Changing Consumer Demands in the Energy

Drinks Industry
February 5, 2024
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The world needs energy. Demand for energy drinks has been sustained by the universal
consumer need to be productive, even when faced with the impact of rising inflation on
consumer spending. Although the energy drink industry has not been immune to ongoing
economic challenges, such as consumers’ financial concerns, which incidentally have led to
over half of UK drinkers reducing their energy drink purchases, the global energy drinks
industry continues to grow. Leading brands like Red Bull and Monster enjoy consistently
strong revenues in global markets. Additionally, the market’s value growth is mirrored in
volume, Mintel’s GNPD data shows that the number of energy drinks in the market has
increased by 20.8% since 2021.

The market is forecast to continue growing, but that doesn’t mean that consumers are happy
with the same old energy drinks. Consumer demands and priorities have changed in the years
since the COVID-19 pandemic, and as a result, the industry has had to diversify to cater for
different consumer needs. These days, consumers want energy drinks to provide more than
just a pick-me-up. In this article, Mintel examines how evolving consumer demands have
affected the global energy drinks industry over the past three years.

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2021: An Emerging Focus on Health
The COVID-19 pandemic had a notable impact on the energy drinks market. Consumers’
energy levels were severely impacted, leading to a high demand for drinks with energy-
boosting properties. Mintel’s market research revealed that in 2021, over half of European
consumers were looking for more ways to energise themselves since the beginning of the
pandemic, and energy drinks were a quick and convenient stimulant. This was a global trend,
and something similar was seen in Brazil, where nearly a quarter of consumers were using
more drinks to give them energy because they were feeling more tired since the COVID-19
outbreak.

The pandemic also presented an innovation opportunity for the global energy drinks market,
as many consumers’ personal priorities shifted towards health and wellness. Alongside
raising energy levels, consumers wanted energy drinks to deliver other functional benefits,
such as enhanced hydration or mental stimulation. A successful example of this was the UK
energy drink brand, Purdey’s, which expanded its range with a bigger focus on mental
stimulation.
Purdey’s expansion in the energy drinks industry focused on mental stimulation. Source:
Purdey’s
2022: Younger Generations and Gaming Culture
The emergence of hybrid beverages looked like a challenge for the energy drinks market at
first, but their increasing popularity was surprisingly beneficial for the industry. The growth
of the hybrid category served as an accessible entry point for certain demographics that the
industry had previously failed to attract, in particular younger women. Brands in the US
found success with hybrids that included coffee or tea, and seltzer energy drinks. This
underlined a broader industry trend that emerged in 2022, with energy drinks brands targeting
specific demographics, or tailoring products to suit the demands and concerns of younger
generations, such as the rise of gaming culture.

Gaming culture has had a wide-ranging influence on energy drinks, shaping product
development, marketing strategies and consumer engagement. In Japan and the United States,
gaming performance drinks like Rogue Energy and G FUEL have been developed to enhance
gaming performance with ingredients like nootropics and essential vitamins, targeting the
core gaming community and engaging with them through social media. Gaming
influencers are shaping Gen Z’s beverage choices through co-branding partnerships, creating
new flavours and products that resonate with their followers.

Targeting Gen Z consumers has also provided another lucrative opportunity for the energy
drinks market. Gen Zs exhibit a more mindful approach to drinking alcohol when compared
to previous generations, and energy drinks are well-placed to capitalise on the
growing alcohol moderation trend. Energy drinks are seen as an appealing option for
consumers who want to socialise without alcohol, particularly during social occasions.
2023: Natural Ingredients and Sleep Health
Health and wellness trends moved even further into the spotlight in 2023. For many
consumers, one of the key pillars of health and wellbeing is a good night’s sleep. This
presented a challenge for the energy drinks industry, as a focus on sleep health can drive
caffeine moderation. Mintel’s market research found that in Germany, over a third of energy
drink users were limiting their caffeine intake to avoid disrupting sleep. The market began to
see a demand for energy drinks with moderated caffeine content, and this is an area which
still holds potential for energy drinks brands. Moving forward, brands could follow an
example from the coffee category. No Coffee‘s variable caffeine level coffee pack, for
example, provides gradually smaller caffeine boosts to be dosed throughout the working day,
rather than a large dose of caffeine that could disrupt sleep.

The energy drinks industry has seen a growing interest in natural ingredients as consumers
become more health conscious and concerned about artificial additives. Brands are
responding to this demand by innovating and offering products that feature plant-derived
ingredients, which are perceived as healthier alternatives to artificial ones. Globally, botanical
ingredients such as ginseng, ginger, sage, moringa, maca, and kola nuts are being considered
for their energy-boosting properties and potential to offer a natural alternative to caffeine. In
the UK, Tenzing has introduced carbon-neutral energy powder products made purely from
plants and free from artificial ingredients, catering directly to the third of consumers who see
plant-derived ingredients as more appealing than artificial ones. Similarly, in
India, consumers show a preference for Ayurvedic/herbal ingredients over synthetically
processed ones, and brands are adopting clean, natural, and Ayurvedic/herbal positioning.

2024: Looking Ahead with Mintel

Mintel’s forecast for the energy drinks market indicates that the industry is expected to keep
growing. However, brands cannot rely on past successes and still need to innovate and evolve
as the competitive landscape constantly shifts consumer demand. Interestingly, as the user
base of energy drinks grows and diversifies, brands have begun to distance themselves from
an overtly masculine image, which could open the door to even more growth amongst
demographics who had previously slept on the energy drinks industry.

Over the past few years, consumer demands in the energy drinks industry have shifted. An
increased focus on health has resulted in consumers looking for more than a sugary,
caffeinated pick-me-up. More and more consumers want functional drinks that can help them
achieve their health goals, rather than potentially hinder them.