Growing competition in the energy drinks market has pushed down the price of a number of leading brands.
The average volume prices of premium brands including Red Bull, Monster and Relentless have fallen in the past year as pricing and promotional pressure mounts and new products - including cheaper own-label and tertiary lines - have entered the category.
Prices have been hit particularly hard in the impulse channel, with the average litre price of Red Bull down 4.6%, Monster down 9.6% and Relentless down 14.8% [IRI 12 m/e 24 May 2014]. All three - which are in strong value and volume growth - have also seen their prices fall in the multiple grocery channel though not by as much.
At £5.22, the litre price of Red Bull in impulse is more than four times the own-label average of £1.17, while Monster is £2.61 a litre and Relentless £2.49. Fastest-growing top 10 impulse energy drink brand Rockstar is £1.99.
“A lot of own-label has come into the market in recent years and has been given a lot of space on shelf,” said one leading energy drinks supplier. “People are trading down because there is so much choice.”
Price falls were particularly marked at the premium end, he added.
Relentless said it had adjusted its promotional mechanics in grocery to encourage trial, while Red Bull said the introduction of PMPs and lower prices in forecourts and m-way services had pushed down prices.
One industry observer said PMPs were no longer treated as a promotional mechanic. “They have become almost a seal of approval to tell shoppers they are not being overcharged,” he said, adding it was now increasingly common to see promotions taking PMPs below the marked price.