BevNET visits energy shot co-packer, NVE Pharmaceuticals

In an illustration of the explosive growth of the energy shot market, workers at NVE Pharmaceuticals’ Andover, N.J. plant are currently assembling the co-packer’s fourth energy shot filling line.

NVE has notable experience with energy products, according to company president Bob Occhifinto. The pharmaceutical-turned-nutraceutical company fills and labels a wide array of energy drinks for smaller firms, and produced ephedra products before the Food and Drug Administration outlawed the substance in 2004. NVE’s executive vice president Walter Orcutt said the company entered the energy shot co-packing market when it installed its first shot-filling line a little over two years ago.

Since then, demand has grown across the category. Occhifinto said NVE’s catalogue of energy shot clients has grown from around 50 to more than 200, and most of his shot orders have grown too large for their original machine’s plodding pace. Occhifinto declined to release sales figures, but Living Essentials, makers of category-leader 5-Hour Energy, reported in October that it expects to clear $200 million in sales in 2008. NVE doesn’t bottle 5-Hour, but it does package some of Living Essentials’ biggest competitors. A tour of NVE’s twin, nondescript warehouse buildings reveals a stark difference between the production process for energy drinks and energy shots.

NVE’s energy drink filling line churns out 800 cans per minute, and is so highly automated that the process requires only eight people to operate, according to Orcutt. The energy shot line on the same floor, however, requires 12 workers to produce a maximum of 250 shots per minute. That difference, Occhifinto said, will likely prevent the price of the comparatively-small shots from sinking below $2 each.

Occhifinto said packaging is the problem. His company’s can line loads 24-count cases and assembles pallets without human aid. Each case basically looks the same – a cardboard tray, two dozen cans and a layer of plastic wrap to keep everything together – but consumers rarely look at energy drink cases. Store operators break the cases apart to load single cans into their coolers. Energy shots, however, frequently appear next to the register, in their boxes. That leads energy shot companies to want unique boxes that vary in shape and size, and preclude automated packaging. As a result, a large portion of NVE’s workforce – and therefore, the cost of producing the product – stands at the end of its shot-filling lines, cramming little bottles into little boxes.

Occhifinto didn’t say when workers can start packing shots at the end of his new line, but getting everything right for the shots can present unique challenges. Energy shot bottles, he said, were never meant for beverages, and calibrating a line can take months because the little containers tip easily. In the meantime, Occhifinto said he has plenty of demand to keep his existing three shot lines running constantly.