Energy Drinks Market - Growth, Trends, and Forecasts (2023 - 2028)

Energy Drinks Market - Growth, Trends, and Forecasts (2023 - 2028)

The energy drinks market is projected to register a CAGR of 8.46% over the upcoming five years.

Increased urbanization, rising disposable incomes, and growing consumer health consciousness all contribute to an increase in demand for non-carbonated beverages. Energy drinks are widely consumed by adolescents due to their claims of improving performance, endurance, and alertness. At the same time, long and erratic working hours and the increasing occurrence of social gatherings are driving consumers toward the consumption of energy drinks.​

There is a rise in the number of consumers who are doing workouts and engaging in various exercise regimes in the comfort of their homes, leading to a continued need for energy drinks. There is a rising preference for rich sources of immunity-boosting foods and beverages that contain vitamins, minerals, and other essential ingredients that boost immunity. This has forced a greater number of players to enter the functional energy drink space in the market. Brands are trying to leverage the trend of "immunity-boosting" by incorporating perceived ingredients or adding the concept of immunity boosters into their marketing activities.

Moreover, growth in the number of health-conscious consumers and increasing consumer awareness regarding active lifestyles, along with growing rates of lifestyle-related diseases, inspired health-oriented consumers to opt for healthy and sugar-free drinks. The energy drink market is also projected to grow due to an increase in promotional and advertisement strategies.

Energy Drinks Market TrendsGrowing Consumer Inclination Toward Low Sugar/Sugar-Free Beverages

Because of the high prevalence of diabetes and other chronic illness, consumers are becoming more aware of the importance of a healthy diet and an active lifestyle. Consumers are choosing low-calorie, low-sugar, or sugar-free dietary patterns in foods and beverages as a result of rising health concerns and increased attempts to prevent the emergence of lifestyle illnesses. Natural sweeteners, such as stevia, are preferred by consumers in their beverages. Companies like PepsiCo Inc. and Coca-Cola have committed to eliminating artificial additives and lowering sugar in their products. Furthermore, changing consumer preferences for sugar-free or low-sugar beverages prompted beverage manufacturers to create new products. Customers are attempting to avoid sugary drinks in order to prevent the negative consequences of excessive sugar consumption, so key players are working on a variety of new products to meet the rising demand for such items. Nexba, a provider of non-alcoholic beverages, took a similar strategy, expanding its product selection to meet the expectations of health-conscious consumers. For instance, in May 2022, Nexba introduced a range of caffeine- and sugar-free energy drinks with added vitamins and prebiotics. Nexba Natural Energy comes in two flavors, namely, Lemon & Yuzu and Wild Citrus.

North America Dominates the Market

The high consumption of energy drinks and the massive coffee culture in United States have pushed the notion of energy shots into the mainstream, which is a major factor driving the sales of energy drinks in the country. Energy drinks are an integral part of social gatherings, parties, and celebrations in United States. Manufacturers such as Red Bull and Monster Beverages are offering their energy drinks in multiple flavors and two major packaging types, which include PET bottles and cans, providing consumers with a wide range from which to choose their suitable drinks.​ Furthermore, soda consumption in the country is declining, which has created a great opportunity for manufacturers such as Coca-Cola and PepsiCo, who are attempting to capitalize on the name recognition of their legacy brands by making a bigger dent in the growing energy drink category.​ In addition, the manufacturers are taking strategic initiatives to expand their distribution networks and boost their geographical presence. For example, in June 2021, PepsiCo Beverages Canada became the exclusive national distributor of Guru plant-based energy drinks. It is expected that Guru will benefit from PepsiCo’s expansive direct-to-store distribution network across Canada.

Energy Drinks Market Competitive Analysis

The energy drink market is competitive, making it hard for new and small companies to compete. Red Bull, The Coca-Cola Company, Rockstar Inc., and PepsiCo are a few of the many companies with high shares in the energy drink market. Companies operating in the market are focusing on personalization and convenience and are also providing healthy, zero-calorie, and low-sugar functional energy drinks to scale their energy drink production. Additionally, product launches may help companies tap into the huge potential for growth in developing regions. Most manufacturers create product awareness through advertising and celebrity endorsements. For example, sports events are sponsored by energy drink manufacturers.

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