The Next Generation of Energy

This is not your teenage son’s energy drink. For anyone who still thinks that energy drinks still solely equate to skateboarder-style illustrated monster-sized cans of unidentifiably flavored and colored beverages loaded with sugar, it’s time to take a fresh look at this market and its great potential. And while some folks are experimenting with air shots and strips, the greatest long-term opportunities in energy likely still exist firmly in the beverage sector—but with a decidedly “natural” spirit (think whole-food ingredients, juices, tea, whole grains, etc.).

To begin with, Starbucks recently entered the retail energy drink market on a national level with its sparkling Refreshers line—and this is not an energy drink necessarily skewed toward the teen market. They combine juices with green coffee extract (made from unroasted coffee beans—an ingredient that is currently trending forward). The drinks—in raspberry-pomegranate, orange-melon and strawberry lemonade—also include ginseng. Two other flavors are solely in Starbucks stores: berry-hibiscus and lime.

Back in March of this year, Jamba Juice took control of its energy-based retail line from Nestlé USA (its previous formulation partner) and is expanding distribution of the drinks nationally. The “all natural” energy drinks differentiate themselves in the market by remaining very juice-centric. They contain 70% juice in three flavors, strawberry-banana, apple, and pomegranate-blueberry, and get their energy boost from caffeine. These products complement Jamba Juice’s other retail offerings, including smoothie kits and superfruit shots, as well as assorted food items. The company had previously only licensed out its retail offerings, but is now taking the reigns as it delves into more CPG development.

Although these canned beverages are available in retail outlets like convenience and grocery stores, they’re also for sale in the company’s foodservice chain locations. And analysts have pointed out that many fast-food consumers are also energy-drink consumers, suggesting that operators could capitalize on this market synergy by offering more energy drinks. When consumers of energy drinks were surveyed as to whether or not they would buy energy drinks in a quick-service restaurant environment, 81% responded positively.

Juice, as well as tea (tea sales are rising…), will continue to play a big role in the next generation of energy drinks. Green, unroasted coffee beans (with their chlorogenic acid content), a key ingredient in the Starbucks Refreshers line, are also worth looking into. Chlorogenic acid might have a positive impact on weight management, which would be beneficial in a line of energy drinks for women (not that men couldn’t benefit from weight-loss assistance, but it’s a harder sell…). And folks, including on Wall Street, are eating more chia (a hot ingredient all around…) for its energy benefits.

This leads to the need to expand the types of energy drinks available to target wide-ranging demographics. Aging consumers regularly cite a desire to have sufficient energy for the day’s activities. Through judicious ingredient selection—and sound marketing—you could quickly find a new audience for energy drinks there. With active men and women, sports nutrition would be a target (I’m waiting for the arrival of a whole-fruit banana-based sports energy shot after seeing the recent news on the benefits of that fruit…).

Energy drinks will continue to diversify over the long term—and specific groups of consumers are just waiting for a product that speaks to them to regularly get into their shopping carts.