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              Energy Drinks and Shots: U.S. Market Trends

In broad strokes, health and wellness-related beverage products are seeing increased consumer
penetration, while classic beverages—especially colas—are seeing consumer attrition. Specifically,
functional ready-to-drink (RTD) beverages, namely energy drinks, sports drinks, and tea, have
increased consumer penetration over the past few years.

While the energy drinks and shots market may be a small component of the non-alcoholic beverage
industry, it is perhaps the most dynamic market—growing 60% from 2008-2012 according to
Packaged Facts estimates in the all-new research report Energy Drinks and Shots: U.S. Market Trends.
In 2012, total U.S. sales for the energy drinks and shots market was worth more than $12.5 billion.

Intense competition surrounds the beverage industry as marketers seek to increase market
penetration and consumption frequency through positive alignment as a healthy and/or functional
beverage. Thirst quencher/sports drinks remain the most formidable competitor for energy drinks as
this type of beverage attracts a large constituency of energy drink users. Energy drinks are subject to
competition from other energy-boosting beverages such as coffee and tea beverages, as well as an
increasing number of new product innovations that tap into the energy trend but are outside of the
beverage industry.

At present, energy drinks have the lowest consumption rates of any RTD beverage—a point which
reflects the market’s relative infancy but also its growth potential. Experian Simmons analysis shows
the growth trend of this market, with the incidence of energy drink usage among adults rising from
nearly 13% in 2006 to 17% in 2012. In addition, there is a modest segment of heavy users: 5% of
adults consume energy drinks 5-7 times per month and less than 2% drink energy drinks 10 or more
times. Consumers 18-34, men, Hispanics, Pacific region residents, and adults with children in the
household are demographics that over index in energy drink usage.

Packaged Facts estimates that energy drinks account for some 78% market share, followed by 18%
for energy shots, and energy drink mixes (roughly 4%) in 2012. A few select marketers dominate the
energy drinks and shots market. This demonstrates the first mover advantage in each category. The
result is a market that is highly dependent on a handful of key brands, namely Red Bull, Monster
Energy, 5-Hour Energy, and Rockstar Energy.

Table of Contents:

Chapter 1: Executive Summary
Scope of Report
Energy drinks still have modest consumption rates
Table 1-1 RTD Non-Alcoholic Beverage Usage, 2006-2012(percent of U.S. adults)
Innovative beverages
Healthy beverages
Customizable and portable beverages
Relaxation beverages
Innovation opportunity
Encourage more frequent consumption
Target older consumers
Interactive packaging could remedy labeling concerns and more
Industry context
Energy drinks and shots deliver impressive growth
Table 1-2 Total U.S. Sales of Energy Drinks and Shots, 2008-2012 (in millions and percent change
from previous-year period)
Explosive growth from 2011-2012
Mass-Market Category Performance
Figure 1-1 Percent Growth in SymphonyIRI-Tracked Sales of Energy Drinks and Shots, 2012 (percent
change from previous-year period)
Product performance: Three core energy drink brands steer category growth
Product performance: Living Essentials dominates energy shots
Product performance: Kraft Foods’ enters category with well-known brands
Convenience stores capture largest share of energy market sales
Market Innovation
“Diet” energy drinks
Proliferation of “natural” energy
Cross-pollination of energy drinks

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