Although this report looks broadly at strategy and success in the sports and energy drinks category in the world – examining the key players, the new entrants, the new niches within and beyond the market– inevitably it is “Red Bull” and “Gatorade” that dominates our discussion. “Red Bull” has created and defined the energy drinks category, giving birth to a business worth $30 billion across the globe, where it still holds an impressive 55% market share in total functional drinks market; whereas, PepsiCo’s sport drink “Gatorade” has done the same for sports drinks. Global sports drinks market is worth more than $13 billion. Innovations in functions, packaging, marketing, and distribution have led to dominance of the major players, and these are the success factors in sports and energy drinks market.

Creating a new category based around an innovative product is very rare but it is one of the most successful and well-proven strategies in the global market and also pursued by some of the most conspicuously successful companies of the last decade. Sports and energy drinks, like all the best-performing functional foods, deliver a health benefit that is immediately effective and detectable. One of the biggest advantages a product can have is to deliver a benefit that consumers can quickly see or feel. It is a key way of creating brand loyalty. Marketing is not a battle of products; it is a battle of perceptions. To be prominent in consumers’ minds you need a clear, consistent and an uncompromising brand position with a clear and consistent benefit statement supported by long-term marketing expenditure.

The sports and energy drink market is now in the process of fragmentation into a series of niches. This trend is being seen across the globe, with most functional and nutritional sports and energy drinks selling on a niche basis. The new niches opening up in energy drinks include Natural and Organic energy drinks, Women’s Energy Drink, Working Men’s Energy Drink, and drinks that elevate mood and brain functions. The message that a drink is naturally healthy is one of the most persuasive ones in marketing drinks. Fruit-based energy drinks, such as “Ocean Spray Cranergy” and “Del Monte Bloom Energy” are seeking to capitalize on this trend targeted at women. Products targeted at women are proliferating, but this segment has its problems and few brands are making headway. An adrenaline-rush, all-male approach can be guaranteed to alienate many consumers – but that is the nature of niche brands. They are intended for a specific group and it is a message that works for young men. A new trend that offers opportunities for strong niche brands founded is the drinks that elevate brain and moods.

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