Global energy drinks market is expected to witness a high growth on account of growing consumer’s health consciousness hectic lifestyle. The overall market is projected to grow at an approximate CAGR of 10% from 2016 to 2024.
These drinks are beverages which are intended to give instant energy. Such drinks kind provides mental and physical stimulation. The main ingredient which helps in providing stimuli is caffeine.
Taurine is another major component which is essential for cardiovascular function and skeletal muscle development. Energy drinks manufacturers claim that these beverages reduce muscle fatigue, ease the mental process and protect heart health.
However, a scientific consensus is yet to be achieved to support these statements. Increasing awareness of health consciousness is the key driver for the growth in energy drinks demand.
Both young, as well as old, are attracted towards these beverages which promise to keep the consumers healthy and active. More than 50% of the world population live in urban areas. Hectic lifestyle and an increase in disposable income coupled with a need for instant energy are expected to drive the market growth over the forecast period.
Recent trends show that most of the manufacturers create product awareness through attractive advertising. Major sports events are sponsored by these manufacturers. Red Bull undertakes marketing campaigns in major football events and Formula 1 car racing.
They have been targeting the youth through extreme sports event. Distinguished sports personalities are endorsed to promote the brand. This kind of push strategy for increasing the global demand is very popular in energy drink market.
Energy beverages consumption has turned into a status symbol, especially for the youth. Such consumer behaviour type is expected to drive further the overall market demand. Consumption of alcohol mixed with these energy beverages is quite popular in urban areas.
These drinks have formed an integral part of social gatherings, parties, and celebrations. Substitutes availability is expected to provide a significant threat to global industry growth. Energy drinks face stiff competition from aerated beverages, malted health drinks, and packaged juice.
These substitutes are low in cost as compared to some of the energy products. There has been rising concern over these beverages consumption on account of the caffeine presence. Excess use has been associated with health risks which include sleeplessness, frequent urination, and abnormal heart rhythms.
Such health risks associated are expected to restrain global industry demand over the forecast period. Low sugar energy beverages provide great opportunities to the industry participants in near future.
Low sugar drinks popularity is increasing on account of their low-calorie content. Countries with young population are potential markets that companies look out for increasing market share.
Energy drinks are sold mostly in tin containers. Manufacturers use these containers to a great extent to promote their products. These containers have an attractive design with vibrant colors and are one of the reasons for its popularity.
The tin packaging also ensures quality and convenient usage. Food and Drug Association (FDA) have issued regulations and standards that govern beverage market in the U.S. European food safety authority has concluded that energy drink consumption up to 400 mg caffeine per day is safe for adults.
There are stringent laws disallowing sales to young children and pregnant women in countries such as Norway, the UK, and Colombia. Similarly, Australian beverages have warning message inscribed for not having more than two cans per day.
Segmentation is done based on its content which includes non-alcoholic and alcoholic. Soft drinks have been more popular owing to growing health consciousness. Segmentation by population group.
This includes adults, teenagers, and geriatric population. Adults form the largest consumer database among all. North America was the most important region in the global market and is expected to show its dominance over the forecast period on account of increasing health awareness and busy lifestyle.
Regional demand is followed by Asia Pacific where the market is mostly driven by young adult population. India and China have shown significant growth in the retail sector and therefore making the product easily available.
Over the forecast period, Europe and South America is expected to show a steady growth mainly on account of westernization coupled with awareness. Africa is about to witness a slow growth owing to low disposable income and lack of product awareness.
Red Bull and Gatorade are the most familiar brands and lead the market. Other popular brands include Rockstar, Monster, NOS, Amp, Full Throttle, Arizona Energy and Xyience. Trends have shown that major industry participants implement similar strategies to survive the competition and maintain their market share.
Manufacturers concentrate on product innovation to gain first mover advantage. Companies have been continuously trying to differentiate their products from the competitors to penetrate existing market. Red Bull separates its products with the help of taurine and positions itself as a premium product by selling at a high price.
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