Energy Drink Market Situation Analysis

Product Situation

Beverage Industry

• The total non alcohol beverage market is over $110 Billion dollars in the US.

Functional beverages are approaching $15 Billion of that total.(1)

• The market is expanding rapidly due to growing global trend of eating and

drinking healthier

• The market is highly competitive given the attractive market growth rate

and the typically high price point on these types of beverages.

• There is an industry wide trust/believability issue from consumers on

whether most functional beverages/supplements really provide the

advertised function (examples: Brain enhancement, clearer skin, bigger

muscles, etc)

• Functional beverages/supplements are not required by the FDA to be

backed by science which has lead to a bevy of Functional beverages/

supplements making wide, barely substantiated claims over the past 5

years

• It is thought the segment of Functional beverages/supplements relating

to Sport and Fitness (examples: Gatorade, Muscle Milk, EAS) has a slightly

higher trust level from consumers due to the better informed users.

• Gatorade is the most well known and established sports and fitness

functional beverage

• The most popular ‘functions' of sports and fitness beverages/supplements

are enhanced hydration, facilitation of building muscle, faster muscle

recovery, weight loss, and energy.

• Several of these functions formally came in pill or powder forms and were

primarily used by hard core fitness professionals and athletes. Products

are increasingly converting to liquid form as it is less intimidating for

mainstream consumers and easier consumption.

• Creditability is the largest challenge for all functional sports and fitness