For many, sports drinks and energy drinks are somewhat synonymous. The truth is that the two couldn’t be more different. Sports drinks are beverages developed specifically to be used while exercising or to enhance the performance of an athlete or sportsperson. Energy drinks, on the other hand, is a rather amorphous category that combines lifestyle beverages and functional beverages. While they do provide flavor and refreshment like any other soft drink, they also contain a host of functional ingredients (such as caffeine) that provide a form of energy and wakefulness to the consumer. The market for energy drinks has gained much momentum in recent years owing to the benefits they offer, and according to recent report published by Transparency Market Research the global energy drinks market
is projected to register a growth of more than 10% by the end of 2016.
The global energy drinks market comprises four main regions: North America, Europe, Asia Pacific, and Rest of the World. Let’s take a look at the two dominant regional energy drinks markets and their performance over the years.
North America leads the pack with 35% of the market share
North America has been dominating the global energy drinks market and consists of two primary regions: Canada and the U.S.
Manufacturers of energy drinks in the U.S. are projected to witness significant growth in the coming years, with sales surging in terms of off-trade value and volume. Of the major players in the energy drinks market, The Gatorade Co Ltd holds a commanding lead in sales of energy drinks in the U.S. Gatorade, being the first product of its kind, has managed to maintain its lead even with the introduction of numerous new and innovative products in the market. The company will continue to enjoy a strong hold in terms of consumer loyalty, appeal, and preference in the years to come. A challenge that the U.S. market for energy drinks faces is concerns associated with the safety and health of energy drinks. Health professionals and media have been linking the consumption of energy drinks and deaths in 2013, and the purpose and necessity of these drinks is being questioned across the industry. Moreover, with new beverage categories being introduced in the market and energy drinks being on the verge of product saturation, the energy drinks market in the U.S. is expected to witness a slump by the end of the forecast period.
Asia Pacific a close second with 30% of the energy drinks market share
The Asia Pacific energy drinks market, though an emerging regional segment, has been experiencing a surge in popularity in countries such as China and India. Industry experts and analysts claim that this regional market represents massive potential in terms of attracting more players as well as consumers.
The China market for energy drinks is largely characterized by the launch of new kinds of products. Players such as Hangzhou Wahaha Group and Fujian Dali Food Co Ltd have been grabbing the attention of consumers and spurred the growth of the energy drinks industry in China. Red Bull Vitamin Drink Co Ltd has been dominating the regional market, accounting for nearly 40% of the share in 2013. With the help of strong promotional, advertizing, and marketing campaigns, the company has managed to capture the interest of consumers to a great extent. The energy drinks market in China is set to get more competitive by 2018 with products such as Pocari Sweat, Red Bull, Jianlibao, and Gatorade cultivating their brands in the industry.
The rise of the urban class in India has been the most attractive factor enticing the energy drinks market. Consumers looking for instant energy solutions have enabled new manufacturers such as Monster Energy Drink, JK Ansell Ltd, and K.G. Functional Beverages Ltd to tap into the Indian market. The popularity of sports events in the country is an opportunity for companies to promote their brand and create appeals and awareness among potential customers. Red Bull GmbH led the energy drinks market in India in 2013 and is estimated to continue to enjoy its first mover advantage.