Energy Drinks

BMI Food Bites: Energy Drinks in SA 2012

Energy drinks as a category has been operating in the South African market for approximately 15 years. During this time the category has seen tremendous growth and diversification of product, brand and target market. Some insights from BMI Research…

Energy drinks are defined by BMI as containing a high level of caffeine and give a short-term adrenaline rush. They constitute performance-enhancing products.

  • Merchandise available includes: Energy shots, slim cans (smaller volume) for the female market, brand imaginings targeting the gaming community, popular TV caricatures emphasise cultural identities or simply strong and vicious characters resembling a drink that will give you what you need. These examples illustrate the extent, to which manufacturers will go to gain market share.
  • The recently added energy gel is a additional example of innovative product variations and there are no guarantee that it will grow that much, if rather only complement the current category offering.
  • The market is quite open and therefore the import trade is fairly strong. Some distributors push a certain brand into specific areas for a dedicated time and then changes that brand with a different one. Some brands still push for unique brand offering. Smaller, count line fridges for the spontaneous purchase decision are also finding their way into the retail space.
  • From a packaging perspective, the recently added 750ml can or even the 980ml can pushes the boundary of commoditisation, as it becomes a volume drive and not necessarily a brand entrenching exercise. These market activities could potentially harm the category and are common indicators of a market reaching maturity. However, this does not mean that the amazing growth rates seen across the decade will fade away completely, but rather stabilised and less unpredictable brand fluctuations will begin to show.
  • From the various manufacturers interviewed, very few were willing or able to give estimates to 2016 as they were just not sure.
  • With the global economy struggling to build confidence in markets and shake the effects of the recession, global trends on niche category beverage growth potential will remain conservative, However, this is absolutely not the final word on the expected growth in years to come. Arguments for and against the proposed growth forecast are ample. Suffice to say, a conservative rather than bullish approach would be a better stance in the slow post-recession recovery environment.

RTD Energy Drinks Channel Distribution – 2011 – click graphs to enlarge

Energy Drinks - Channel Distribution

RTD Energy Drinks Regional Distribution – 2011

Energy Drinks - Regional Distribution

RTD Energy Drinks Packaging Demand – 2011

Energy Drinks - Packaging Demand

BMI, www.bmi.co.za