United States Energy Drink Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

United States Energy Drink Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The US energy drink market is projected to witness a CAGR of 7.63% during the forecast period (2022-2027).

The net sales of energy drink manufacturers declined considerably during the COVID-19 pandemic due to the limited demand from consumers and a reduction in inventory by the major companies, including Monster Beverage. Additionally, the slowdown of numerous product launches is hindering the market growth over the medium term. The post-pandemic market saw a number of new launches and geographical expansions by companies like Red Bull and OCA, owing to the rising demand.

Energy drinks are gaining immense popularity among the millennial population of the country. The primary reason for this popularity is directly related to the aggressive marketing campaigns, which are mainly directed toward young consumers. Furthermore, advertisements promote that energy drinks ignite the mind, refresh the body, and enhance performance and stamina.

The manufacturers of energy drinks are focusing on expanding their product lines by introducing new flavors to encourage frequent consumption. Moreover, the increasing functionality of new age beverages to target health-conscious consumers is emerging as a trend among manufacturers. Companies are focusing on functionalities, such as nutrition, energy, muscle relaxation, alertness, virility, and potency, to make their products multifunctional and attract consumers, primarily for daily consumption.

Key Market TrendsIncreasing Expenditure on Advertisement and Promotional Activities

The surging expenditure on advertisement and promotion by the leading players is widely strengthening the market growth. Apart from promotional expenditure, endorsements and sponsorships are also a few of those key factors influencing the market growth. As part of the promotional strategy, Red Bull owns football teams, with clubs in Austria, Germany, United States, and Brazil featuring the Red Bull trademark in their names. By associating the drink's image with these activities, the company seeks to promote its public image and raise brand power. To compete with market leaders in United States, key players in the soft drinks business, such as Pepsi, entered the energy drinks market.

The Drinks Segment Dominates the Energy Drink Market

Energy drinks are an integral part of social gatherings, parties, and celebrations. Manufacturers, such as Red Bull, Monster Beverages, and others, are offering their energy drinks in multiple flavors and two major packaging types, which include PET bottles and cans. This provides the consumers with a wide range of choices in terms of both packaging and flavor. In lieu of acquiring a higher market share, the soft drink giants are expanding their customer base by merging with giants in the market. For instance, in 2020, PepsiCo acquired Rockstar to spread its reach in the energy drink segment.

Competitive Landscape

The US energy drink market is competitive. Red Bull GmbH, Monster Beverage Corporation, and PepsiCo have the highest market shares. The market is highly consolidated with other players such as Campbell Soup Co., Arizona Beverages, and National Beverage Corp., who are the leaders in the industry. The US energy drink market is expected to witness significant growth over the forecast period, owing to the development of several marketing strategies, which greatly rely on product innovation, product differentiation policies in terms of ingredients added, and packaging and branding of the products via social media, to attract the target group of consumers.

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