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MarketsandMarkets 3
Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
1 INTRODUCTION
1.1 KEY TAKE-AWAYS
Define size and segments of the global sports and energy drinks market
Analyze the market structure by identifying various sub-segments of the global
sports and energy drinks market
Forecast revenue of the global sports and energy drinks market and its various sub-
markets/micro-markets with respect to four main geographies; i.e. North America,
Europe, Asia-Pacific, and Rest of the World (ROW)
Identify major trends, drivers, and restraints of the global sports and energy drinks
market
Strategically analyze each sub-market with respect to individual growth trends and
contribution to the overall market
Analyze opportunities in the market for the stakeholders by identifying high-growth
segments of the global sports and energy drinks market
Identify and profile key players in the global sports and energy drinks market
Track and analyze competitive developments such as new product developments,
partnerships, mergers and acquisitions in the global sports and energy drinks market
1.2 REPORT DESCRIPTION
The sports drinks, energy drinks, and nutraceutical drinks form a part of functional drinks;
which come under soft drinks. Sports drinks and energy drinks are very different beverage
choices that should be assessed and marketed differently and hence are described separately
in the report. Sports and energy drinks differ in their functionality as well. Sports drinks are
meant to replenish the fluid lost during exercise or any physical activity whereas energy drinks
are to give you a boost of energy. The report provides full analysis of the world's leading
energy drinks’ market, with clear insight and market commentary on the main developments
MarketsandMarkets 4
Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
and trends. Also included is a chronology of developments by region, ensuring coverage of the
latest energy drink developments.
With the huge market potential and the growing preference, the market is likely to witness
considerable growth in the years to come. The market is anticipated to continue penetrating
the untapped markets and older population. The growth of the market is also largely attributed
to the developments such as the incorporation of the organic and natural ingredients. The
varieties of sports and energy drinks containing organic or natural ingredients are increasing
continually at present.
1.3 MARKETS COVERED
This report focuses on global sports and energy drinks market. This research categorizes the
global sports and energy drinks market on the basis of types, end-users, ingredients,
geography, top brands, and distribution channel:
On the basis of geography:
North America
Europe
Asia-Pacific
ROW
On the basis of top brands:
Sports drinks
Gatorade
Powerade
Others
Energy drinks
Red Bull
Others
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
On the basis of distribution channel:
Off-premise (Off trade)
Convenience stores
Supermarkets/hypermarkets
Mass merchandisers
Drug stores
Others
On-premise (On-trade)
Food service/sports nutrition chain
Vending
Others
1.4 STAKEHOLDERS
Sports and energy drink ingredients’ manufacturers/suppliers
Pharmaceutical companies
Sports and energy drink manufacturers
Sports and energy drink retailers and distributors
Research and consulting firms
1.5 RESEARCH METHODOLOGY
The basic market information was collected through secondary research from government
websites, companies’ websites and news releases; and from worldwide soft drinks associations’
websites such as U.S.-based International Council of Beverage Associations (ICBA),
Switzerland-based International Food and Beverage Alliance (IFBA), and other government
and non-government information sources. Moreover, we have used various secondary sources
such as encyclopedia, directories, and databases to identify and collect information useful for
MarketsandMarkets 6
Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
this extensive, technical, and commercial study of sports and energy drinks. No primary
research has been done for this report.
1.5.1 MARKET SIZE
A top-down approach was used to estimate the market sizes of sports and energy drinks. The
research methodology used to calculate market size also includes the following details:
The key players in the sports and energy drinks market were identified through
secondary research and their market revenue was determined through secondary
research. It includes study of the annual reports of top market players.
The size of sports and energy drinks market was derived from the aggregation of
market shares of the major players and forecast is based on an analysis of market
trends such as pricing and consumption. The penetration of micro-markets was
established through secondary sources.
The geographical split is determined using secondary sources. It is based on various
parameters such as number of players in a particular region and the extent of
research activity occurring in that geography.
1.5.2 COMPANIES COVERED DURING SECONDARY
Beverage Marketing Corporation (U.S.)
American Beverages Association (U.S.)
The Beverage Network (U.S.)
American Dietetic Association (U.S.)
Japan Soft Drinks Association (Japan)
British Soft Drinks Association (U.K.)
Gatorade Sports Science Institute (U.S.)
