Sector has run out of steam, says Beverage Brands
Flavoured alcoholic beverage (FAB) specialist Beverage Brands has pulled its Vodka Reaction (VR) declaring that premix alcoholic energy drinks have run out of steam.
The withdrawal of VR (pictured) on December 1 leaves Bass Brewers' Red, Halewood's Red Square and a plethora of smaller players to compete in the sector.
Beverage Brands marketing manager Karen Salters cites a combination of factors behind the decision, including the lower margins premixed drinks offer licensees, The Portman Group's restrictions on advertising alcoholic energy products and a general slowing of the growth of functional drinks.
"Premix volumes are in decline in the on-trade, having peaked at about four per cent of total FAB turnover," she said.
"It is our prediction that FAB products relying on the premixed energy proposition will continue to decline."
Beverage Brands launched VR two years ago in an attempt to tap into the demand for vodka and Red Bull, which had become a popular drink among 18 to 24-year-old drinkers.
But Ms Salters now holds out little hope for premixed brands in the sector. She said: "With licensees able to make higher margins through selling vodka and an energy mixer separately, there has been an ongoing objection to premixed drinks and we feel that we have taken a sensible step by withdrawing VR."
However, a spokesperson for Bass Brewers, which makes Red, said: "We clearly do see a future for pre-mixed alcoholic functional drinks and consumer insight and market figures show us there are still opportunities for growth within the sector."
In addition to Red, Bass Brewers recently launched Mojo - a premium lager containing caffeine, guarana and damiana.