Viral sales

Energy Drinks: Red Bull

Coronavirus has turbo-charged sales of sports and energy drinks during a period when they are traditionally already strong, so how do retailers make the most of the opportunity?


Early summer is normally a good period for the soft drinks category in Scotland, particularly as we often get our best weather in May and June, but this is clearly not a normal summer. The spike in sales that retailers would ordinarily expect has been given a turbo boost by the effects of the current Covid-19 pandemic and consumers rushing to their local stores in preference to the long queues and potential contamination risks they may run in supermarkets.

Matt Gouldsmith, Channel Director, Wholesale at Lucozade Ribena Suntory, says: “A spike in sales can normally be expected at this time of year given the weather and increased summer events, and when the sun comes out this can be boosted even further. However, this isn’t a typical summer due to coronavirus, meaning it’s more important than ever that Scottish retailers pay close attention to the needs of their customers and adapt their soft drinks range accordingly throughout the warmer season.”

Gouldsmith points to hydration as a key driver in warm weather with soft drinks sales increasing by 1.6% for every 1-degree temperature change – and that’s before the effects of coronavirus.

That means paying close attention to both instant consumption lines and take-home packs, as Gouldsmith explains: “This makes it crucial for retailers to have their drink-later soft drinks range, such as Lucozade Energy’s portfolio, including 1L bottles and multipacks, which has seen strong growth of 20%. This will help shoppers enjoy the warmer weather and BBQs in their gardens as well as elsewhere, when the lockdown restrictions begin to lift.”

Energy is, of course, the biggest category within Scottish ‘drink now’ soft drinks worth £122m [IRI, Feb 2020], so it is critical that retailers get it right in-store. In fact, for the past decade, energy drinks have been the fastest growing segment within the wider Soft Drinks category [Euromonitor, 2008-2018] with growth predicted to continue for the next five years [Mintel Sports & Energy Drinks Report 2019].

“Energy is an exciting and fast-growing part of the Scottish soft drinks market delivering the highest profit per litre for retailers, with over one in three soft drinks sold in convenience stores being an Energy drink [IRI, Feb 2020],” says Adrian Troy, AG Barr’s Marketing Director.

“Consumers are increasingly opting for flavoured variants when choosing an energy drink, with flavoured energy now accounting for 34% of the mainstream energy market and growing faster than original energy [IRI, Feb 2020].”

Red Bull also says that products that deliver added value for a range of summer occasions, such as multi-vitamins, protein or a functional energy boost, continue to be popular. Summer clearly presents various opportunities for retailers to boost sales of soft drinks, as customers look for cool, refreshing options.

Red Bull merchandising advice
  1. Space
    • Red Bull advises retailers to stock the most effective range to drive the greatest value
    • Category space should be aligned with share of value sales to maximise sales
  1. Focus on top five brands
    • 50-60% of Soft Drinks space should be allocated to the top five brands
    • Ensure 60-70% of space for Sports & Energy brands, in line with share of the category
  1. Vertical blocking
    • Shoppers only see products within a 1.3m breadth
    • Vertical blocking helps shoppers to easily find the product they are looking for improving their ease of shop

NPD

Thankfully, there’s plenty for retailers – and shoppers – to get excited about in the vital sports and energy category. Red Bull, the UK’s number one energy drink brand, is bringing a new taste to the market with Red Bull Zero. The new Red Bull Zero formula delivers a similar taste to the classic Red Bull Energy Drink but with no sugars.

Red Bull believes this gives consumers the choice to enjoy a zero-sugar product with a different taste than Red Bull Sugarfree, but the same “wiiings”. The reformulated Red Bull Zero offers shoppers more choice for those moments where they’d rather have less sugar. Alongside diet offerings experiencing growth, Zero variants are growing +20.7% [IRI, Sep 2019] displaying growing demand for zero calorie options.

Lucozade, the UK’s biggest sport & energy drink brand, has also tapped into the no-sugar trend with the recent launch of a new sub-brand. Sweetened with stevia, and with 4.3g sugar per 100ml, Lucozade Revive is designed to offer a different type of energy. It’s not a boost or a buzz, says the company, but a naturally inspired uplift that makes drinkers feel revitalised and back in the groove. Revive has natural fruit flavours, no artificial colours, and vitamins B3, B5, B6 and B12 to help reduce tiredness.

Lucozade Energy has also introduced a new addition to its £66.8m flavours range ahead of the summer season. Lucozade Energy Citrus Chill, a new lemon & lime flavour, is available in 380ml PMP and standard packs.

Meanwhile, Rockstar recently launched Baja Juiced El Mango, packed full of real mango juice, guarana, ginseng, B-Vitamins and caffeine. As higher caffeine energy drinks are delivering strong market growth in the USA, Rockstar XD Power has also been launched to offer a different proposition to current energy products, appealing to the 61% of men in the UK aged 16-34 who use supplements.

The performance is delivered by 200mg of caffeine per can, complemented by branched-chain amino acids and B vitamins, which directly impact energy levels and brain function.

PMPs

According to LRS’s Gouldsmith, price-marked packs remain important for retailers when it comes to demonstrating value to energy and sports drink shoppers.

“They need to be balanced alongside shopper insight and store-specific requirements in order to meet the needs of consumers,” he says. “To help retailers make the right choice on what to stock we offer the option of price-marked or non-price-marked packs across our range of soft drinks, including leading-brands Lucozade Energy and Lucozade Sport.”

Drink later

One trend that is worth noting is the growing importance of larger format and multipack offerings, as Gouldmsith comments: “Scottish independent retailers are a critical part of our business and we are constantly looking to adapt our offering to support them in the best way we can. One way we’ve achieved this is by offering new drink-later formats to suit the trends resulting from Covid-19.

“The small changes retailers make this summer will help to secure new loyal customers in the future.”

Top dogs

Of course, no retailer can afford to be without Red Bull Energy 250ml, the company’s best-selling SKU and the single most valuable soft drink in the UK. Red Bull Energy Drink 250ml is worth over £144m and continues to grow year-on-year [IRI, Sep 2019].

Another important brand in Scotland is Irn-Bru Energy which, says Barr Soft Drinks, established itself as “last year’s fastest-selling soft drink in Scottish convenience” [IRI, Jul 19].

Key Trends

Adrian Troy, Marketing Director at Barr Soft Drinks identifies key trends driving the growth of Energy:

  • Flavour: Taste is the No.1 reason for a consumer to choose a soft drink and Energy shoppers are looking for more than functionality from an Energy product. Retailers need to ensure that Energy gets its fair share of space on the fixture in order to offer the choice of flavours that shoppers are looking for and ultimately increase their profits.
  • Innovation: Energy consumers like to try new flavours and retailers can keep their fixture exciting by ensuring they make enough space on their fixture to include NPD in their chiller.
  • Sugar: Sugar is an important component of energy for the majority of consumers, but a growing number are looking for a lower calorie or even sugar free option. Some energy drinkers may want zero sugar energy, but they don’t want it to look, feel, perform or taste different to regular energy drinks.