Even in the face of sustained scrutiny surrounding caffeine content and potentially adverse health effects, the energy drink business continues to grow impressively. But despite the category’s resiliency, the fact remains that much of the aggressive imagery surrounding energy drinks is in stark contrast to the better-for-you trends currently permeating the food and beverage industries. 2013 and 2014 saw the category’s growth soften to single digits after years of double digit growth.
Accordingly, those in the business of marketing energy have begun looking beyond the tactics that first captured the attention of the category’s targeted 18-34 year old male demographic, as key retailers have made it an imperative to keep up with changing consumers and bring women into the fold. Additionally, it should be noted, outside pressure from the United States Senate has applied pressure to companies to move their marketing away from children.
Now don’t expect Red Bull, Monster and Rockstar to go all soft on us and abandon the products and marketing that made them category leaders. These are iconic brands with enormous followings and a great deal of their success is attributed to their ability to tap into youth culture. But they have made plays outside of their base. Monster’s non carbonated ‘Rehab’ line mixes energy and green tea, while Java Monster provides a coffee offering. Third place Rockstar has dabbled in everything from a certified organic line to mixing energy with coffee, coconut water, almond milk and seemingly every possible flavor in between. Red Bull’s been arguably the more conservative of the three, but the impressive performance of its flavored ‘Editions’ line and ‘Total Zero’ offerings is indicative of consumers welcoming more choices. Both Red Bull’s ‘Total Zero and Monster’s Absolute Zero are their fastest growing offerings.
“The success of the Red Bull Orange and Cherry Editions can be attributed to reducing the taste barrier with expanded choice for some consumers and added an option for those looking for zero calorie, zero sugar energy drink options,” wrote Patrice Radden, Red Bull’s Director of Corporate Communications, in an email to BevNET. Radden wouldn’t comment on specific marketing initiatives from the company, citing competitive reasons, but noted that flavored reduced sugar options are accounting for 59 percent of overall category growth, according to Nielsen data. Those lower calorie options skew – you guessed it – toward older, and female consumers.
SK Energy, the energy shot brand launched by Pure Growth Partners’ co-founder and CEO Chris Clarke and rapper turned entrepreneur investor Curtis “50 Cent” Jackson learned to realign its demographic appeal the hard way. Upon its launch in 2011 as Street King, the brand’s identity was one tied closely to that of its celebrity co-owner and in line with the hypermasculinity often associated with the product, with blinged-out lettering on its packaging and 50 Cent featured prominently in its promotion.
But in 2012, having made few inroads, the brand began to shift away from its introductory look, changing its name to the more universally appealing SK Energy and ditching Fiddy’s face, despite the fact that Jackson was and still remains actively involved in the company behind the scenes. Over the course of several packaging revamps, SK Energy re-emerged as a brand embracing better-for-you ingredients and taking a gender-neutral stance in its marketing. Instead of aligning itself with extreme adventure sports, SK brought on a roster of more widely embraceable brand ambassadors, including NFL stars Colin Kaepernick and Wes Welker and female television personalities like Fox Sports’ Erin Andrews and Univision’s Claudia Molina.
“There’s a changing perception of what energy can be and there’s opportunity there,” says SK Energy President Sabrina Peterson. “We’ve been looking to grow the category by bringing in new users who previously may have been alienated by the market leaders.”
That noted, for energy shots, at least, the category has a history of looking outside the energy category’s age demographic. 5-Hour Energy, after all, advertises on NPR and in the American Association of Retired Persons’ magazine and does big business in golf clubhouses.
In contrast to the pivot shown by SK, San Francisco-based Hiball has been billing itself as the energy drink of the health conscious consumer since 2005. Company founder Todd Berardi asserts that while his brand may have been “ahead of its time” then, Hiball now finds itself in prime position to capitalize on current industry trends. Like SK, Hiball’s aiming to bring new users into the category, but Berardi’s also looking to grab ahold of another group: existing energy drink consumers aging out of the market leaders’ primary audience.
“There are a lot of people that are graduating from [mainstream energy drinks],” Berardi says. “They don’t want to be drinking stuff that’s laden with artificial ingredients but they still need energy and we offer the energy they’re looking for in something that’s all natural, organic, and fair-trade, with less sugar and less calories.”
According to SPINS data, Hiball is currently the fastest growing natural and organic energy drink brand in the United States, experiencing triple digit growth over the last several years. But Berardi’s also looking beyond the natural channel.
“Organic, all-natural, fair trade – these are things that weren’t even on the radar of a buyer from a 7-11 or Wallgreens five years ago,” he says. “But it’s certainly one of their top initiatives now. We’re constantly hearing from these bigger chains that they want healthier energy options.”
Like some of the aforementioned category leaders, Hiball is also taking the route of crossing energy with other trending beverage categories. In March the company launched a line of organic cold brew coffees in Whole Foods and recently unveiled an upcoming line of Hiball High Protein Energy Shakes.
In a similar blurring of the lines, Brooklyn-based Runa has packaged energy within another growing segment: bottled tea. Runa does offer its Amazonian guayusa-based beverage in a conventional 8.4 oz can, but the majority of the company’s sales come by way of its glass bottles.
“There’s a stigma surrounding energy drinks of being associated with unhealthy ingredients and aggressive brand images so a lot of people have dismissed the carbonated can altogether,” says Runa co-founder Tyler Gage. “A lot of our consumers are people who would never touch an energy drink but they grab the glass bottle, see it’s from a natural brewed leaf, and are able to wrap their heads around an energy drink in that format.”
Runa’s also done well with females, and it’s not just because the company has super hunk Channing Tatum on board as an investor and brand ambassador. Gage likens his brand’s female attraction to how women adopted coconut water as the sports drink of choice in yoga studios and spinning classes.
“One of the parallels that we see is how a lot of coconut water drinkers migrated from the Gatorades of the world to a product with a single ingredient that was all natural,” Gage adds. “So [with Runa], we’re able to tell a similar story because our brand is based on a single brewed leaf that’s all natural and has the same functional benefits of energy. The consumer mindset is there for that.”
Are zero-sugar, low-calorie alternatives enough for the category leaders to adapt to changing consumer tastes? Can a brand like Hiball or Runa end up in gas station convenience stores alongside Red Bull and Monster, an imperative as well because that shopper set itself is evolving from the stereotypical “Bubba” to more of a female contingent? Perhaps it’s too early to tell, but what is clear is that the early battles for brash appeal – the nomenclature that led to products like “Dicken’s Cider” or “Cocaine” and the conscious push to advertise behind increased caffeine levels has receded. What is also apparent is is that there’s room for brands to play outside the box in a category whose consumer set has been defined by its powerhouses. By all accounts analysts and retailers remain bullish on the category on the whole, and for good reason. There’s an energy drink for everyone now.