China Soft Drinks Industry Association (China)
Canadian Beverage Association (Canada)
Factiva database
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
OneSource database
Company’s annual reports and press releases
Various soft drinks/beverages magazines
1.5.3 ASSUMPTIONS
All U.S.D. exchange rates are as of 2010.
Inflation is not the part of pricing and price has been kept constant throughout the
year for calculating market size in both volume and value.
Prices have been assumed to be constant across the globe.
The numbers may not match up due to rounding off at subsequent levels.
All major top brands are only considered and potential brands may not be covered
completely.
1.5.4 KEY DATA POINTS TAKEN FROM SECONDARY SOURCES
Past and future growth trends
Geographical segmentation and their respective growth rate
Market share of different applications and their growth rates
Developments for new ingredients
Key factors affecting the market
1.5.5 KEY QUESTIONS ANSWERED
What are market estimates and forecasts, in terms of volumes and revenue for
sports and energy drinks market?
What and where are the opportunities?
What factors are driving market growth?
Which are the key playing fields and winning-edge imperatives?
What are the competitive landscapes?
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
Who are the main players in the sports and energy drinks market; what are their
strategic directives, operational strengths? Who is doing what?
What is the market demand for sports and energy drinks by various types and end-
users?
What is the market size and forecast for different geographies; i.e. North America,
Asia-Pacific, and Europe?
What are the potential ingredients for sports and energy drinks?
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
2 EXECUTIVE SUMMARY
The global market for energy drinks has grown exponentially in the last few years and young
adults are the primary targets of the industry. Now there are hundreds of sports and energy
drinks available in the global market. The market was well-established in 2010 and is expected
to grow rapidly. The global market of sports and energy drinks is dominated by few major
companies such as PepsiCo Inc. (U.S.), Coca-Cola Company (U.S.), and Red Bull GmbH
(Germany) with exception of few regional markets such as U.K., which are dominated by
regional player such as Glaceau (U.S.). At present, youngsters are the main target customers
of the sports and energy drinks. However, the customer base is expected to widen to adults
including women and children.
TABLE 1
SPORTS & ENERGY DRINKS MARKET VOLUME, BY GEOGRAPHY,
2009 – 2016 (MILLION LITERS)
Region 2009 2010 2011 2016 CAGR%
(2011-2016)
North America XX XX XX XX XX
Asia-Pacific XX XX XX XX XX
Europe XX XX XX XX XX
Rest of the World XX XX XX XX XX
Total XX XX XX XX XX
Source: MarketsandMarkets
In the global market for retail drinks, sports and energy drinks are amongst the fastest
growing ones in the world. Sales of sports and energy drinks worth more than $XX billion were
recorded in 2010. The global market volume for sports and energy drinks is expected to grow
at a CAGR of more than XX% every year. The volume of the market was more than XX billion
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
liters in 2010 and is expected to cross XX billion liters by 2016. The largest share is contributed
by North America with over XX% followed by Asia-Pacific with over XX%. Europe is expected
to show a rapid growth amongst the geographies. Several markets are dominated by regional
players, but “Red Bull” and “Gatorade” are the undisputed market leaders in energy and sports
drinks respectively. The global market for sports and energy drinks is expected to cross $XX
billion in value by 2016.
Sports and energy drinks are mostly sold through different retail formats such as convenience
stores, supermarkets, and hypermarkets; followed by mass merchandisers and drug stores.
The upcoming trend becoming popular is vending machines with XX% share in the global
sports and energy drinks distribution channel.
2.1 DRIVERS
TABLE 2
IMPACT ANALYSIS OF GROWTH DRIVERS
Driver 2011-12 2013-14 2015-16
Making drinks more functional Medium High High
Health concerns and physical well-being Medium High High
Smart marketing and intelligent positioning Medium High High
Packaging innovations Medium High High
Source: MarketsandMarkets
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
2.1.1 MAKING DRINKS MORE FUNCTIONAL
Sports and energy drinks manufacturers are contributing with new developments in energy
drinks through new flavors, and by indulging consumers in daily consumption. Re-introduction
of decadent flavors such as chocolate and fruit flavors may help brands in increasing the
functionality and to augment the indulgence of more consumers towards sports and energy
drinks. Increasing the functionality of new age beverages to target health-conscious people
would be a future trend for sports and energy drink manufacturers.
