An Instant Hit

1st March 2013

Heather Harris samples the energy drink market

Forget the recession – there’s one sector of the economy that needs no stimulation: the ‘energy drink’. With sales now as sky high as the heart rate of their consumers, this new type of soft drink is proving an industry winner. Water just doesn’t do it any more.

Red Bull led the charge, launching in 1987 onto a public who were previously happy to jump-start their day with nothing more precise than a few cups of instant coffee from the office vending machine. Now selling over 4.5 billion cans a year, Red Bull was actually discovered in 1982 by an Austrian entrepreneur named Dietrich Mateschitz. On holiday in Thailand he tasted a native brew, Krating Daeng, popular with local overworked labourers and truck drivers, and found that it helped to cure his jet lag. Spotting its potential, when he returned home he contacted a pharmaceutical company, came up with a name and he’s now bubbling under at number 193 on the Forbes Billionaires List…

…which must be hard to swallow for all the boffins at one of Britain’s largest multinationals, GlaxoSmithKline, who (fuelled by caffeine, no doubt) had spent every waking moment between 1984 and 1989 on the reinvention of Lucozade. This amber nectar, concocted in 1927 by an Irish chemist, was the tipple of our Seventies childhood. Wrapped in cellophane, it was found at the bedsides of sickly children all over the country until equally sickly sales forced its revamp.

With a major advertising campaign backed by celebrity Olympian Daley Thompson, its image was changed from a drink that ‘aids recovery’ to one that ‘replaces lost energy’. Sales tripled. Soon the distinctive Lucozade Extra bottle, with a new ‘sports cap’ to top off its relaunch, was seen at all major sporting events (and at most children’s football/netball matches), and was giving Red Bull a run for its money.

Own brand energy drinks started to appear on the shelves of the major supermarkets, soft drinks’ companies including Britvic and Coca-Cola quickly leapt on the bandwagon, and in the last five years, over 200 new products have flooded the UK energy drinks’ market – but it has still not reached saturation. Market analyst Mintel announced last year that the market for glucose and stimulant drinks had increased by 20 percent since 2009 to £1.1 billion annually.

This is predominantly because Red Bull, Lucozade and their team mates have come out of the changing room and onto the main playing field. As the Mintel report also stated: ‘While these drinks may have started off as aids to physical exercise, they are increasingly filling a more holistic lifestyle need especially for 16 – 24 year olds.’

Half of the UK population now admits to regularly downing a can, either as a daytime stimulant or as a mixer: according to my teenage children a can of Red Bull and vodka has replaced a bottle of cheap cider as the current party tipple, a fact that gives me sleepless nights as well as them.

In our increasingly frenzied ‘work hard and play hard’ culture anything that promises to provide a mental and physical boost is guaranteed success – despite its taste.

Ironically, the unpalatable fact is that (forget the marketing spiel) these drinks have all the flavour of industrial floor cleaner and candfloss, the latter due to the huge amount of sugar and/or sweeteners included. And that’s the problem: to give them their intended hit, the basic recipe has to include a heady mixture of methylxanthines (including caffeine), B vitamins and herbs. Top this up with some carbonated water, guarana, yerba mate, açaí and taurine, plus various forms of ginseng, maltodextrin, inositol, carnitine, creatine, glucuronolactone, and ginkgo biloba and the result is more Michelin tyre than Michelin star.

The manufacturers of Red Bull have swallowed their pride and come clean. Revealing their plans to launch ‘Editions’, they admitted “The three fruit filled variants of lime, cranberry and blueberry are aimed at those customers who like the effects of our product but not the flavour.” A marketing campaign to raise awareness among the 4.5m people who reject energy drinks specifically on account of taste is scheduled to launch this month. It’s the obvious step. Simon Hewitt, Head of Category Marketing at Red Bull, explained: “By addressing the barrier of taste, we expect to drive increased penetration and grow the category…”

Simon Stewart, Marketing Director at Britvic, didn’t bottle it either, when he bravely announced their new energy drink. “A key barrier to consumption has historically been the lack of innovation in taste. We have worked hard to ensure that our Mountain Dew Energy is formulated to stand apart from competitors with its citrus flavour and light carbonation.”

No mention of an actual lemon or lime sneaking its way into the mix then?

Meanwhile over in the labs at GlaxoSmithKline the men in white coats have recently discovered their feminine side. Recognising that the majority of drinkers buying stimulation in a bottle were men, they came up with Lucozade Revive – ‘A 50 calorie, light sparkling drink made with natural flavourings and B vitamins’ – to capture the exhausted multi-tasking women market.

Not to be outdone, coffee giant Starbucks adopted the ‘if you can’t beat them join them approach’, and in March last year, skinny vanilla latte drinkers were invited to swap their mugs of froth for a Starbucks Refresher, which promised to deliver ‘thirst quenching refreshment ‘from real fruit juice and a ‘boost of natural energy’ from green coffee extract. A clever marketing ploy: eyebrows, as well as pulses, were increasingly being raised about the long term effects of boosting our body with cans of chemicals. While the original popular pick-me ups such as Red Bull and Lucozade Energy delivered a dose of caffeine equal to a cup of coffee; latest editions, the aptly named Relentless and Monster, can contain a hand-shaking twice that amount.

Schools here have now started to ban energy drinks from the playground and the playing field, having seen the amount of water that pupils were drinking fall, resulting in classrooms full of hyperactive 11 year olds, and increased headaches (for pupils and staff alike). In America last year medics even claimed in the Journal of Pediatrics that some energy drinks could cause ‘seizures, mania, stroke and sudden death’ in children, while researchers from Vermont University found that those hooked early on the buzz of energy drinks could be more susceptible to drug addiction.

The UK Food Standards Agency has been more dilute in its views remarking that all stimulant drinks do carry a warning stating that they should be avoided by children, diabetics and pregnant women, but that they ‘do not pose a serious health risk if drunk in moderation’.

Quite what ‘moderation’ is they didn’t say… and, as we all know, marketing men aren’t paid their bonuses for nothing, so, faced with a fall in the number of cans drunk, manufacturers have simply increased the size and bumped up the price. In fact tiny caffeine ‘shots’ are the only area of the energy drink market to lose their fizz. Clearly customers want their buzz big in size as well as effect.

Mintel predict that this demand will keep the industry on a high for a few years yet, seeing the market growing ‘to a value of £2 billion by 2016’…

Just in time for the next Olympics – when we’ll be so full of all that chemically induced energy that we’ll surely speed past the green tea supping Chinese to take prime position on the medal table – and what a buzz that will give us…

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