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MiO Energy

Kraft enters energy drinks sector

Kraft is entering the energy drinks market with the roll-out next month of a caffeinated version of its MiO “water enhancer”. The world’s second-biggest food company is to take on Red Bull and others with its MiO Energy, with caffeine equivalent of 12 to 18 cups of coffee contained in each bottle. Flavours will include ‘Black Cherry’ and ‘Thunder Punch’.

Irene Rosenfeld, Kraft’s chief executive, said: “We have certainly seen strong growth in the energy drink category. We’ve had a smashing success with MiO and I think this is the perfect platform for the category.”

Rosenfeld said MiO Energy would be targeted at “millennial” male consumers who tend to buy energy drinks at convenience stores. She said that original MiO, which is a coloured, calorie-free, flavoured liquid that is added to water, is poised to generate $100m in revenues for its first year on the market.

The new energy drink will come in varieties of 12 or 18 servings. Each half-teaspoon that is squirted into water will contain the same amount of caffeine as a cup of coffee.

Kraft estimates the total US energy drink market represents $6bn in annual sales. According to Euromonitor, US energy drink sales volume grew by about 17 per cent between 2005 and 2010. Analysts at Bernstein Research project sales to increase by low to mid single-digit figures during the next several years.

“There was a question among big beverage players about whether energy was going to be a fad or a lasting category,” said Stephen Powers of Bernstein. “It’s becoming more mainstream and popular.”

Health regulators are concerned about energy drinks drinks with high concentrations of caffeine, saying they can have adverse effects on children and that mixing them with alcohol poses health risks.

A study this year from the American Academy of Pediatrics warned of “potentially serious adverse effects in association with energy drink use”. Last year, the US Food and Drug Administration ordered companies that made alcoholic energy drinks to remove the caffeine from their products.

For its part, Kraft acknowledged the potential misuse of MiO but said it was marketed for people older than 18. “We always hope that consumers will use our products appropriately,” said Liza Laibe, senior brand manager for MiO, noting that an overdose of the product would not taste good. “We never encourage any kind of overuse.”

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