The energy drinks market is maturing - and so should brands’ marketing strategies, says XYIENCE

The energy drinks market is evolving as its core audience has matured and brands are expanding their marketing platforms. ©iStock/Elisanth_

The energy drinks market is maturing and so too is its consumer base, prompting the category to expand its marketing position to better appeal to a slightly older demographic.

While the energy drinks market is still expected to grow through 2017 to reach $8.7bn, according to IBISWorld, the target consumer age has shifted from the 18 to 24 age range to 27 to 37 year olds or “older millennials.”

These consumers have reported that they drink more energy beverages than any other age group and 47% of older millennials reported increasing their energy drink consumption between 2015 to 2016, Mintel found.

Energy drink brand XYIENCE entered the market in 2006 with its zero calorie energy drink, a feature most other energy drinks did not have at the time. Veteran energy drinks brands like Red Bull and Monster Energy launched zero calorie versions of their products in 2012 and 2013, respectively.

“The advantage we have over the Monsters and the Rockstars of the world is that our product portfolio is 100% zero calorie, zero sugar, and our entire brand can and does stand for that,” XYIENCE marketing director, Todd Sternberg, told BeverageDaily.

“The bigger brands may struggle to be all things to all people and to make their extreme positioning palatable for a more mature crowd.”

XYIENCE is available in eight zero-calorie flavors (Cherry Lime, Mango Guava, Frostberry Blast, Blue Pomegranate, Cran Razz, Fruit Punch, Tangerine and Melon Mayhem) sold in 16-ounce 12 packs for $24.

Extreme to mainstream sports marketing

One notable development in the energy drinks category is the gradual marketing shift of extreme sports endorsements such as NASCAR to more mainstream sports such as baseball and golf.

“This new focus on mainstream sports is driven by the fact that the category is maturing, and older consumers - yesterday’s 18 to 24 year olds - are coming back to energy drinks, but don’t necessarily identify with the category’s traditional marketing platforms,” Sternberg said.

While Monster Energy has maintained its partnership with NASCAR, it has also picked up endorsements from professional athletes including Tiger Woods, growing its representation in the professional golf fan base.

Red Bull has also incorporated more traditional athletic marketing with professional baseball player, Kris Bryant of the Chicago Cubs, becoming the brand’s newest sponsor in 2016.

“It’s important to note that the category leaders are not walking away from extreme sports – they are expanding their marketing platforms to include mainstream sports,” he added.

Migration from convenience to grocery

Along with a consumer shift, there is also transition of energy drinks being sold primarily in convenience retail outlets to mainstream grocery stores.

“Energy drink volume is still heavily concentrated in the convenience channel, which is amazing given how large the category is already,” he said. 

“We’re finally seeing grocery emerge as a key channel, but there is much ground yet to be covered.”

Where is the category headed?

Zero calorie energy drink options are moving beyond the traditional grape and orange flavor to more with more “sophisticated” flavors such as mango, melon, and kiwi. These will continue to be a very strong driver of growth over the next one to three years, according to Sternberg.

XYIENCE has embraced this trend trajectory through its brand relaunch repositioning itself to appeal to college sports fans. Before its presence during in NCAA college football games in ESPN, the company was closely linked to the Ultimate Fighting Championship (UFC).

“Since the brand’s re-launch, our marketing has been focused almost exclusively on college sports; in 2017, we’re excited to be expanding beyond that platform to reach even more consumers,” Sternberg said. 

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