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Source: Beverage Daily

Author: Adi Menayang

Photo: iStock/Mauro Matacchione

Sports and energy drink sales hit $25bn in 2016, according to the latest research by market data firm Packaged Facts. The firm forecasts that the category”will remain among the fastest growing sectors of the beverage market. “

The category, which Packaged Facts defined as beverages that are positioned and marketed for a functional benefit in mental or physical performance, is benefiting from afitness culture boom in US urban centers.

Its growth is also boosted by thedecline in soft drink consumption, a void in which sports and energy drinks are competing against RTD tea and coffee to fill, the report said.

“Many consumers perceive sports drinks as healthier than sodas and other carbonated beverages due to their association with sports and physical activity in general, “said David Sprinkle, research director, Packaged Facts.

“Although originally designed for athletes, these products soon garnered mainstream sales as anytime drinks, particularly among teen and young adult males. The novel flavor profile of energy and sports drinks also appealed to consumers seeking a change from sodas, “he added.

Going Natural: Tackling the Category’s Negative Image

Mainstream interest in sports and energy drinks helped propel it into a $25bn industry. It has grown rapidly—a 7.1% growth annual rate, to be exact, over the preceding five years, according to the report.

But because of its positioning to attract a broad audience, the category has come under scrutiny”for being marketed to and disproportionately consumed by the general population, particularly teenagers, instead of those who are physically active, “according to the report.

This leads to consumption of ’empty calories’ and added sugar by consumers whore are not doing enough physical activity to burn it off.

As a response, the industry has seen an increase of energy and sports drinks that eschew bold, artificial colors and flavors, opting instead for ingredients perceived natural like coconut water. One example is the brand Bai,acquired by Dr. Pepper last fall, which plays with ‘enhanced water’ positioning.

“Going a step further, many sports drinks are being promoted as simply water with electrolytes and other essentials, with clear bottles and equally clear liquid inside to give the product an appearance similar to that of bottled water, ” the report said.

Continued Growth, Reaching $32.7bn in 2021

Ready-to-drink products make up the vast majority of sales and have propelled the category with rising growth rates since 2013. Drink powders and mixes, on the other hand, have declined.

Packaged Facts forecasted retail sales of energy and sports drinks to reach $32.7bn in 2021, with an annual growth of 5.5%.

“The expanding range of food and beverage products positioned on benefits beyond basic nutrition interlocks with the consumer do-it-yourself trend of addressing health or wellness concerns, “according to the report.

“Energy and sports drinks are expected to continue a robust pattern of growth as consumers persist in seeking beverages with functional properties and novel alternatives to carbonated soft drinks.”

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* Source:http://www.beveragedaily.com/Retail-Shopper-Insights/Packaged-Facts-Continued-growth-for-sports-and-energy-drinks

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