Fresh coca leaves were replaced by “spent” ones in 1904 because of concerns over the use of cocaine in food products, and the federal lawsuit United States v. Forty Barrels and Twenty Kegs of Coca-Cola forced the company to cut back the amount of caffeine in the formula by 1916, thus bringing an end to the first wave of energy drinks. An energy drink is a type of beverage containing dominant drugs, chiefly caffeine, which is marketed as providing mental or physical stimulation.
They may or may not be carbonated, and generally contain large amounts of caffeine and other stimulants, and many also contain sugar or other sweeteners, herbal extracts and amino acids. They are a subset of the larger group of energy products, which includes bars and gels. There are many brands and varieties of energy drinks. Energy drinks have the effects caffeine and sugar provide, but there is little or no evidence that the wide variety of other ingredients have any effect.
However, a variety of physiological and psychological effects have been attributed to energy drinks and their ingredients. Two studies reported significant improvements in mental and cognitive performances as well as increased subjective alertness. Excess consumption of energy drinks may induce mild to moderate euphoria primarily caused by stimulant properties of caffeine and may also induce agitation, anxiety, irritability and insomnia. During repeated cycling tests in young healthy adults an energy drink significantly increased upper body muscle endurance.
It has en suggested that reversal of caffeine withdrawal is a major component of the effects of caffeine on mood and performance. Sports and energy drinks are heavily marketed to children and adolescents, but in most cases kids do not need them – and some of these products contain substances that could be harmful to children. “Energy and sports” is one of the fastest growing and most innovative segments of the drinks market. Daring innovations on the formulation side are matched by bold new packaging concepts and marketing approaches. Energy drinks are typically attractive to young people.
Approximately 66% percent of its drinkers are between the ages of 13 and 35 years old, with males being approximately 65% of the market. A 2008 statewide Patient Poll conducted by the Pennsylvania Medical Society’s Institute for Good Medicine found that: 20% of respondents ages 21-30 had used energy drinks in high school or college to stay awake longer to study or write a paper; 70% of respondents knew someone who had used an energy drink to stay awake longer to study or work. Energy drinks are also popular as drink mixers. Since 2002, there has been a growing trend for packaging energy drink in bigger cans.
Since in many countries, including the US and Canada, there is a limitation on the maximum caffeine per serving in energy drinks, this allows manufacturers to include a greater amount of caffeine by including multiple servings per container. Popular brands such as Red Bull, Hype Energy Drinks and Monster have increased the amount of ounces per can. (For example, when Red Bull first came on the U. S. Market, it was primarily in sells a can as big as 32 oz. (946 ml). ) Most energy drinks in the United States, with a few exceptions, primarily sell their drinks in 16 oz. 73 ml) cans, a trend provoked in part by companies such as Rockiest Energy promoting the 16-ounce cans over Red Bull’s smaller ones in the mid-sass. Conversely, the emergence of energy shots has gone the opposite way with much smaller packaging. Variants Energy shots are a specialized kind of energy drink. Whereas most energy drinks are sold in cans or bottles, energy shots are usually sold in smaller ml bottles. Energy shots can contain the same total amount of caffeine, vitamins or other functional ingredients as their larger versions, and may be considered concentrated forms of energy drinks.
The marketing of energy shots generally focuses on their convenience and availability as a low-calorie “instant” energy drink that can be taken in one swallow (or “shot”), as opposed to energy drinks that encourage users to drink an entire can, which may contain 250 calories or more. Rank 2012 2012 sales ($millions) 2011 2011 sales ($millions) 5 Hour Energy 896 2 6 Hour Power 30 Red Bull Shot 25 Word 14 4 Monster Whitman 10 Stacker 2 Intro 2 GO 3. 4 Redline Power Rush 3. 5 7 Redline 3. 2 Spike Double Shot 8 Vital 41. 1 3. Energy shots continue to resonate with an older demographic because they are received as safer than energy drinks, and are lower in calories, sugar and caffeine. They also don’t come with the crash usually associated with energy drinks. Consumers who don’t want energy drinks, but are looking for the functional benefit of an energy boost are gravitating to the shots. Energy drinks such as Red Bull are often used as mixers with alcoholic beverages, producing mixed drinks such as Vodka Red Bull which are similar to but stronger than rum and coke with respect to the amount of caffeine that they contain.
