New energy shots have been popping up all over the shop recently, but Red Bull has been conspicuous by its absence - until now. Nick Hughes asks if the company has left it too late
Red Bull has finally launched its own energy shot. It's about time. An energy drinks category minus the progenitor of liquid stimulation is like a Full English breakfast minus bacon. What is astonishing is the rate at which new energy shots have appeared, despite the lack of compelling evidence that there is even a market for them in the UK.
This year alone, Relentless, Lucozade and Red Bull have joined niche brands such as Quick Energy, Powershot and Voltz in launching pocket pick-me-ups. But does this fledgling category have the energy to sustain so many brands?
In the US, the energy shots market is expected to top $500m in value by the end of this year and Red Bull says it expects to replicate this success in the UK. But banking on US trends bridging the Atlantic is dangerous, argues MD of Consumer Brands at Dragon Rouge Kate Waddell. "It's difficult to see whether there is a big marketplace for energy shots in the UK as, compared with the US, there's so much alternative choice in the energy-provision sector," she says.
"The US market is still younger in terms of the energy proposition. Red Bull took longer to get a foothold there, so this may be why there was still space for the growth of the energy shot offers."
Red Bull's head of off-trade Matt Hollier concedes it is too early to gauge the potential size of the UK market, but is in no doubt that shots can make a big splash if retailers merchandise them in the right way and more importantly the right place. "A shot is an ambient product, so it needs to be positioned at impulse purchase points and not in the chiller cabinet," he says. "I think if we all as manufacturers focus on that opportunity, that's where we'll manage to have a sustainable, competitive category. If we don't do that, I'm sure over time a number of brands will come and go."
The smaller players may find it tough, suggests Waddell, pointing out that while the big brands will be able to draw on their already established energy-giving credentials, lesser-known brands will have to create their own specialist niche such as mental stimulation, staying power or enhanced concentration to gain a foothold.
Kris Yule, UK director of sports and beverage company Go Fast!, which has recently launched its own energy shot, agrees that niche players must offer a strong point of difference in order to survive. Go Fast! is targeting older consumers by emphasising the active ingredients contained in the product.
"Our demographic is a busy adult, someone who is probably older than your average energy drink user and less likely to drink an energy drink on a regular basis," he says, adding that they might, however, be interested in a shot.
Of course, there are some inherent dangers in launching shots and Yule says even established brands will have to communicate clear usage occasions to consumers in order to avoid cannibalising sales of their standard energy drinks. "People who go into any impulse outlet with a need for energy are going to come out with whatever their choice of energy is," he says. "I don't know if that need doubles if there's a shot now available."
Red Bull's Hollier, however, is confident the two products can sit side by side. "There's a massive opportunity for sport and portability with the shots," he says. "I can see people picking up an energy drink for right now and a shot for later when they're on the move. Because the shots are ambient, there isn't the risk of them going warm over time; people can stick one in their pocket and keep it for later."
Relentless is already bringing new users into the energy drink sector 10 weeks after launch, says Dave McNulty, head of energy at Coca-Cola Enterprises. "To date, the product has been extremely well received by the trade," he says. "It's gained excellent traction across all channels."
Having ceded the early advantage to its rival, Red Bull's new shot will need to use all its energy to narrow the gap.