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As consumers seek healthier energy alternatives, the energy products category is finding opportunities for market growth and product innovation.
Traditional energy drinks like Monster, Rockstar, and Red Bull have long dominated the energy products space. These first-generation energy products, the darlings of adrenaline junkies everywhere, gained notoriety through smart marketing partnerships with major athletic events and by appealing to a youthful demographic with hip and cool marketing campaigns.
But energy products are no longer just for twenty-something college students. Penny Portner, director of marketing for Bioenergy Life Science (Ham Lake, MN), says that energy products have grown up and are expanding in ways that allow these products to offer more than just a caffeine boost.
“A lot of brands are creating cross-functional products, while others are adding natural ingredients or reducing sugar and caffeine,” Portner says. “Too much sugar and too much caffeine were obvious health concerns [with traditional energy products]. These newer products are either going caffeine-free or are using alternative, natural sources of caffeine like ribose and green tea.”
Portner points to Bioenergy Life Science’s branded ribose supplement as evidence of this trend. Rather than hitting the consumer with a megadose of caffeine, Bioenergy Ribose provides consumers with exogenous ribose, the building block of ATP.
As consumers seek healthier energy alternatives, expect the energy products category to present opportunities for market growth and product innovation. Here are just some of the trends driving the energy market.
Functional Concerns Drive Growth
The energy products industry is no longer just about energy. Julie Deustua, PR and events manager for Compound Solutions (Carlsbad, CA), says that energy products are now turning toward additional functional concerns instead of merely adding more and more caffeine.
“The trend is toward a maximum of about 200 to 300 mg of caffeine,” Deustua says. “Products are layering mood and focus on top of energy. There’s also organic caffeine and adaptogens like cordyceps and ashwagandha for the natural crowd.”
Deustua says that Compound Solutions’ branded energy products TeaCrine and Dynamine are quite popular among biohackers and gamers, two consumer groups who are looking for a long-lasting energy boost. Functional energy, she says, is the cool new kid on the block.
Says Deustua: “After 20 years of Monster and Red Bull, the market has finally innovated beyond just ‘energy’. Mood, motivation, and focus is the new white space.”
Millennials Seek “Grown-Up” Energy Drinks
Millennial consumers have long been the prime audience for traditional energy drink brands like Monster and Red Bull. A press release by Mintel noted that 61% of Millennials consumed energy drinks in 2015, up from 55% the year prior. Millennial consumers-and Millennial men in particular-have long been the face of energy drinks, and Mintel notes that two-thirds of older Millennial consumers believe that energy drinks and shots are good alternatives to coffee and sodas.1 Mintel is forecasting that the United States energy drinks/energy shots market will reach $19.2 billion in sales by 2021, a 47% increase over 2016.2
Brian Zapp, creative director for Applied Food Sciences (Austin, TX), says that 18- to 35-year-old males are a key demographic for energy product brands. Millennial consumers, he says, are also the same consumer base that is driving industry-wide changes.
“It’s important to observe that as this core consumer base matures, they will need ‘grown-up’ energy products that also fit with their values,” Zapp says.
Clean-Label Products Gain Popularity
Energy products and ingredients are undergoing an evolution. Zapp says that a large subset of energy product consumers don’t trust the artificial ingredients in mainstream energy drinks. By substituting artificial and unrecognizable ingredients with known ingredients like coffee and tea, he says, energy brands can leverage consumer familiarity to build trust.
“The image of energy is quickly changing into what is being identified as ‘clean energy,’ and even the largest companies are trying to evolve to stay on top of this trend. AFS has a core set of ingredients within the clean-energy category…over the last three years, AFS has been studying Ilex guayusa in depth to research its nootropic functionalities.”
Ilex guayusa is a sweet-tasting caffeinated leaf of the holly species that grows in the upper Amazon basin in Colombia, Ecuador, and Peru and is related to yerba mate (Ilex paraguariensis). Zapp says that guayusa is just one of many clean-label ingredients that make up what Applied Food Sciences calls “the next generation of caffeine.”
“The largest area of use for guayusa is in beverages,” Zapp explains. “Our branded Amatea organic guayusa extract targets the modern workforce and even gamers-consumers who need a premium energy experience that boosts cognition.”
Balanced Blends without Caffeine Jitters
One emerging trend in the energy supplements space is the trend toward jitter-free products. Zapp says that Applied Food Sciences is pursuing research into the nootropic aspects of various botanical ingredients in order to provide the consumer market with better alternatives to caffeine. Caffeinated products, he says, come with a price: The jitters.
“When caffeine is metabolized, the adrenal medulla releases the fight-or-flight hormone epinephrine,” Zapp says. “So the side effects of caffeine resemble the same feelings of nervousness or anxiety that are triggered when the body is under stress. We all know what that feels like, [that feeling] after you’ve had one too many cups of coffee.”
Zapp says that guayusa leaf extract presents a unique new opportunity in energy supplements: A boost without the jitters. He cites the results of a double-blind crossover clinical trial3 published in 2016 that examined the effects of guayusa leaf extract. In this trial, 12 healthy men between the ages of 21 and 34 were randomly assigned in a block-6 design to receive 200 mg of caffeine sourced from green coffee extract (n=4), the same amount of caffeine sourced from guayusa leaf extract (n=4), or a synthetic control (n=4). Three visits were scheduled at least 48 hours apart, and the participants crossed over to a different condition after each visit. The participants were assessed for serum caffeine levels, blood pressure, heart rate, and urinary levels of serotonin, GABA (gamma-aminobutyric acid), dopamine, epinephrine, norepinephrine, and glutamate.
This trial, which was funded by Applied Food Sciences, found that guayusa leaf extract did not cause any statistically significant changes in serotonin, dopamine, norepinephrine, or GABA levels. The study authors concluded that caffeine sourced from guayusa leaf extract may have fewer or less intense adrenaline-related side effects when compared to synthetic caffeine and caffeine sourced from green coffee extract.
Energy Products Get Smart and Go Online
Energy product brands have started branching out into the cognitive performance market to appeal to biohackers, gamers, and busy working professionals. Deustua says that brands are now adopting ingredient blends that boost cognition by working directly in the brain as well as by leveraging the gut-brain connection.
“[Brain-oriented energy products are] using ingredients that hit the [central nervous system], but also stimulate a cognitive symphony of serotonin, dopamine, and acetylcholine,” Deustua says. “A separate segment that has been taking off is the low-carb energy segment-particularly, beta-hydroxybutyrate. This segment has seen exponential growth, and formulators are repurposing existing ingredients into nootropics products.”
Emerging Opportunities for Savvy Brands
Bioenergy Life Science’s Portner says that energy product brands would do well to simplify their marketing efforts. Nutritional factsheets are confusing, she says, and it’s not always easy for consumers to understand what they’re getting.
“There are just too many options out there,” Portner says, “and many of those options are too similar. So consumers either choose the brand they know, or they spend time reading nutritional facts until they find what they want. Brands need to simplify their formulations to be clean and unique.”
Deustua says that the energy market is increasingly moving online and direct-to-consumer, particularly where powders are concerned. Distribution and cooler space issues are making ecommerce solutions like Amazon more attractive options for energy brands given the lower overheads associated with online sales.
Consumers’ lives are getting busier and more complicated by the day. Long work hours, active family lives, and all manner of personal obligations encroach on their time and energy. As mainstream consumers turn to supplements and nutritional products to enable them to keep up with the busy pace of modern life, they will undoubtedly turn to healthier options that don’t leave them feeling jittery and nervous. Expect cross-functionality and different consumer subsets to open up a variety of verticals in the energy space in the future.