Global Energy Drinks Market Research Report: Forecast (2023-2028)

Market Definition

Energy Drinks are beverages containing a high concentration of energy-boosting stimulants such as coffee, ginseng, etc. It may or may not be carbonated and is consumed to enhance physical energy, performance, and mental alertness.

Market Insights

The Global Energy Drink Market is projected to grow at a CAGR of around 7.5% during the forecast period, i.e., 2023-28. The rise in modernization and increasing health consciousness among different age groups is predominantly driving the market. In addition, youth highly prefer energy drinks due to their mood-boosting, performance-improving, and alertness-heightening properties. 

Along similar lines, the wave of staying active and hydrating is further fueling the demand for energy drinks. There is an elevation in the number of fitness centers, their participants, and even other consumers following workout plans at home, all collectively advancing the beverage demand. Besides, market players leveraging the needs by advertising the drinks as instant energy-boost and immunity-boosting is catching youth's attention and pushing the industry forward. 

Moreover, having gained popularity among sports athletes as an instant energy booster has further catalyzed the demand for the beverage. For instance, in March 2021, Pepsico introduced the energy drink: "MTN Dew Rise Energy," targeted at morning consumers. Furthermore, the popularity of ingredients such as caffeine, taurine, and ginseng, is transforming the image of energy drinks. Since it also provides an alternate energy-elevating option to coffee, people are further driven towards energy beverages to avoid the ill effects of caffeine. 

'Contrary to this, health problems caused by over-consumption of the drinks could likely restrain the market growth. However, it further elevates users' attention and demands for organic beverages, resulting in further amplification of the industry. 

Market Dynamics

Key Driver: Awareness About Health and Hydration

People are now more attentive, aware, and active toward their health. Along with this awareness, the concern of proper and adequate liquid intake has also been infiltrated into daily life. As a result, consumers have found a rewarding solution through energy drinks to fulfill the goal of being hydrated and taking liquids throughout the day. Besides staying hydrated, the nutrients and vitamins present in such energy drinks upgrade their health. Spurred by these trends, manufacturers have noticed increased demand and production. As such, growing health awareness concerns and the appetite for staying hydrated drive the energy drinks industry. Furthermore, the added advantage of flavors and taste expands the youth's palate of liquid intake, leading to further expansion of energy drink types. For instance:

• In February 2022, PepsiCo launched energy drinks with hemp seed infusions to promote relaxation.

Possible Restraint: Risks Associated with Higher Consumption

Higher consumption of energy drinks than advised could lead to weight gain, high sugar, higher blood pressure, and more. Such concerns have made people worry and shy away from trying energy drinks. Also, content such as synthetic sourced caffeine, artificial ingredients, additives, and preservatives has negatively impacted the brand image of the beverage, which could restrain the market growth, consecutively associating it with health problems. Although this has led to a rise in demand for organic drinks, the overall demand for traditional beverages could be affected negatively, further hindering the industry's growth.

Growth Opportunity: Increasing Number of Fitness Centers, Clubs, and Participants

With the wave of adopting an active lifestyle, including the gym in daily life, and perceiving hobbies like rock climbing, hiking, and others, the requirement for an energy booster source has taken over, further pushing the industry forward. Besides, with the increasing participation of youth and women, fitness centers and such activities could further be leveraged to elevate the development of the market. Furthermore, the growing millennial population and the opportunity of various resources to advertise the beverages as a perfect energy solution, along with other benefits of the product, would push forward the market's growth in the forecast period.

Key Trend: Augmenting demand for Sugar-Less and Low Sugar Beverages

Social media and other sources have made people aware of the high content of sugar in commercial beverages. This has led to a shift towards low-sugar food choices. Also, the need to prevent high-prevalence diseases like diabetes fuels the trend of going sugar-free and following a health-conscious, active lifestyle. Therefore, companies have picked up on the ongoing habits of consumers and have assorted to adding natural sweeteners to replace sugar. Other than this, companies dedicated to bringing the audience alternatives to ordinary energy drinks have started exploring and replacing them with sweeteners like honey, stevia, etc. Furthermore, as customers are avoiding sugar and drinks with excessive sugar, companies are working on introducing new products to meet customers’ specified demands.

Market Segmentation

Based on the Nature of the Product

• Organic
• Non-Organic
• Natural

Among the three, the Organic product is anticipated to expand over the forecast period. Organic products are perceived as having a better composition, nutrition value, quality, and anti-oxidants than conventional non-organic drinks. This influences the customer's decision to try and choose the organic product over the conventional one. Additionally, concerns over the integrity of the traditional development and its artificial ingredients, being highly processed, along with the effects of pesticides and antibiotics, further makes users rely on organic drinks. Thus, being a healthier and safer option, organic drinks will likely influence the industry,

On the other hand, non-organic beverages are also expected to maintain sales, given their availability and buying behavior. The wide varieties, options, and product access also play a huge role. Also, key players have invested thoroughly in marketing conventional drinks, which would balance the industry's further growth.

Based on Consumption

• Drinks
• Shots
• Mixers

Of them all, Drink consumption experienced the highest market revenue share and is expected to prevail in the same trend in the forecast period. It is owing to consumers' preference for drinks over other consumption, such as shots and mixers. Drinks fulfill the need for instant hydration and provide the body with extra minerals and nutrients. It also boosts energy, helping people concentrate better, thus is preferred by youth and office goers who like to have an alternative option to coffee. Additionally, the variety of flavors adds to the preference. Further, drinks have a more extensive consumer base given to their diversification in consumption. It can be taken before a workout, after training, during work, while studying, or in any leisure activity, thus expressing its functionality and elevating the industry upwards. 

On the other hand, the mixers segment is also anticipated to witness a considerable hike during 2023-28. It is attributed to its growing availability, variety in flavors, and growing trend of mixing it to make cocktails and other alcoholic drinks. Moreover, with the observation that energy drinks as mixers reduce the negative impacts of alcohol, further growth in mixers consumption can be anticipated.  

Regional Projection

Geographically, the Global Energy Drink Market expands across:

• North America
• South America
• Europe
• Middle East & Africa
• Asia-Pacific

Here, North America held the largest market share during the historical period and is expected to continue the trend in the forecast years. It ascribes to the shift of energy shots into a general standard with the high consumption of coffee and energy drinks. Energy beverages have become an integral part of gatherings and parties; with the decline in soda consumption, the key market players have taken it upon themselves to provide a benefitting and healthier replacement. This has led to further industry ascension, with increased sales and production. Market players are also taking strategic action to expand the distribution across the region, such as,

• In June 2021, PepsiCo Canada became the exclusive distributor of Guru plant-based energy drinks.

Additionally, the preference of North Americans for the consumption of more energy drinks than any other geographical region, along with big manufacturers incorporating a new variety of drinks into their portfolio, has further fueled the market growth.

On the other hand, Asia-Pacific will likely experience exponential market growth, given countries including China, Japan, South Korea, and India's inclination towards trying and adopting new beverages in their diets. In addition, consumers' willingness to experiment with new flavors and integrate energy and sports drink into their schedule, along with exercise or gym, is driving the regional product demand.

Recent Developments in the Global Energy Drink Market

• In September 2022, The Coca-Cola Company added Monster Reserve White Pineapple and Monster Reserve Watermelon to its Europacific Partners (CCEP) monster line-up.
• In February 2022, Red Bull in India launched a new Red-Edition with a watermelon flavor.
• In January 2022, Starbucks, in partnership with PepsiCo, launched the energy drink “Baya” with mango guava, raspberry lime, and pineapple passionfruit flavors. 

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