The $1.1 billion energy drink market has experienced phenomenal growth of over 700% in current terms between 2000 and 2005. Teens and young adults remain the primary target of manufacturers, and marketers have thoughtfully positioned their beverages in the marketplace, creating an energy drink for every young lifestyle. Many, linked to extreme sports, represent adventure and rebellion. Others seem to offer a party image. Some niche brands have aligned with personal interests, such as music and spirituality.

The tremendous sales growth of this category has been driven by the right product meeting the right group in the right place. Young people seek a way to get the most out of their free time and fun time; added energy is a solution. Furthermore, this group often visits convenience stores, which sold nearly half of all energy drinks (off-premise) in 2004.

The energy drinks category will have great difficulty keeping up the rate of growth seen in the past six years. The market is likely to show some changes in the near future, including consolidation of some of the 1,000-plus players, both large and niche. To survive, manufacturers will need to develop strong and unique positions in the marketplace, as well as hearty distribution networks.

For the purposes of this report, energy drinks have been defined as beverages that specifically claim to provide an energy or stimulation boost. These products also have a marketing positioning which stresses energy. Many generally include active ingredients such as glucose, caffeine and taurine, as well as other health-oriented ingredients such as ginseng and various vitamins and minerals. The market size figures shown in this report are based solely on estimates of off-premise sales, although an estimate of on-premise sales is calculated and discussed in the text.

Excluded from this report are:

mind/body health drinks, marketed broadly as “lifestyle beverages” and “healthy refreshment.” they range from being herbal adult soft drinks and teas to drinks making specific claims of promoting stress relief, mental rejuvenation and a boost to the immune system.

sports drinks

soft drinks

diet aids (e.g. Slim-Fast) and meal replacement products (e.g. Ensure)

powdered/protein drinks

vitamin fortified fruit juices

The popularity of energy drink components has brought about some new products, which are combinations of categories. For example, in October of 2004, Budweiser announced its imminent launch of B-to-the-E, a beer with ginseng, guarana and caffeine. These types of products are not included in the sales figures but are addressed where appropriate.