Sports and energy drinks can be made more functional in order to provide the following
benefits:
Energy
Muscle relaxation
Replenish of salt levels
Anti-aging properties
Anti-oxidation
Blood circulation
Alertness
Virility and potency
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
2.2 RESTRAINTS
TABLE 3
IMPACT ANALYSIS OF GROWTH RESTRAINTS
Restraints 2011-12 2013-14 2015-16
Ageing demography Low Medium High
High product prices Low High High
Source: MarketsandMarkets
2.2.1 AGING DEMOGRAPHY
Economically, aging population will have an impact on economic growth, savings, investment,
consumption, and lifestyle. Socially, aging population affects health and healthcare. Japan,
Singapore, Colombia, Brazil, Thailand, Sri Lanka, Tunisia, Jamaica, China, and Chile are
amongst the countries that are aging fast. That means their XX+ population rate will be
doubled by 2025.
Global older population is increasing by XX% every year, faster than the population as a whole.
Increase in the proportion of older persons (XX+) comes with decline in the proportion of the
young persons (below XX). By 2050, the number of older persons in the world will exceed the
number of youngsters for the first time in history. Certain developed regions already have
witnessed this reversal trend in 1998.
United Nations reported that the proportion of older persons is projected to reach XX% in 2050
from XX% in 2000. More than half of the world’s XX+ population lives in six countries: China,
the United States, India, Japan, Germany, and Russia. XX+ population of the world is
projected to increase by XX% between 2005 and 2030. Nearly XX% of all the older Japanese
are expected to be at least XX years old by 2030. While Japan’s total population is projected to
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
decrease by XX million, the population age “XX+” is projected to increase by XX million
between 2006 and 2030. Russia’s and Japan’s population is expected to fall by XX% and XX%
respectively as these two countries witness low fertility rates.
2.3 OPPORTUNITIES
2.3.1 RISING DEMAND FROM EMERGING COUNTRIES
Emerging or developing countries such as China and India prove to be the best new markets
for sports and energy drinks. New geographies need to be tapped with favorable strategies for
that particular market. Local players in this segment have already captured the existing
market but again there is a scope for big players (due to their brand image) to invest in lesser
known territories such as South East Asian countries. Brand value of big players helps them to
augment their sales by entering newer areas. Distribution channels have to be strong enough
to cater to the wide-spread market of such drinks. Huge investments have to be made on
marketing and advertising such drinks.
Introducing old product to a new market would always be better than new product to new
market. Proven and popular brands usually do well in new markets. Certain countries in Latin
America such as Brazil are having great sales potential for such beverages. Making these
beverages more visible and accessible would help in penetrating the market to a greater
extent. That means these products should be made available at as many channels as possible.
Many manufacturers have the capability to penetrate this market successfully, as there would
be little requirement to invest in new equipment or adapt to the company's business model. An
entirely new company could enter the market on a small scale and operate a single integrated
retail outlet, particularly with energy drinks. However, to appeal to the mass-consumer
market, a company would need to be reasonably large, in order to obtain scale economies in
production. Brand building would also be a requirement if new companies want to succeed in
these emerging markets.
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
2.4 INTRODUCTION
Sports and energy drinks market is increasingly growing hence consumers and businessmen
have started showing interest in this market. Energy drinks market has increased because
people are working almost XX hours a day and hence an energy source is required. Hence
people made energy drinks a part of their life relying on energy from energy drinks, ultimately
contributing to the growing demand in the energy drinks market. Market players are concerned
with improving their ingredients and contents for extra stamina to work without experiencing
fatigue.
TABLE 4
COMPARISON BETWEEN SPORTS DRINKS & ENERGY DRINKS
Particular Sports drinks Energy drinks
Common brand
names Gatorade, Powerade Red Bull, Full Throttle, Monster Energy
Purpose To rehydrate the body after
intense exercise
To rapidly increase energy, endurance,
and performance
Ingredients Glucose, electrolytes Caffeine, sugar, other substances (e.g.
taurine, glucuronolactone)
Effects
Replaces lost electrolytes and
carbohydrates during sustained
strenuous exercise; prevents
dehydration
Temporarily increases heart and
respiratory rates and blood pressure; not
designed to hydrate the body, so
dehydration is possible
Source: MarketsandMarkets
Sports and energy drinks entered the market with striking brand names, attractive slogans,
and expensive marketing campaigns and currently hold a significant portion of soft drinks
industry. They are available in convenience and grocery stores and are also offered alongside
soft drinks in vending machines. Sports and energy drinks are meant to supply mental and
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
physical stimulation for a short period of time. Energy drinks are consumed for different
reasons such as to boost energy, reduce thirst, to mix with cocktails, and as flavoring
smoothies.
