U.S. sales of energy shots fell to $1.23 billion in 2014, continuing a decline that began in 2012 to 2013 and will likely go on through at least 2019, when the category is forecast to drop to $1.19 billion, Mintel analysis reveals.
The drop is even more striking when compared to the significant upward trajectory of energy drink sales, which brought in $9.83 billion in 2014 and is anticipated to grow 10.2% in 2015 to $10.8 billion and a whopping $14.98 billion in 2019, according to Mintel.
The sharp discrepancy between sales of energy shot sand drinks can be attributed partly to energy drinks releasing new products, increasing distribution and increasing pricing, which are helping the segment grow, Mintel analyst Elizabeth Sisel told NutraIngredients-USA.
At the same time, she noted, the much smaller energy shot segment is struggling to overcome several, significant sales barriers and consumers’ growing preference for whole foods and beverages rather than supplements.
Improving flavor is pivotal for long-term success
Flavor is the most important factor that consumers say influences their purchase of energy shots – beating out even functionality, according to Mintel data. And with three out of five energy drink and shot users saying energy drinks taste better than shots, there is clearly room for improvement for the more concentrated format, Sisel said.
Many consumers perceive energy shots as tasting medicinal, which could be related to the high concentration of vitamins, herbs and other eye-opening ingredients in shots, said Sisel, who noted that 40% of users said they mix energy shots with other drinks to mask the flavor.
The maker of 5-Hour ENERGY shots, which accounts for 87% of the category sales, tried to put a positive spin on this trend last year when it launched a “Yummification” video contest, in which consumers showcased their favorite recipe featuring a 5-Hour ENERGY shot. The top three winning recipes all featured lemonade or limeade, which aligns with citrus flavored shots being well received by consumers. Coffee flavored shots also are popular, Sisel said.
She encouraged manufacturers to improve flavors of shots as the No. 1 priority for boosting sales, and hinted that their success or failure in this area could make or break the category in the future.
Education about supplement safety needed
Education about the safety of supplements and increased ingredient transparency also could help improve shot sales, suggested Sisel.
She explained that 60% of consumers said they preferred energy products labeled as beverages and not dietary supplements and that 61% do not think of shots as drinks.
These statistics reflected consumers’ increasing desire to get their nutrients from foods and beverages, which they perceive as more balanced and natural, Sisel said. In addition, she noted that consumers increasingly want recognizable ingredients and are turned off by the unfamiliar proprietary ingredients or blends listed on supplement labels.
She also noted that negative stories in the mainstream press about supplements in general have made some consumers hesitant to take supplements, including shots, because they do not trust their safety.
Drinks offer more than energy
Energy shot sales also are suffering because they usually offer only one benefit, whereas energy drinks also offer hydration and many have a better flavor and additional functionality, such as protein, probiotics or fiber, Sisel said.
She suggested the category could see a lift if manufacturers added more benefits to shots than just energy, such as appetite suppression or pain relief. As an example, she pointed to Cardinal Health which offers a First Aid shot line, which adds stomach and hangover relief.
“Shots are not limited to just energy,” Sisel added, noting there could be opportunities in developing SKUs that tout relaxation or clarity, such as Dream Water or Zend.
More effectively target advertising
Energy shots also could improve their sales by more effectively targeting their core users: older millennials and young parents who are shifting into new life stages, said Sisel.
Mintel’s research shows that about 64% of older millennials aged 27 to 37 years consume energy drinks and shots, which is the same as 18- to 26-year-olds. But, older millennials are increasing how often they use the products, and the younger ones are not.
In addition, parents are more likely to consume the products, with 29% of mothers using energy shots compared to 12% of women users who are not moms, and 58% of fathers compared to 26% of men who are not dads, Mintel data shows.
These consumers are more likely to respond to ads that recognize the struggles of parenting using humor, Sisel said. She added Mintel research shows 80% of millennials are more likely to remember funny ads.
Finally, Sisel recommend shots play up their improved sustainability compared to larger drinks. She explained shots use less packaging and require fewer emissions for transportation than drinks, which are messages that resonate well with the core user.