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Energy Drinks Market Overview
Energy Drinks Market Size is estimated to reach $86.5 billion
by 2027 and it is poised to grow at a CAGR of 9.5% over the forecast
period of 2022-2027. Energy drinks are a type of non-alcoholic beverage which
contains compounds such as caffeine and sucralose to provide mental and physical
stimulation. A healthy non-alcoholic beverage is often denoted as an energy drink
without sucralose or the upcoming plant-based energy ingredient-based drink.
Due to the growing fitness regimens in various societies across different age
groups have curated a strong demand for such drinks in the market. Major brands such as Red
Bull and Monster Energy have curated drinks based on rudimentary styles, which continue
to hold a sizable market share across regions. A spree of product launches
critiquing environmental and societal backgrounds has allowed brands to grow
reputation and sales and would continue to propel the Energy Drinks Industry in
the forecast period of 2022-2027.
Energy Drinks Market Report Coverage
The report: “Energy Drinks Market Forecast (2022-2027)" by IndustryARC, covers an in-depth analysis of the following segments in the Energy
Drinks Market.
by Types – Caffeinated Beverages and De-caffeinated Beverages.
by Format - Shots, Powder and RTD.
by Flavours - Unflavoured and Flavoured.
by Categories - Natural Energy Drink, Sports Drink,
Non-alcoholic Beverages, Functional Beverages and Non-carbonated Drinks.
by Nature - Organic and Conventional.
by Distribution Channel - B2B and B2C.
by Geography: North America (the U.S., Canada and Mexico),
Europe (Germany, the UK, France, Italy, Spain, Russia and the Rest of Europe), Asia Pacific (China, Japan India, South Korea, Australia & New Zealand and the Rest of Asia Pacific), South America (Brazil, Argentina,
Chile, Colombia and the Rest of South America) and the Rest of the World (the Middle
East and Africa).
Key Takeaways
- Geographically, North America held an advanced share in 2021. It is owing to product strategy alignment by brands and manufacturers to elongate product offerings to satiate the health-conscious consumers. However, Asia-Pacific is expected to offer lucrative opportunities in the forecast period owing to the realignment of strategies and rising disposable income.
- Rising demand for natural energy drinks with caffeine sourced from sustainable sources along with a shift to healthy non-alcoholic beverages has been a key market driver. However, health concerns related to the consumption of energy drinks hinder the market growth.
- A detailed analysis of the strengths, weaknesses, opportunities and threats would be provided in the Energy Drinks Market Report.
Energy Drinks Market - Market Share (%) by region, 2021
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Energy Drinks Market Segment Analysis - by Type
Energy Drinks Market based on type can be further segmented
into Caffeinated and Decaffeinated beverages. Caffeinated Beverages held a dominant
market share in 2021. Caffeine is by far the most primitive and commonly used
product in energy drinks owing to its stimulant nature to increase alertness
and energy. Furthermore, label claims allow the category to hold a strong share.
For example, leading brands promote energy drinks as functional drinks to
boost energy and reduce daily stress, whilst improving concentrations to improve
work efficiency. Owing to the following claims brand such as Red Bull and
Monster continue to experience strong preference amongst the consumers. However, the de-caffeinated segment is estimated to be the fastest-growing, with a CAGR of
10.5% over the forecast period of 2022-2027. It is due to the various findings
claiming the ill effects of caffeine on health. Caffeine causes restlessness,
nausea and anxiety, amongst other potential side effects. As per NIMH, nearly
19.1% of U.S. adults have had an anxiety disorder in a year.
Energy Drinks Market Segment Analysis - by Distribution Channel
Energy Drinks Market based on distribution channels can be
further segmented into B2B and B2C Channels. B2C held a dominant market share
in 2021 and is estimated to be the fastest-growing segment with a CAGR of 10.9% over the
forecast period of 2022-2027. It is due to the immense reach of energy drinks
through various intermediaries of off-trade channels. Intermediaries such as
Walmart or TARGET amongst many other small-and-convenience stores provide
consumers the needed luxury to buy products at ease. Furthermore, the online-channel
growth would continue to proliferate the B2C channel. As per the 2021 Social
Media Users Guide, the energy drinks market would grow from a child-centric
market to various other markets. 8% of people over 65 use Instagram, 35% of the
same age group use Facebook and 58% use YouTube. Targeting consumers via these channels would proliferate the demand for B2C.
