Shoppers are turning to energy drinks to help them concentrate on work, fuel up for home workouts and power through lockdown
Quarantine fatigue: it’s the term psychology experts were quick to coin as Covid-19 began giving people the blues. It describes the feeling of being physically and mentally drained during lockdown. And it’s got housebound Brits downing energy drinks by the bucketload. Take-home value sales surged 19.4% in the 12 weeks to 9 April [Kantar]. That equates to an extra £10.9m - or 4.4 million litres - as punters added pep to their new normal.
“Something many consumers have been finding during this unprecedented period is a huge lack of motivation and energy, and they are therefore looking for products that can provide them with a boost,” says Mike Simons, head of category at Grenade. It’s good timing for the sports nutrition brand, which made its energy debut in November with a fruit-flavoured option promising to pack “the same punch as two espressos”.
But it’s not all plain sailing. While consumers are lapping up energy drinks at home, lockdown has dampened on-the-go sales. More than a quarter of the UK’s workforce is now furloughed and millions more are working from home. That means far fewer are picking up an energy drink on the way to work.
So what does this mean for the overall energy market? Has the lockdown been a boost or a comedown for sales? And how have consumption habits changed as consumers remain housebound?
“Consumers are looking for products that can provide them with a boost during lockdown”
On-the-go typically makes up the vast majority of energy drink sales. Last year, take-home sales were just shy of £240m [Kantar 52 w/e 24 February 2019]. That was just a fraction of the £1.1bn made by the top 10 brands including on-the-go sales [Nielsen 52 w/e 16 February 2019].
So it’s little surprise that lockdown has had a negative effect on the market. While some on-the-go purchases have migrated to the take-home arena, it hasn’t been enough to completely mitigate the impact. Overall, energy drink sales declined 8.8% to £281.9m in the past three months, and nine of the top 10 brands experienced a slump in their values [Nielsen 12 w/e 16 May 2020].
Perhaps the only surprise is how well the top energy drink brands have weathered the storm. Red Bull is down just 5.9% in value, Lucozade Energy is down 8.3% and Monster actually gained 10.6%. Not bad for a market that lost its core occasion almost overnight.
It’s telling that all of these brands had far steeper declines in units. Because in lockdown, consumers are buying fewer but larger packs. It’s a trend that category leader Red Bull has noticed. “The frequency of consumer shopping trips has decreased significantly, resulting in a significant rise in home-stocking,” says the brand’s off premise sales director Andrew McQuade.
“The frequency of shopping trips has decreased, resulting in more home-stocking”
He points to its four-packs as experiencing particularly “notable growth”. Red Bull Energy 4x250ml put “£1.9m of growth into the category in 13 weeks” he adds, while sales of its 4x355ml format were seven times higher than for the same period in 2019.
Boost has similarly seen an uptick in sales of multipack and larger formats. “Our one-litre energy product is now the number one take-home energy drink and accounts for 60% of the entire take-home energy category in independent convenience,” says MD Simon Gray.
Plus, the likes of Red Bull and Boost have a key point in their favour. As lockdown fatigue hits, consumers are veering towards harder energy drinks that contain caffeine or taurine. Kantar figures show ‘stimulation’ drinks, classified as drinks whose main energy ingredient is not glucose, grew ahead of the total category (see left).
That’s because housebound consumers are looking for a substantial pick-me-up, says Adrian Troy, marketing director at AG Barr. “We may have lost the busy morning commute, which has always been a hotspot for energy consumption, but it’s been replaced by the pressure of lockdown,” he explains.
Indeed, being homebound has increased the need to tackle mental fatigue, suggests Huib van Bockel, founder of Tenzing, which is made with green coffee, guarana and green tea. “Changes to the majority of people’s working environments has meant an increased desire for products that aid concentration,” he adds.
There is another factor at play here, too: motivation. Housebound consumers are increasingly “looking to fuel up while they keep fit”, says Simon Harrison, VP of commercial development at Coca-Cola European Partners GB. “Lockdown has also seen a growing emphasis on staying fit and healthy, with almost half of people making an effort to keep active at home,” he says.
It’s for this reason that, in spite of lockdown, CCEP continued its online push of Reign Total Body Fuel, the brand it launched in late 2019. By 28 March, it had racked up £1m as part of energy’s burgeoning fitness sub-sector inhabited by the likes of Nocco and Grenade, and since joined by Tenzing. All contain branched-chain amino acids, the so-called building blocks of protein.
“Changes to working environments has led to demand for products that aid concentration”
There is also the question of what these brands don’t contain. All these drinks proudly carry low or no sugar credentials - a key selling point during the global pandemic.
As consumers become more aware of their health, shoppers are making “lower sugar, healthier” choices, says Carabao UK&I MD David Butcher. He sees that as a crucial benefit for his brand, which contains “only 63 calories per can and 60% less sugar than Red Bull, Monster and many others”.
Of course, that comparison is against standard Red Bull. Kantar analyst Ben Dixon notes that “sugar-free variants are taking on a more important role” at brands such as Red Bull and Monster. That’s helped diet stimulation drinks grow ahead of the market, with a 25.6% increase in take-home sales over the past three months [Kantar].
A constant pipeline of innovation has helped to drive that figure. In January, Monster debuted its Ultra Paradise variant flavoured with kiwi, lime and cucumber. That was followed by the revival of Red Bull Zero in April, three years after it disappeared from UK shelves. Reformulated to make it taste more like Red Bull’s full-sugar original, the drink “offers shoppers more choice for those moments where they’d rather have less sugar” McQuade claims. “Zero variants are growing at 20.7%, displaying an increasing demand for zero-calorie options.”
But that doesn’t mean all healthier options are flying off the shelves. Take-home sales of everyday diet options - those that don’t rely on high caffeine and taurine levels - fell 6.2% in the recent 12-week period. In the full year, that decline was far more dramatic at 20.9% [Kantar 52 w/e 26 January 2020]. It’s quite a reversal of fortunes on last year, when everyday diet options were in modest growth.
Kantar attributes this downturn to Lucozade Zero. “The majority of diet everyday energy sales come from Lucozade Zero, and it is driving the decline in the sector,” says Dixon. The brand’s poor performance “is due to shoppers moving their spend to Lucozade Energy as the cost saving from the £1 EDLP on one-litre bottles outweighs the benefit of a diet offering”.
It just goes to show that, even in a pandemic, punters do put a price on health.
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He joined the magazine in January 2016 as food & drink editor, having been at financial & legal publisher LexisNexis.
Follow Daniel on Twitter: @danielmcselwood