They are also sold in a wide variety of formulations such s Four Look and loose which combine caffeine and alcohol. Four Look, a product of Passion Projects, was originally promoted through young employees who were hired to introduce the product to their peer group. Red Bull continues to dominate as the energy drink leader, but Monster has experienced huge growth in the last few years. The energy drink market continues to grow even in light of the tough economy and increased health scrutiny. Soda sales have been declining steadily over the same period, while energy drink sales have been booming.
Rank Red Bull 2,950 Monster 2,600 1 ,900 80 Rockiest Amp 300 330 NOSE 250 Doubles 6 Full Throttle 140 220 Science Synergy 130 vex Redline North America, and particularly the US, leads the world in energy drink consumption due to the convergence of consumers seeking both functional and lifestyle beverages. Western Rupee’s number two position in value terms reflects the popularity of the beverage as a premium product, particularly in the on-trade, where the drink is still commonly combined with alcohol. This on-trade presence also aids in the lifestyle and premium positioning of the beverages.
Asia Pacific, birthplace of energy drinks, is growing, but still trails North America and Western Europe in terms of value. In many of these markets, energy drinks are a working class tonic, viewed more for function than lifestyle. Latin America holds the most promise, as consumers are embracing lifestyle beverages, but the novelty of energy drinks is not as effective since functional beverages are widely known in markets like Brazil. The global energy drink market is likely to benefit from moving into untapped markets and marketing toward an older population.
Following consumer trends will prove equally important, tit leading companies including natural and organic ingredients in their products. Parents concerned about the rising rate of child obesity are also likely to respond to lower sugar and caffeine content product offerings. With rising consumer interest in health and natural foods, there’s a rush by all beverages companies to capture a new segment -? the energy drinks category. According to Beverage Marketing Corporation, the energy drink market grew by more than 102 percent worldwide over the past year and continues to grow tremendously.
Though there are over 2,500 brands available worldwide, it’s Just the start for India. No official figures are available on the size of the energy drinks market, but industry sources peg it around RSI 5-8 core. Says Japed Kapok, chairman and managing director,”let’s Just a fad. The market’s minuscule. As of now, there’s a niche in the market and no market for the niche. ” According to FMC analysts, the concept of energy drinks is new to the Indian consumer. And it will take a long time to develop the market. A major obstacle is said to be the pricing.
These drinks contain ‘vitiating’ ingredients like terrine, ginseng, Guarani and L-carnation, which are very expensive. This gives them a premium over other soft drinks and beverages in the market. As the category has shown strong growth internationally, the functional soft drinks market has attracted many of the world’s leading multinational soft drinks firms to India. Pepsi has plans of launching one of their international brands Adrenaline Rush or AMP here by the end of next year. But Coca-Cola India has the first mover’s advantage with its Shock.
Says Shrimps Nadir, vice-president, marketing, Coca- Cola India, “The company’s vision is to lead the beverage revolution. Shock volumes eave been as per our expectations. It’s now clearly the leader in its segment. “let may be easy for Coke as its pricing is more acceptable to the Indian consumer. Shock is priced at RSI 40 and is available across 150 outlets. But for other brands it may be a tough road ahead. “In 2001, Red Bull sold 1. 6 billion cans. This was an 80 per cent increase over 2000 and there’s still a huge untapped potential,” says Norte Kramer, global director, marketing and sales, Red bull.
Red Bull can’t really boast of such figures for the Indian market. It is available for RSI 200 upwards at high-end CICS and pubs. Mesh Gouda, director, Gnarl’s Hospitality Services, says popular places like Velocity and Fire and Ice in Iambi order 30-40 cases every week. Though many brands have ambitious plans of spreading to local retailers, Neared Podia, deputy general manager, purchasing and operations, Foothold feels, “In the long run, these drinks may not survive because of their pricing. Red Bull used to sell around 75 to 100 cans in a month as compared to two cases of Shock! K every day. While reluctant to reveal actual figures, Rave Augural, director, Tradition Exam, the company hat distributes Dark Dog here in India, says, “Our brand’s Just been introduced in the market and we still have to spread our wings and introduce our product in many more cities. The market is not matured and it’s difficult to provide statistical data to show how much we’re selling. ” In a market where soft drink giants find it to survive, despite all their glam advertising, brands like Red Bull and Dark Dog may find it tough to break through. “Dark Dog usually refrains from above-the-line advertising.
