Energy drinks look likely to flood the market

Irish sales of energy and sports drinks are forecast to exceed £100 million (€127 million) this year and the market for such products, ranging from old favourite Lucozade to obscure brands like Lipovitan, has grown by 83 per cent since 1997.

According to a new report from Zenith International, an independent research consultancy which identifies trends in the drinks market, energy and sports drinks now account for 15 per cent of all soft drink sales in Ireland.

The demand for the drinks is clearly lifestyle driven.

The new generation of soft drinks offers a list of benefits ranging from the promise of increased alertness to the more new-age appeal of inner detoxification.

Soft drinks are usually marketed on the basis of taste and image but these drinks stress an added value that is usually based on specific ingredients such as caffeine or a particular herb.

While the traditional soft drink market is easy to classify in that it is dominated by familiar brands such as Coca Cola, 7UP and Club, the new market segment is divided into three sub-sections - refreshment drinks such as Lucozade NRG; sports drinks, dominated by isotonic drinks such as Lucozade Sport; and functional energy drinks such as Red Bull and Purdys.

Much of the market's acceleration has come from the functional energy segment whose value in Ireland has grown from 2 per cent in 1997 to 21 per cent in 1999.

The latest entrant into this category is Kombucha, a herbal tea-based drink with a list of ingredients that includes L casei immunitas.

Up to five years ago it would be difficult to imagine any distributor finding retail shelf space for such a product outside a handful of health food stores but Kombucha has been taken on by branches of the major multiples including Tesco and Superquinn.

"We have already reached our sales and distribution targets for the year," says Ms Melanie Lyons, Kombucha's brand manager.

"The difficulty we have is getting product."

The new drink is distributed in Ireland by Richmond marketing which also distributes Red Bull but the marketing approach for the two brands is very different.

"Not only do people not know the brand they also have no idea what it tastes like," says Ms Lyons.

"So in-store tasting has been our main marketing strategy."

The company has previously tested other brands in this way and sales on the day usually top 25 cases.

Sales for Kombucha directly after tastings range between 100 to 150 cases.

"The market we are going for is 28 plus and mostly female," says Ms Lyons, adding that the audience includes people now ready to graduate from Red Bull.

The market for superfoods is being grown by Nestle's push behind its Actimel range - a functional food marketed for its L casei immunitas ingredient. A growing market means a highly competitive one.

"Kombucha has been available in Austria and Germany for the past two years and looking at their experience we would expect to see at least five other competitors entering the Irish market in the near future," says Ms Lyons.

After the below-the-line promotional activity of the last six months, the company will start a press campaign in September.