great value price to consumers and a great profit margin, like all the products in the Boost range. Gray says: “This is a limited edition PMP promotion designed to drive sales and the Boost Energy 250ml can is one of our best-selling products already, so we are confident that this will be a successful tactic for our customers for 2014.”
Full On opportunity
Best-in is launching the an own-label energy drink called Full On as sales of its energy and sports drinks portfolio continue to perform strongly. The new product is packaged with its silver and red identity emblazoned on a jet-black background giving a unique and individual look. Inside it is equally impressive delivering multivitamins including Niacin, Vitamins B6 and B12 with a great tasting stimulation and energy boost. Full On is price marked at 35p and is available at a launch price of just £3.79 for 24 x 250ml cans – giving an impressive POR of 45.8% – from this month. Nick Brown, Trading Manager for Best-in says: “Full On fits perfectly into our portfolio of energy and sports drinks. Our research identified a gap for a brand that young adults could feel comfortable drinking. Young adult consumers want an energy product that delivers and also looks the part.”