Energy drinks have managed to maintain their popularity inspite of high caffeine content. Many
customers are paying higher price due to their benefits. Sports drinks provide carbohydrates
and electrolytes.
Today consumers know the need to rehydrate during exercise, but there was a time when
drinking water during exercise was thought to bring muscle cramps in the body. Sports drinks
are usually a mix of water, sodium, sugar, potassium, phosphate, and lemon juice which
provides a tasty and non-carbonated drink. A sports drink helps to reduce the risk of water
intoxication where electrolytes (sodium and potassium) are depleted but only water is
replaced. The carbohydrates supply fuel to the muscles during exercise. Sodium (the main
electrolyte) improves the rate of fluid replacement. The addition of protein is beneficial to
prevent muscle damage and improves performance.
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
2.5 OVERVIEW
Sports and energy drinks show well-defined consumption patterns due to its proven health and
nutritional benefits and rising fitness-freaky consumers. The main reason for the increasing
popularity of sports drinks is the long-term health implications and ease of use offered
together with packaging innovations. The worldwide economic recession affected demand of
sports and energy drinks in late 2007, with consumption patterns showing signs of distress.
The continued fall in rate of employment, reducing disposable incomes, decreasing household
wealth, and sharply dropping per capita spends, have together caused a loss in sales from the
previous levels.
Sports and energy drinks are high priced premium functional beverages market witnessing rich
growth over the last decade. The United States continues to be the largest market, followed by
Europe and Japan. Collectively, they account more than XX% of the global market. The U.S.
sports drinks market is mature while the energy drinks segment is expected to grow at a
strong rate. The European market is expected to grow at a healthy pace. U.K. and Germany
are the largest regional markets. France is the fastest growing market. Japan is projected to
see less moderate growth. The desire to lead healthy lives and the importance given to
physical fitness is a major growth driver of this segment. Sports drinks are driven by unique
product concepts, new brands, flavors, and brand extensions of popular products. This
performance beverage market is now positioned as a sophisticated specialist segment of the
sports nutrition market for professional athletes and body builders.
MarketsandMarkets 17
Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
FIGURE 1
SPORTS & ENERGY DRINKS MARKET, BY GEOGRAPHY, 2011
XX%
XX%
XX%
XX%
North Amer
Asia-Pacif ic
Europe
ROW
XXXXX
XXXXX
XXXXX
XXXXX
Source: MarketsandMarkets
Key players in this segment are Pepsi, Coca-Cola, Danone, Hansen’s Beverage Company,
Monarch Beverage Company, Red Bull, Dark Dog, GlaxoSmithKline, Extreme Beverages,
Taisho Pharmaceuticals and Otsuka Pharmaceuticals. In terms of market share, “Gatorade’’
and “Red Bull” lead the sports and energy drinks segments, respectively. The Japanese market
is dominated by regional players such as Taisho — the pioneering developer of Lipovitan
brand, Otsuka Pharmaceuticals and others.
Sports and energy drinks represent the largest market for sports and fitness nutrition. Energy
drinks that are targeted at low-income consumers suffered a slowdown. Future growth in
consumption will be concentrated in emerging markets, such as China, India, and Latin
America. The burgeoning middle-class consumers in these countries show willingness to spend
on health and wellness, and are keen to adopt Western lifestyles.
Branding activities from the major players has led to the emergence of new products offering a
greater range and variety of health benefits. Health and fitness is a major driver of this
industry. To widen the consumer base, manufacturers have also been developing products
aimed specifically towards women and children. Growth in this market will primarily be driven
by rising emphasis on health and wellness, improving income levels, rising tendency to spend,
speedy product innovations, and the adoption of westernization across Asian countries.
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
2.6 INTRODUCTION
Energy drinks are the most dynamic segment of soft drinks and remain niche in the soft drinks
category. Red Bull is the global market leader in energy drinks, but its share is being
decreased because of diversification of the category and rapid increase in number of other
brands. However, Red Bull has recently announced their plans to enter into the Chinese
market by 2012. Beverage industry has witnessed energy drinks becoming the fastest growing
sector over the last decade. Also, the number of new products launch with new and innovative
ingredients is on the rise.
