Category: Premium Articles

***UPDATE AT END***

Come ‘on….that was kinda witty….no?

This might be the reason $JMBA decided to take control of its Energy Drink from Nestle:

From Food Product Design:

For the first time, energy drinks have outsold bottled water (for the 52 weeks ending April 15 in U.S. supermarkets, drug, gas, convenience and mass merchandise retailers, excluding Walmart, per SymphonyIRI Group). During that period, energy drinks garnered more than $6.9 billion in sales for a 19.4% increase over the previous year; bottled water saw $6.7 billion in sales for a 3.4% increase.

Red Bull remains the top seller in the category, with nearly 40% market share for a total of $2.8 billion in sales. A recent addition to the line is Red Bull Total Zero, a slight reformulation of Red Bull Sugar Free (Total Zero is calorie-free while Sugar Free has 13 calories). In addition to the caloric difference (likely achieved via the addition of sucralose to the sweetener mix), Total Zero has slightly more caffeine (3 mg more in the 8.4-oz. can) and a slightly different flavor.

Both Monster Energy and Rockstar are starting to target the recovery market. Monster Rehab uses a tagline of “refresh, revive, rehydrate,” with one version (Protean) containing 15 grams of protein per can. Rockstar Recovery seeks to provide “energy + hydration” in a low-calorie beverage enhanced with electrolytes.

The Beverage Industry report notes that emerging categories in energy include natural options. Jamba Juice, Campbell’s Soup (via its V8 line) and Starbucks carrying “natural” energy lines.

Energy shots also continue to perform well. That segment is dominated by 5-Hour Energy (Living Essentials, LLC), which captured over 90% of the market. However, more companies, including Monster, with its concentrated 5-oz. M3 product, continue to enter this segment.

Also:

Back in March of this year, Jamba Juice took control of its energy-based retail line from Nestlé USA (its previous formulation partner) and is expanding distribution of the drinks nationally. The “all natural” energy drinks differentiate themselves in the market by remaining very juice-centric. They contain 70% juice in three flavors, strawberry-banana, apple, and pomegranate-blueberry, and get their energy boost from caffeine. These products complement Jamba Juice’s other retail offerings, including smoothie kits and superfruit shots, as well as assorted food items. The company had previously only licensed out its retail offerings, but is now taking the reigns as it delves into more CPG development.

Although these canned beverages are available in retail outlets like convenience and grocery stores, they’re also for sale in the company’s foodservice chain locations. And analysts have pointed out that many fast-food consumers are also energy-drink consumers, suggesting that operators could capitalize on this market synergy by offering more energy drinks. When consumers of energy drinks were surveyed as to whether or not they would buy energy drinks in a quick-service restaurant environment, 81% responded positively.

Juice, as well as tea (tea sales are rising…), will continue to play a big role in the next generation of energy drinks. Green, unroasted coffee beans (with their chlorogenic acid content), a key ingredient in the Starbucks Refreshers line, are also worth looking into. Chlorogenic acid might have a positive impact on weight management, which would be beneficial in a line of energy drinks for women (not that men couldn’t benefit from weight-loss assistance, but it’s a harder sell…). And folks, including on Wall Street, are eating more chia (a hot ingredient all around…) for its energy benefits.

This leads to the need to expand the types of energy drinks available to target wide-ranging demographics. Aging consumers regularly cite a desire to have sufficient energy for the day’s activities. Through judicious ingredient selection—and sound marketing—you could quickly find a new audience for energy drinks there. With active men and women, sports nutrition would be a target (I’m waiting for the arrival of a whole-fruit banana-based sports energy shot after seeing the recent news on the benefits of that fruit…).

Energy drinks will continue to diversify over the long term—and specific groups of consumers are just waiting for a product that speaks to them to regularly get into their shopping carts.

What amazes me is that 5 Hour Energy is the leader with $893M in annual sales. Astounding number….

Could $JMBA produce an “All Natural Energy Shot”? Sure they could. It would be cheap and easy to consume and go perfectly in the C-Store checkout lines. Will they? Hell if I know but the point here is that this category is FAR from mature and there is still amazing growth ahead and $JMBA is right there in the “All Natural” category.

So next I want to know about distribution. They took control from Nestle in the spring but I am not seeing the energy drink pop up in grocery or c-stores around me like I am the smoothie kits or the frozen yogurt. I notice it is out of stock on $AMZN (some third parry sellers have some inventory left) where I used to get it and I am wondering if that is step one to a physical store distribution deal with a $TGT, $WMT or some grocery chains. I am hoping it isn’t because they are running low on inventory…

I would be surprised if that was the case as it would be a very non-White thing to have happen so I am inclined to think perhaps that inventory is being spread around. There is more value for $JMBA selling individual cans vs cases of 12 both in terms of profits and exposure.