Cans full of energy
Energy drinks, the powerhouse of the beverage market, are bucking the downward recessionary trend with surging global consumption reaching almost five billion litres in 2011. This has increased from 1.5 billion in 2007 (Zenith International).
As the biggest functional drinks sector in the world (58 per cent value share in 2010), their appeal to the packaging industry is no surprise.
According to the Beverage Industry’s 2012 State of the Industry Report: “For the first time, in the US, energy drinks have outsold bottled water (for the 52 weeks ending 15 April 2012). During that period, energy drinks garnered more than $6.9 billion in sales for a 19.4 per cent increase over the previous year; bottled water saw $6.7 billion in sales for a 3.4 per cent increase.”
Mark Bunker, sector communications manager, Rexam, confirmed that the energy drink sector is one of the “good growth sectors” for Rexam Beverage Can. In Western Europe, the consumption of energy drinks has increased by an average 14 per cent every year from 2006 to 2012, with cans contributing the bulk at over 80 per cent, according to Rexam figures.
New audiences catch on to energy drink appeal
Energy drinks have come a long way since they were initially aimed at men more than women, partygoers, clubbers in their teens and 20s, and people burning the candle at both ends. It soon became clear that many other people desired an energy boost – at different times of the day and night – including exhausted new parents in their 30s, commuters in their 40s and golf players in their 50s.
As well as targeting new consumer demographics, there has been a dramatic regional expansion over the past five years. Bunker at Rexam says: “Energy drink consumption developments in Eastern Europe have been impressive, with an average of 24 per cent growth every year since 2006. The basis has been much lower than in Western Europe but with the stronger growth the gap is closing.
“With the per capita consumption still significantly lower than in Western Europe, Rexam predicts a continuation of strong consumption growth for the next few years.”
Will cans stay strong?
Can use in the soft drinks industry remains on an upward curve, according to Beverage Can Makers Europe (BCME), with shipments rising by three per cent during the first quarter of 2012. The influence of the energy drink category is evident with Austrian and Swiss fillings up by 19 per cent, and there is little sign of an end to the energy drink boom in Europe, confirms BCME.
Austria-based Red Bull, first introduced in the late 1980s, remains the benchmark for energy drinks brands with 4.6 billion cans sold in 2011. Red Bull has managed to defend its position as a leading energy drinks brand despite the rapidly growing market size and influx of competitors to the arena. Its packaging of choice – the tall slimline can – has remained strong with the latest incarnations being introduced at the end of 2012: cranberry, lime and blueberry. Exclusive to 7-Eleven in the US until their nationwide launch in March 2013, Red Bull Special Editions are already available in some European countries, including Germany and the UK.
The US is the largest market for energy drinks with five major brands in fierce competition: Red Bull, Monster, Rockstar, Full Throttle and SoBe No Fear. Energy drink packaging is dominated by metal cans from slimline to larger 500ml variants, with the remainder catered for by plastic bottles. PET bottles continue to erode demand for metal cans for beverage packaging, particularly in beer and soft drinks; however, the energy drink category is linked strongly to cans.
Shelf life of cans
Ross Gourlay, creator of new energy drink Nae Danger, believes cans have become the industry standard, although recognises a trend towards larger 500ml cans. “One of the major benefits is the long shelf life of cans versus PET bottles: in our case 18 months in cans against six months in PET,” says Gourlay. Nae Danger selected Crown Holdings to produce its cans and plans to roll out across the UK and Northern Ireland in 2013 from its initial Scotland launch in 2012.
Brian Turner, president and CEO at Nurish Brands in the US, responsible for Feel Energy Drink, believes the aluminium can will be the de facto packaging option in the energy drink category for the foreseeable future. “Obviously, aluminium cans dominate the energy drink category, so as an emerging brand, launching in an aluminium can added instant consumer recognition of our brand’s intended function.”
Cost was also a factor. “Aluminium cans are still relatively inexpensive (to produce and ship) and they’re recyclable, which is important to today’s consumer. We would have liked to launch in a custom aluminium container, however, as a new brand this wasn’t economically feasible. Down the road, we’ll explore other container options, both aluminium and alternative materials,” says Turner.
Buoyed on by strong growth and global market potential, the energy drinks market has succeeded where other, more mature categories (carbonated soft drinks, for example) have struggled. However, as energy drinks become a saturated market in regions such as North America and West Europe, challenges are starting to rear their ugly heads. The self-titled ‘Killer Energy Brew’, Monster, has been the subject of controversy since a US Food and Drug Administration (FDA) report ‘associated’ the drinks with five deaths since 2007. Although the FDA was keen to point out there was no causal link the damage is already being done. Monster faced a barrage of negative press when the story broke in October 2012 and continues to be hit by a torrent of criticism.
Set this against a background of
ongoing litigation including two Illinois
senators pushing for wider action against the energy drinks market and moves in France to tax energy drinks in the same way as beer, and the market has its fair share of
The future is bright, the future is glowing
Despite the challenges, there are opportunities. Energy drinks are enjoyed by consumers on the go and can be a social drink at festivals, pubs, bars and parties. As such, cans make ideal packaging, as they are lightweight and shatterproof. However, the truly innovative brands will be seeking more enhanced visual appeal to help the product stand out in a saturated market.
Bunker at Rexam says: “For a majority of energy drink brands, the design of the package underpins the whole identity of the brand.” Rexam offers various finishes including thermochromic, UV and glow in the dark inks as well as sparkle and tactile over-varnishes.
US-based energy drinks company HiBall used thermochromic ink by Chromatic Technologies (CTI) on its packaging to help it stand out on the shelf. The graphic design is positioned as an aid for consumers to understand when the drink has reached its optimum temperature. According to the company, the transition from glass bottles to cans was said to be because people do not associate energy drinks with glass.
Image is vital when it comes to creating a product, confirms Bunker. “We know that the functional aspects of the aluminium can and bottle [such as Rexam’s Fusion bottle], combined with graphic potential, will ensure it remains a popular format for energy drink brands.”