Earlier, the energy drinks market took a highly conventional approach for new products
launched across the world. In most parts of the world, new products adopted a ‘me-too’
approach, following closely in the footsteps of the market leader. The most common
positioning strategy of energy drinks was to provide a mental boost, helping the consumer to
fight exhaustion. With caffeine and taurine as the key ingredients, other ingredients also
became standardized and synthesized. Other prominent ingredients are vitamins (A to E),
specifically vitamin B. Vitamins help to increase metabolic rates and the promotion of cell
growth and division in the body. Due to this, target audience for energy drinks became young
males.
However, the manufacturers have adopted a softer approach to the positioning, formulation,
and marketing of energy drinks rather than prescriptive approach. This shift has helped brands
to distinguish among others, but increasingly in response to consumer demand for
alternatives. This demand has come from the dislike for the highly sugared, over sweetened
taste that became the trademark for energy drinks and a growing dislike to products that were
laden with highly synthesized, but stimulating ingredients. Energy drink consumers are
choosing products which do not lead to the ‘crash’.
MarketsandMarkets 19
Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
3 COMPANY PROFILES
3.1 ABBOTT NUTRITION INC
625, Cleveland Avenue
Columbus
OH 43215-1724
U.S.
Tel: 1-614-6247-677
Fax: 1-614-6246-057
Website: www.abbottnutrition.com
3.1.1 OVERVIEW
Founded in 1903, Abbott Nutrition is a subsidiary of Abbott Laboratories and headquartered at
Columbus, Ohio, U.S. The company is engaged in research, development, and marketing of
innovative nutrition and related healthcare products that facilitate growth, health, and wellness
of people of all ages. The company offers its products in several countries across the globe
including U.S., U.K., Japan, Germany, France, Spain, Italy, and The Netherlands. They
employed XX people worldwide as of December 2010.
3.1.2 FINANCIALS
The company reported overall revenue of $XX million in 2010, an increase of XX% over 2009.
The company reported revenue of $XX million for the nutritional segment in 2010, an increase
of XX% over 2009.
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
TABLE 5
ABBOTT NUTRITION INC: REVENUE GROWTH, BY PRODUCT GROUPS,
2009 – 2010 ($MILLION)
Product group 2009 2010 % Change
U.S. Adult Nutritionals XX XX XX
International Adult Nutritionals XX XX XX
Source: MarketsandMarkets
3.1.3 PRODUCTS & SERVICES
Abbott Nutrition offer products in pediatric, adult, and healthy living nutritional services under
the brands such as “Similac” in infant formulae, “PediaSure” and “Pedialyte” for children,
“Ensure” and “ZonePerfect” for active adults, “EAS” for elite athletes and fitness enthusiasts,
“Glucerna” for people with diabetes. EAS is specialized within the sports nutrition category with
“Myoplex Lite Powder”, “Myoplex Lite”, “Myoplex Original Powder”, “Myoplex Original”,
“Myoplex Strength Formula”, “Pro Science ARMOR”, “Pro Science CLA”, “Pro Science
CREATINE”, “Pro Science FINISH Powder”, “Pro Science FINISH”, “Pro Science HMB”, “Pro
Science L-GLUTAMINE”, “Pro Science PUSH”, “Pro Science RELOAD” to meet the unique
nutritional needs of athletes, along with ZonePerfect all-natural nutrition bars for busy, active
lifestyles.
3.1.4 STRATEGY
Abbott Nutrition focuses on enhancing their offering within the sports nutrition category. The
company intends to intensify the penetration within the emerging markets such as China,
Southeast Asia, and Latin America.
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Global Sports & Energy Drinks Market By Types, Ingredients, Distribution Channels, End-users & Top Brands Trends & Forecasts (2011 – 2016)
3.1.5 DEVELOPMENTS
Date Approach Description
September
2011
Product
certification
Abbott Nutrition received certification for all of their “EAS Sports
Nutrition” products as free from all the banned substances. The
company will market its products with a qualified "tested and true"
quality assurance mark on packaging.
September
2010
New product
launch
Abbott Nutrition launched EAS Peak by using PXX technology in the
U.S.
June 2009 New product
launch
Abbott introduced new EAS Myoplex Strength Formula nutrition
shake in the U.S. It is a ready-to-drink sports nutrition drink made
for the active people to refuel or rebuild lean muscles.
Source: MarketsandMarkets