After a period of robust growth, sales in the sports and energy market lost momentum in 2014, with volume sales expected to fall by 1% in 2015. While energy drinks are doing well, this has been offset by the poor performance of the sports drinks segment. Value sales in the market are thus expected to remain relatively flat in 2015 at £1.5 billion.
The energy drinks segment makes up the vast majority of the market and has enjoyed estimated value growth of 47% over the 2010-15 period. This has been supported by new product launches and marketing, as well as the enduring popularity of the energy proposition. The regulation requiring additional caffeine labelling introduced in December 2014 and concern over the high caffeine content of energy drinks could however dampen demand. Meanwhile consumer concerns around the sugar content and artificial ingredients of sports drinks are likely to have played a role in the segment’s troubles.
In terms of usage, half of adults drink sports or energy drinks. Sports drinks are more popular than energy drinks, drunk by 45% and 35% of people respectively. In both markets, brands have a lead over own-label, reflected in the low market share of the latter.
Usage of both sports and energy drinks is higher among men than women, with women demonstrating greater concern about sugar and calorie content of these products. Those living in an urban location also stand out as the core users of both, and in particular of energy drinks. This suggests that their appeal is heightened by busy lifestyles.
The usage of both sports and energy drinks peaks among the 16-24s, falling with age. That younger age groups are more likely to exercise than older ones goes some way to explain the decline in the usage of sports drinks with age.
For the future, worries about the high sugar content of sports and energy are the biggest barrier to more frequent consumption, likely to partly stem from the recent media focus on the role of sugar in diets and the part of sugar-containing drinks within this.
The ‘enemy’ in the ongoing sugar debate appears to be refined white sugar, since most adults think that products which are high in natural sugars are still healthy. This is also reflected in the sports and energy drinks markets, with many reporting an interest in products made with no refined sugar or sweeteners.
The use of alternatives such as honey or unrefined sugar, or relying on sweetness from natural sugars for example in fruit juice-based drinks offer routes for manufacturers to quell concerns around refined sugar. These also allow brands to avoid sweeteners which continue to be divisive, suggesting NPD in this area should be well placed to appeal.
Sugar worries together with concern about artificial ingredients, translate into interest in reduced sugar sports drinks made with plant-derived sweeteners such as stevia, another means for manufacturers to reduce sugar whilst addressing concerns around artificial ingredients in sports drinks.