Sugar-free giving Sports & Energy market wings

Red Bull

The Sports & Energy category is in solid growth and continues to drive the market with the key manufacturers working hard to energise the market with low- and no-sugar lines.

Great news for local retailers in Scotland is the fact that the Sports & Energy category continues to grow at +1.4% in value and +1.9% in volume YTD [IRI, 2017]. The once-stellar growth figures that the category posted in the past have unsurprisingly come to a halt, but the fact that the category is growing at almost 2% by volume is welcome news.

As the number one sub-category in independents, symbols and forecourts, the Sports & Energy sector has continued to drive growth in the last three years to 2016, thanks to an increased spend from Functional Energy drinkers. This trend is set to continue with the category expected to grow 10%, to £1.398bn by 2020. In Scotland, energy is worth around £135m [IRI, Nov 2017].

One of the star performers has been Red Bull, which in 2016 became the UK’s number one single serve drink, overtaking Coca-Cola Original 500ml. The brand is outpacing the category with impressive growth figures of 4.4% by value and 5.2% by volume [IRI, 2017].

Rich Fisher, Category Development Manager at Red Bull UK, comments: “Surpassing Coca-Cola in 2016 played a massive part in contributing an additional £5.6m to the overall brand (+4.4% in value vs. 2015, IRI Dec 16). This demonstrates that consumers are willing to pay more for a premium brand that delivers added value.”

Fisher says the focus these days however is shifting towards what he terms ‘positive everyday energy’. He says: “With both consumers and legislators driving demand for low calorie products it is important to stock sugar-free and diet options to offer choice.”

Give your sales wings

To help retailers maximise sales, Red Bull offers the following advice:

  • Ensure you have the right range. Within Energy, sizes are driving category growth, with core continuing to contribute significantly to share.
  • Focus on the key SKUs, giving them the right amount of shelf space to maximise sales. Allocate 50-60% of Soft Drinks space to the top five brands. Ensure 60-70% of space for Sports & Energy brands, in line with share of the category.
  • Merchandise the fixture from left to right: Refresh, Stimulate, Hydrate.
  • Merchandising signpost brands at eye level improves shop-ability of the fixture by providing a clear starting point for the category.
  • Vertical blocking helps shoppers to easily find the product they are looking for.

Coca-Cola European Partners also sees sugar-free and low calorie as key the future health of the category. Amy Burgess, Trade Communications Manager at CCEP, says: “The Monster Energy Ultra range, which offers four zero sugar fruit flavours, has seen a huge increase of over 112% in the last year [Nielsen, Sep 2017], as much of the success of the energy sector is coming from innovation in low or zero sugar variants.

“In 2017 we also launched Monster Hydro, a non-carbonated energy product with a resealable wide mouth bottle. Ideal for those with fast paced lifestyles, this launch tapped into the growth of refreshment energy segment, as people look to hydrate whilst on the go.”

AG Barr is also focusing on the low-calorie market with its latest category-boosting range, Rockstar Revolt, which comprises two 500ml variants, Killer Citrus and Killer Cooler. These zero-sugar energy drinks don’t compromise on look, taste or energy boost and feature impactful camouflage pack designs.

Similarly, Lucozade Zero was launched in 2016 to help retailers tap into this segment and was most popular soft drinks launch of 2016 [IRI, Nov 2016]. Lucozade Zero is still growing at 61% [IRI Nov, 2017] year-on-year, illustrating the popularity and importance of zero-sugar soft drink options.

Size matters:
  • Core represents 42.6% of sales, whilst occupying just 30.7% space on shelf
  • Sizes account for 14.3% of sales, with only 12.8% of space on shelf
  • Flavours account for 21.1% of sales, yet currently receive 35.6% space on shelf. [IRI, Feb 2017]