Build up the buzz: energy drinks in pubs

Despite the recession, there is still plenty of scope left for innovation and growth in the energy-drink sector, particularly in the on-trade, according to the brand owners. Robyn Black reports.

It might not have been the best year for energy drinks in the on-trade — in 2010 value dropped 5% to £128m and volume 10% to 21 million litres (CGA Brand Index, total pubs and clubs, MAT to week ending 30/10/10) — but, like a Friday night reveller at 11pm, there's enough fuel in the tank to make a night of it yet in 2011.

Take the number of brand launches in the past 12 months for a start. First up was Coca-Cola Enterprises (CCE), which added Monster to its on-trade energy drinks offer in March, followed by an energy drink with benefits — a "sex shot" from lad's mag Loaded launched in June.

Around the same time a new concept from Global Brands' Kick Energy range hit the market, Kick Ultra — a cocktail ingredient designed to have a "subtle flavour", which allows consumers to add an energy shot to their favourite cocktails and mixed drinks.

Then iconic men's magazine Playboy joined the fray with Playboy Energy in December, a mix of ginseng root, guarana extract and Damiana leaf, fronted by TV siren Kelly Brook. Not a bad roster of innovation for a re-cession year, is it?

However, the question really is, despite the new launches, if there is any scope left for further growth in the category, given that distribution is already broad and consumer awareness levels high? Unsurprisingly, the brand owners are convinced that there is plenty of opportunity left to grow, "particularly in the on-trade," says Doug Bairner, head of category marketing at Red Bull UK.

"Pubs and bars remain a priority for us as it's in this lively and friendly atmosphere that people first encounter energy drinks," he says.

Established​

Certainly the category established itself in the bar and late-night, high-energy sector of the trade, but several brand owners point to success they are now seeing in the more mainstream pub trade through the likes of Admiral Taverns, Punch and the independent freetrade, which is where further growth will come, they claim.

In such an environment, Bairner says that Red Bull research shows most drinkers trade up from pints of lager at the start of the evening to an energy drink, often with a spirit, later on. The key to expansion will be unlocking opportunities earlier in the evening, he says.

"Part of our plans for this year include looking at stretching the evening, so it's not just late, but also earlier in proceedings that people might turn to an energy drink. To achieve that what we need to do is convey the message of energy drinks being functional, as good for an energy boost whatever the time of the evening, or day."

Non-drinkers are also a largely untapped growth opportunity, according to Bairner. "Our in-house data suggests that non-drinkers who choose to drink Red Bull feel more a part of the group and the evening," he explains. "So we are keen to get that message over and push Red Bull as an alternative to alcohol on a night out."

Women also represent untapped growth for energy drinks and Red Bull will be using more of its 2011 marketing budget to push its sugar-free variant to lure them in. Perhaps surprisingly, new kid on the block Playboy Energy also sees females as an opportunity, along with slightly older drinkers.

"Energy drinks are synonymous with youth and primarily male youth," says the brand's Simon Lewis. "Much of the marketing of these brands is based on extreme sports or popular music. As a category with a sizeable presence over the past 15 to 20 years this means the original energy drinks generation has only recently reached the 35 to 54-year-old age bracket. Per capita consumption in this age profile is certainly lower than younger age groups and is, therefore, an opportunity. Playboy Energy has one of the most iconic brand images in the world and one that has particular resonance with a more mature age bracket. Stylish branding and a softer image may also entice more female drinkers into the category."

Criticism​

There is some criticism of licensees failing to stock a wide enough variety of energy drinks, which not only makes it more difficult to attract new drinkers into the category, but also damages the chance of better profitability for licensees, as energy drinks have some of the biggest margins.

"The vast majority of retailers will only stock one brand of energy drink in a 250ml can," Lewis says. "This seems a missed opportunity, after all variety is good and in such a high-value category as energy drinks it would be com-

mercially sensible for the on-trade to welcome category innovation."

As well as offering a range of different brands, flavours and formats, licensees can boost highly profitable energy drinks sales by offering a variety of different serves.

Justin Horsman, Kick brand manager at Global Brands, says he and his team are working hard to promote new and enticing energy drink serves.

"What we have found is that people in their late 20s and early 30s don't like the taste of traditional energy drinks, so they certainly aren't mixing them with their favourite spirits," Horsman says.

The launch of Kick Ultra into the on-trade was an attempt to address this, moving the category into cocktails, pitcher drinks and a wider variety of long mixed drinks.

"I think the traditional vodka and energy drink serve still has a massive part to play in the category, but I think consumers have moved onto the 'bomb'-style serves and there is growing interest in long drinks and cocktails," he says.

"We're always working on crea-tive ways to keep the category fresh and we've developed 'twisted shots', a special shot glass that holds two shots twisted around each other, and signature serves such as Glitter Storm (Kick Ultra and Goldschläger)."

Innovation​

More innovative is the company's development of Smoking Cocktail Nights in venues across the UK.

"Smoking cocktails are made using food-grade CO2, which is 'charged' into a

chamber at the bottom of specialist plastic glassware," Horsman explains. "Once the Kick Ultra and the rest of the mix is poured over the dry ice, it reacts to create a smoking, bubbling concoction that is creating a real buzz in the on-trade."

Indeed the company is pouring £2.5m into the brand this year, "a lot of which is focused heavily" in the on-trade, he says. Branded Range Rovers and a link up with the computer-game community form part of the plans, but, of course, it isn't the only brand owner to have earmarked specific investment for the on-trade this year.

Red Bull is aiming to bring yet more excitement to venues in 2011 by doing more around bringing to life its links with music and culture in outlets, while Playboy has plans for a campaign with the strapline "Getting the Party Started," in premium venues around the UK.

CCE with its Relentless and now two-strong Monster range (Monster Export, an on-trade variant of Monster Original, and Monster Ripper containing 50% fruit juice) will also be turning its attention to the on-trade.

"We are committed to driving growth in on-premise through both innovation and promotion," says Stuart Agate, head of energy. "We have planned significant investment in 2011 for both Monster and Relentless," he adds, though details remain under wraps for now.

"Energy is still the fastest-growing sector within total soft drinks and licensees should ensure they tap into that opportunity by stocking the best-selling brands and ensuring they are visible to customers in their pubs," he says.

Even with all the excitement around a category like this, sometimes it is still about getting the basics right.