The most effective marketing tool Dark Dog has is word-of-mouth advertising. The on- meeting new in a relaxed and fun atmosphere,” says Tanta Cocker, marketing manager, Dark Dog. Red Bull, on the other hand, occasionally organizes theme parties at popular hangouts in the cities it’s available in. “Though the vision of one billion Indians rushing to buy Red Bull is most exciting, we have realistic expectations. The quality and right mix of sampling, promotion and targeted distribution to build a loyal base of consumers in India is the key, and will be our focus when we launch Red Bull,” says Chit Harriet, managing director, Red Bull, Asia.
Worldwide, each passing ear brings greater demands on body and mind. However, one does wonder if all these newfangled energy drinks are worth the money! Start-up Hector Beverages is out to prove its energy drink Taking has enough zing to take on giants. Start-up Hector Beverages is out to prove that its energy drink Taking has enough zing to take on giants Start-up Hector Beverages is out to prove its energy drink Taking has enough zing to take on giants. “Here’s what the outsider would see: a new entrant, in an unproven space, out to take on giants with the deepest of pockets (any guesses on hat Coke pays Mari Khan, or Pepsi gives to MS?
Or how much does Red Bull’s Formula 1 team cost? ) And the company goes on and calls itself Hector, who lost to Achilles. But that, people, is the trip: the audacity of the underdog. We decided to take the big guys on. We decided to not be cowed down by the big bullies who make their fortune selling sweetened, fizzy water. And we know that Achilles does not have the most powerful heels. “BE asked the founders of energy drink Taking about this rather unusual approach to the company website and the brains behind it.
They tell us it’s to the doing of a radical creative boutique or hot shop, it came from within. To the point where the entrepreneurs actually wrote the copy themselves, and were happy enough with this bristling with bravado manifesto to actually put it on the website. And that’s not the only example of conventional wisdom that Taking has attached dynamite to. Hector Beverages was set up about two years ago by four individuals who have experienced everything from working for multinational corporations to dipping their feet in entrepreneurial ventures.
They are setting themselves up against both the Goliath, and the other Davis, who exist in the RSI 350-500 core Indian energy drinks market. The ruling matador in this arena is Austrian brand Red Bull that has been the drink of choice in many a Jeroboam and during brutally long study sessions. Then there are others in the market, from pedigree players like Coca- Cola’s Burn, local brands like Golden Healthcare Cloud 9 and KS an unlikely extension from a condom brand, besides a horde of sporadic imports from Monster to Pepsin’s Sobs. So we go back to the start -? is another energy drink brand a good idea or a foolish one?
According to co-founder Nearer Karma, in their shared beverage experience (a significant chunk of the founders’ previous careers have been with Coca-Cola) they could spot that the Indian market is disproportionately dominated by carbonated soft drinks. This was in comparison not Just to the developed economies but even countries like China, Brazil, Philippines, and Poland to say nothing of Thailand, the country of Red Bull’s origin. He says, “With that data point, we engaged with multiple consumers across Delhi and Bangor and realized significant player. ” Fair enough.
However, the fact is it’s a small waterhole where any are paddling hard to create ripples. So how does the small guy take on the big one? The men behind Taking are trying a series of tactics that includes its very competitive price, RSI 25 for a mall pack; a price tag that is a full RSI 50 less than the general asking price for even the cheaper brands in the category. A 250 ml can of market leader Red Bull on the other hand, costs RSI 95. It’s the result of what Taking considers genuine product and packaging innovation: a daypack instead of the usual metal can or glass.
Says co-founder James Neutral, “The important point here is that his is not unsustainable. For most consumer goods, packaging is the biggest cost and has a great impact on the retail price. We have been able to disrupt this aspect with our packaging. ” However it does pose a fairly unusual problem for the brand, with potential consumers wondering how an energy drink can be priced so low. Neutral admits, “This is related to the self-image aspect and does constitute a paradoxical marketing challenge -? that of marketing a better product at lower price! ” Blame it also on the lack of a well defined counter culture movement in the country.
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