The energy drink category felt far more than a light buzz in 2022. The category saw nine-digit strategic investments, a high-profile bankruptcy, the loss of an industry pioneer and multiple startup brands with breakout moments.
The rapid succession of events was matched by consumer interest, as retail dollar sales of energy drinks grew 10.3% to over $17.55 billion dollars in the 52-weeks ending December 3, according to NielsenIQ.
In case you lost track of time, here is the year in energy.
Monster Inches Towards Alc Space and ZOA Sets the Stage
The year got off to an exciting start when Monster sent warning of its alcohol ambitions to the industry with its $330 million acquisition of CANarchy in January, and although a rumored merger with alcohol conglomerate Constellation Brands never came to be, the company would later make good on its “hard” interests in the fall.
Meanwhile, Dwayne “The Rock” Johnson and Molson Coors’ plant-based energy play ZOA was busy making headlines over the first four months of 2022, landing a $10 million line of credit with Gerber Finance in February when it was sold in over 40,000 stores nationwide and setting an ambitious expansion plan for the year, targeting 100,000 accounts by 2023. The company quickly followed that news with a string of new innovations to roll out throughout the Spring, including pre-workout line ZOA+ and smaller 12 oz. slim cans for its core line.
Also in April, Keurig Dr Pepper (KDP) backed performance energy player A SHOC closed a $29 million Series B round which sought to bring “new blood” into the brand with a roster of pro athlete investors including this year’s MLB record breaker Aaron Judge.
GHOST Partners with FaZe Clan
GHOST, a lifestyle energy and supplements brand supported by an exclusive Anheuser-Busch InBev (AB) distribution deal, has been among the fastest growing energy drink brands of the year. Since its launch in 2016 much of the brand’s marketing has long centered around digital campaigns built around gaming culture, and in May GHOST moved to cement its place within the esports world by signing a multi-year, cross-channel sponsorship agreement with FaZe Clan.
The deal also marked the end of a 10-year relationship between FaZe Clan and gamer-focused energy brand G Fuel, which had produced numerous co-branded products over the course of their sponsorship agreements. But G Fuel wasn’t left hanging – the company announced a long-term partnership with esports org Sentinels in April and made a leap to the IRL sports realm via a deal with Phoenix Suns small forward Mikal Bridges.
Bang’s Big Break-Up
Vital Pharmaceuticals (VPX) CEO Jack Owoc “brought the Bang” to the stage at in June BevNET Live Summer 2022 in New York for a stand-up interview in which he took shots at rivals like Monster and CELSIUS, lamented his company’s ill-fated distribution deal with PepsiCo, and urged entrepreneurs to employ “discipline, effort [and] sacrifice” to win in the beverage business and overtake the established leaders.
Owoc gave the talk in light of an April court ruling ordering Bang to pay $175 million in damages to family-owned beverage brand Orange Bang and Monster, as well as a 5% royalty on all future sales of Bang, in a trademark infringement lawsuit. On stage, Owoc dismissed the order as “the false ruling of a rogue arbitrator who has no background in science.” That ruling would soon be confirmed by an arbitration judge in July, leaving the company also responsible for an additional $10 million in court and attorneys fees.
Only a week later, Bang formally ended its exclusive partnership with PepsiCo after a year-and-a-half of tension, lawsuits and sales declines. Owoc told BevNET at the time that he was “appreciative” of the experience, and immediately set out to rebuild the brand’s DSD distribution network by seeking out past partners, including multiple AB houses.
Also in June, Super Coffee made a foray into the energy drink space with a test launch of its new Super ENRGY line in select stores in Texas.
Pepsi Picks Up CELSIUS
PepsiCo didn’t spend much time mourning its failed deal with Bang. On August 1, the conglomerate announced a $550 million investment and exclusive distribution agreement with performance energy brand CELSIUS. The deal sees the Florida-based brand moving nearly all of its retail and foodservice distribution over to blue trucks, with some carve outs for select partners such as Big Geyser in New York.
CELSIUS CEO John Fieldly said the deal would allow for “immediate scale” and will increase its distribution footprint by 40% by August 2023. PepsiCo also received an 8.5% ownership stake in the brand in the form of convertible preferred stock.
Monster Wins False Advertising Suit
Monster dealt an even bigger blow to Bang in September when a jury found Bang had violated the Lanham Act by wrongfully marketing its “super creatine” supplement as a functional ingredient. The court ordered Bang to pay another $293 million in damages. The brand later said it will remove the phrase “Super Creatine” from its cans.
PepsiCo also made another move into the category, this time via the Gatorade brand with the announcement of Fast Twitch, a new hydrating energy drink launching in partnership with the NFL. Players have exclusive access to the drink during the 2022-23 season with a bigger mainstream launch expected to come in the new year.
Bankruptcy, The Beast and a Pioneer’s Passing
The mounting legal fees and costs of the PepsiCo separation led Bang to file for Chapter 11 bankruptcy protection in October. While the brand had built its DSD network out to 269 partners nationwide, distribution disruptions led to declining sales. The company received $100 million in loans to support the business during the restructuring process and Owoc projected confidence in the announcement, stating “I know we will successfully emerge from this process as a stronger company.”
Meanwhile, Monster made good on its alcohol ambitions with the launch of The Beast Unleashed, a new malt beverage line with 6% ABV set to roll out in January.
Also in October, KDP took its energy prospects international by partnering with Red Bull for a strategic partnership in Mexico. While that news represented a big opportunity for Red Bull, the brand – and the beverage industry – would be struck later in the month by the announcement that co-founder Dietrich Mateschitz had died at the age of 78. The Austrian entrepreneur is widely credited with mainstreaming the modern energy drink category in western countries and helped establish a brand association with extreme sports.
KDP Partners with C4
KDP secured its foothold in the energy drink market in December through an $863 million investment and distribution agreement with C4-producer Nutrabolt, taking a 30% stake in the company. C4’s ready-to-drink energy line, introduced in 2018, has experienced rapid growth over the past year as retail dollar sales rose 140.4% to $299.2 million in the 52-weeks ending November 19, per NielsenIQ.
While the move locks up one of the last major beverage strategics without a stake in a major energy brand, it creates a new opening for DSD distributors who once again have a void to fill. That could mean even more opportunity in 2023 for independent brands like Alani Nu – which is already one of the fastest growing performance energy products with national distribution and has helped drive more female consumers into the category – or offer an opening for smaller players and recent launches such as RYSE Fuel, Rowdy Energy and Juvee.