By Jeffrey Klineman
THREE YEARS AGO, in an effort to revive the flagging Full Throttle franchise, Coke stripped things down. The company removed much of the taurine, guarana, b-vitamins, and other ‘mystery ingredients’ common to energy drinks from the product, streamlined the can, and went with a formulation that incorporated sugar, caffeine, and very little else in the way of energy boosters. Pepsi, meanwhile, went the other way, moving its own native brand, AMP, into a multi-sku line and eventually remixing the product to meet a variety of energy-related need states, like “Focus,” (with l-theanine and choline) “Active,” (with electrolytes) and Boost (with pretty typical stuff). While the most outstanding energy drink brands remain, by and large, independent, the relative sales performance of bigcompany entrants AMP and Full Throttle since that time reflect the prevailing wisdom in energy drinks, that more is more. AMP, with its broader focus, has performed better, while Full Throttle is on the verge of slipping out of the top 10. The divergent results – and the current crop of line extensions and highly-focused category entrants – show that in a category with several large players, much of the growth is coming out of niches. The large scale “hit-em-where-they-ain’t” innovations – like adding more caffeine or growing the size of the drink itself (note the success of Monster and Rockstar, both of which initially grew the category by going to 16 oz. cans) have been important for the success of energy brands, but as the category has matured, the growth is coming from innovative remixes featuring a growing array of esoteric ingredients and functional blends. A look at the brands that have ascended against the Coke and
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Pepsi entries demonstrates the rule: Monster has grown not just vertically, but has broadened its line horizontally as well, adding an electrolyte-infused Rehab and a coffee-laden Java Monster variety to its core offerings. It is also on the verge of mixing in protein as yet another functional ingredient. Monster competitor Rockstar, which pioneered the energy/recovery category, also continues to break new ground by adding coconut water (Rockstar Coconut Water) and branched-chain amino acids (Rockstar XDURANCE) to other varieties. In a slightly counter-intuitive move, Rockstar has also added a relaxation sub-brand, Rockstar Relax. The other entrants into the category, new and old, are trying to keep the pace. “A lot of my customers are trying to differentiate their energy brands by adding a function, or a claim for a function, so that consumer sees a little more value beyond a standard energy drink,” said Walter Orcutt, the EVP at NVE Pharmaceuticals, a contract energy drink and energy shot manufacturer. “I think it’s happening even more rapidly now than it has in the past.” Take a look at the variety of new ingredients and functions and the energy drink category begins to look like an amped-up mirror image of the entire beverage industry. Sure, there are varieties in cola, coffee, tea, juice, water, and even – for a while, anyway – beer, but there are also on-trend launches and line extension that incorporate, in addition to protein or coconut water, Aloe Vera, acai, GABA, polyphenols, tea catechins and many others, including fat-burning and “sensation”-oriented effects. The cause of this varietal explosion? Competition, say most beverage executives.