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    Red Bull Summit Offers Energy Drink Insights

    How grocers can better utilize this growing category

    On Friday, Jan. 25, industry members gathered at The Marquette Hotel in Minneapolis, Minn., for this year’s Red Bull Energy Summit, in which a panel of experts presented key insights regarding the state of the energy drink industry, including statistics, projections, and strategies on how to better utilize this growing category.

    Key Insights include:

    Three strategic approaches to marketing energy drinks

    • Product benefit positioning
    • Premium packaging and price
    • Unique marketing and communication

    Five crucial factors driving the energy drink category

    • Ultra-clear positioning – “Energy drinks give you a lift.”
    • High brand loyalty
    • Energy drinks are consumed at all times of the day, which no category other than bottled water can claim
    • Market penetration is slowing but hasn’t peaked
    • Channel growth still remains

    Who consumes energy drinks?

    • Gen Y – 54 percent
    • Gen X – 22 percent
    • Boomers – 24 percent
    • Men – 62 percent
    • Women -- 38 percent

    Usage occasions

    • In 2008, energy drinks were seen primarily as a “crutch,” used to avoid fatigue while driving, studying or while at work.
    • As of 2011, energy drinks were seen primarily as an “enabler,” used for improved performance, or to enhance events like gaming, concerts, sports, or social events with friends.

    Growth & Sales

    • Red Bull is available in 165 countries and has sold 14.5 billion cans globally – 155 cans per second.
    • The category forecasts an 86 percent growth rate for the next five years.
    • Innovative draws for the category include size innovation, flavor innovation and hybrid functionality.

    What can grocers do to better utilize the energy drink category?

    According to Senior Category Analyst Josh Wheeler, consumers are 31 percent more likely to buy energy drinks on impulse.

    • For large format operators: Place energy drinks in heavily-shopped areas
    • For small format operators: Place energy drinks in the front of the store – near the register – as well as at the entrance of non-food areas (i.e. electronics)
    • Take advantage of cross-merchandise opportunities by placing energy drinks near snacks, alcoholic beverages, etc.

    Secondary placement of energy drinks can boost purchases and incremental sales.

    • Large formats - by 40 percent
    • Small formats - by 38 percent

    Grocers should consider key factors like shelf set, space and assortment, as well as not overextending promotional placement in an effort to avoid de-valuing the category.

    Presenters at this year's Red Bull Energy Summit included David Reynolds, Director of Key Accounts; Stan Madrid, Director of Marketing; Kaumil Gajrawala, UBS Global Managing Director for Beverages; David Lockwood, Mintel Director of Consulting; Juan Lopez, Culture Marketing Manager; James Ford, Head of US Insights & Category Development; Brian Kuz, Global Head of Category Management; Jennifer Lukas-Bourgeois, Regional Marketing Manager; Melissa Lynn, Brand Marketing Manager; Guy Wootton, Director of Insights; Rick Oberhofer, Director of Category Development; and Josh Wheeler, Senior Category Analyst.

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