A Shot in the Arm

Negative press may have dampened consumers’ desire for energy boosters, but tired consumers are still interested in energy-boosting products, whether they’re energy shots or supplements.

Sales of energy shots were flat for the 52-week period ending March 22, 2015, according to Chicago-based IRI, with sales in the supermarket channel at $93 million, a 0.5 percent dip from 2013 sales. Sales dropped nearly 10 percent for the same period in the drug channel for the same period, and 3 percent for multioutlets.

Despite news reports of emergency room visits and deaths related to consumption of energy drinks, manufacturers say that when consumers use the products responsibly and as indicated, energy shots and supplements can be a useful way to boost energy.

Convenience stores continue to have the greatest share of the business, but supermarket retailers have been able to gain some share on the strength of multipacks and value-price promotions.

Shifting Channels

“There has been a strong shift from the convenience channel to the conventional channel as consumers increasingly view energy drink products as part of their daily routine,” says Emily Neuman, a spokeswoman for The Hain Celestial Group, in New Hyde Park, N.Y., whose Celestial Seasonings portfolio includes Kombucha Energy Shots, Energi Green Tea Energy Shots and Pomegranate Xtreme Kombucha Energy Shots. “We’ve also seen an increase in consumption in the home. The result is shoppers ‘stocking up’ on these types of beverages on their routine shopping trips so they can always have product on hand.”

Pleasanton, Calif.-based Safeway, for example, merchandises single shots near the checkout but promotes multipacks in its vitamin section. The grocer doesn’t offer much selection in the segment, relying exclusively on Living Essentials’ 5-hour Energy brand for a variety of multipacks priced promotionally.

According to data from IRI, Farmington Hills, Mich.-based Living Essentials’ 5-hour Energy dominates the food channel with a nearly 89 percent dollar share, while private label brands account for about 5 percent of dollar share in the channel. 5-hour Energy is also the most promoted energy shot brand in the channel, with more than two-thirds of ad activity in the segment, according to data from Solon, Ohio-based ECRM. Tokyo-based Taisho Pharmaceutical’s Lipovitan generated 8 percent of segment ad activity, according to ECRM data; Taisho’s website includes a $1-of coupon for in-store use when consumers purchase a 6-pack of shots.

Private label brands show a very slight uptick in sales, while 5-hour Energy sales are flat or slightly down. “As one of the country’s largest private label manufacturers, we are consistently approached by customers wanting to enter the beverage market with an energy shot or drink containing a propriety blend or one of our in-house blends with their own twist,” says Karen Finocchio, EVP at Andover, N.J.-based NVE Pharmaceuticals. “Growth in consumer use and the ease [with] which an energy shot can be displayed [are] propelling this category beyond early expectations.”

Accordingly, NVE has seen growth of its Stacker2 brand. “We are always exploring new avenues for our … branded products as well as for our private label customers,” notes Finocchio.

Sebastopol, Calif-based Guayaki Brand’s Yerba Mate energy shots, made from the naturally caffeinated leaves of a South American rainforest tree, have also shown growth, but of a smaller base.

This indicates that shot and supplement consumers may be ready for brands positioned as more natural alternatives. Chris Schmidt, of London-based market research firm Euromonitor, notes in a blog post that companies are increasingly using ingredients such as green tea extract, green coffee bean extract, guarana and yerba mate in an effort to position their energy-boosting products as “natural” sources of energy.

“We know there’s strong consumer demand for natural energy alternatives, so we’ve added Energi shots to our natural shot line for consumers who want to enjoy the benefits of energy shot products while still making choices they feel good about,” says Blake Waltrip, VP and chief marketing officer at Boulder, Colo.-based Celestial Seasonings, a Hain Celestial brand, which launched the Energi shot in 2012.

Supplemental Energy

In the vitamin, dietary supplement and sports nutrition categories, Euromonitor’s Schmidt notes that manufacturers offer a wide range of products featuring non-caffeine-based energy-boosting properties, with vitamin B a particularly popular ingredient.

Ginseng is also widely used as an energy-boosting ingredient. Schmidt notes that a number of large multinational pharmaceutical manufacturers have invested in herbal/traditional medicine. This past summer, one of them, Germany-based Bayer AG, launched Berocca, an energy support supplement in an effervescent tablet that fizzes when dropped into water, in the United States. The product has been available in other countries for 20 years and is used globally to combat hangovers. In the States, Bayer is positioning Berocca as a performance multivitamin that helps improve mental performance and physical stamina, somewhere between an energy shot and a supplement. Containing a combination of B group vitamins and vitamin C, the product is enhanced with added calcium, magnesium and zinc. Bayer is putting plenty of advertising muscle behind the product and offering $1-off coupons available at point of purchase. Safeway merchandises Berocca in two locations: next to energy supplements and near energy shots.

The Nature’s Way Alive line now includes both Women’s Energy and Men’s Energy products. The Green Bay, Wis.-based brand also offers Alive multivitamins as well as single B vitamin products designed to boost energy. Manufacturers such as Brevard, N.C.-based Gaia Herbs and Amazing Grass, in Newport Beach, Calif., have introduced plant-based products that can be added to a shake for an energy boost.

Promoting the category and merchandising products in multiple locations can boost sales. According to NVE’s Finocchio, there are a number of opportunities throughout stores to display energy and functional shots. “The compact size of 2- and 4-ounce energy shots promoting seasonal packaging and flavors makes the clip strip an easy way to display shots anywhere, in any aisle,” she says. “Stores can add a clip strip to the snack, drink or even the baby products aisle so the products are available for anyone or everyone who needs energy.”

New products are also important to category growth. For the second year, 5-hour Energy is offering limited-edition cherry-flavored shots from May through July, and the company will donate 5 cents from the sale of every specially marked red-white-and-blue bottle to the Special Operations Warrior Foundation, a nonprofit organization that supports the military’s special operations forces and their families through college scholarships, family services and financial stipends.

New York-based SK Energy Shots have recently been repackaged in brushed aluminum bottles with a softer, colorful font. The brand is also de-emphasizing the product’s full Street King name and its association with rapper 50 Cent, one of SK’s co-owners.

“There has been a strong shift from the convenience channel to the conventional channel as consumers increasingly view energy drink products as part of their daily routine.”
—Emily Neuman, The Hain Celestial Group

“Stores can add a clip strip to the snack, drink or even the baby products aisle so the products are available for anyone or everyone who needs energy.”
—Karen Finocchio, NVE Pharmaceuticals