Energy Drinks Market Segment Analysis - by Geography
Energy Drinks Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America and the Rest of the World. North America dominated the market with a 31% share in 2021. It is owing to the rising consumption of caffeine-induced products such as coffee and energy drinks which have proliferated the market share. Energy drinks are an integral part of social gatherings, parties and celebrations in the United States. Manufacturers such as Red Bull and Monster Beverages are offering their energy drinks in multiple flavors and two major packagings. However, Asia-Pacific is expected to offer lucrative growth opportunities over the forecast period of 2022-2027. It is because of a substantial young population in the region, with sub-standard purchasing capacity. As per ILO.Org, India has the largest youth population, with nearly 66% of the population younger than 35 years.
Energy Drinks Market Drivers
A Rising Focus on health and Fitness:
Consumer awareness pertinent to liquid calorie intake has risen. This has led to the rising demand for products that can offer advantages over traditional carbonated drinks. Furthermore, the understanding of ingredients has improved among people, which has raised the demand for plant-based energy ingredients which offer the right blend of taste and health, along with the emergence of nootropic energy drinks. As per Food Dive 2022 Survey, nearly 55% of global consumers are more likely to purchase food and beverage products if they had sustainability claims. The market of Energy Drinks is driven by an extremely large consumer base, with fitness enthusiasts demanding products with controlled ingredients.
Growing Investments from Renowned Brands and Manufacturers to Reach Nuanced Demand and Markets:
Renowned brands such as Monster, Red Bull and others are trying to find sustenance in a
highly competitive and fragmented market by investing in ingredients and following
market strategies to grow along the value chain. For example, Bioenergy Life
Sciences has introduced Ribose - a healthy sugar substitute, with bioenergy ribose being about 60% as sweet as table sugar. Furthermore, advances in caffeine development aid
the market directly. Future-Chemicals offered caffeine sourced
from whole-coffee cherry and deliver 70% natural caffeine and 5% antioxidant
polyphenols. Lastly, urbanization trends with growing disposable incomes across
the developing regions would support the market demand. As per the UN, 68% of the
world population would live in urban areas by 2050 as compared to 55% in 2018.
Energy Drinks Market Challenges
Health Concerns Pertinent to the Consumption of Energy Drinks:
As per the Food and Health Survey from the International
Food Informational Council, 73% of the survey respondents are actively trying
to limit or avoid sugars. Due to sugar and caffeine being the key ingredient
in energy drinks, marketers face reasonable friction in creating demand. A higher
caffeine level would make the drinks more bitter, which would not help in solving
the problem of sugar reduction. The market has been seeing a rise in
healthy non-alcoholic beverages and energy drinks without sucralose sales. However, a
critical demand coefficient is fulfilled by utilizing beet or cane sugar as an ingredient,
which impedes the market growth in the medium and long term.
Energy Drinks Industry Outlook
Product launches, mergers and acquisitions, joint ventures and
geographical expansions are key strategies adopted by players in the Energy Drinks Industry. The top
10 companies in the Energy
Drinks market are -
- Monster Beverage Corp
- Gatorade Company
- Nestle S.A.
- PepsiCo Inc.
- Coca-Cola
- Red Bull GmbH
- Carlsberg A/S
- Kraft Foods
- Suntory Holdings
- Shenzhen Eastroc Beverage Ltd
Recent Developments
- In September 2022, Gatorade entered the energy drink category with its first caffeinated beverage - Fast Twitch. A 12-ounce bottle would contain 200mg of caffeine, electrolytes and B-Vitamins. The beverage was developed with NFL and Sport-performance Experts.
- In February 2022, PepsiCo launched a hemp-based energy drink in the U.S., containing ingredients such as hemp oil, vitamin B, spearmint, lemon balm and caffeine.
- In January 2022, Starbucks launched energy drinks in partnership with PepsiCo. The following product would be made available in various grocery stores, national retailers and convenience stores across the United States from March 2022.
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