The global energy drinks market is projected to witness a CAGR of 9.12 % during the forecast period (2021 - 2026).

After the onset of the COVID-19 pandemic, the fitness clubs and other sporting arenas were shut down in the major part of the world, this move was introduced by the governments so as to limit the spread of the coronavirus, which subsequently affected the sales of energy drinks in the global market in the year 2020. However, the consumers are still clinging on to work-out and engaging in various exercise regime at the comfort of their homes and hence leading to a continued need for energy drinks. Moreover, at the end of the year 2020, many economies removed the strict lockdown measures which resulted in the opening of fitness clubs and sports clubs, thus resulting in the recovery of energy drinks sales.

Increased urbanisation, rising disposable income, and growing health consciousness among consumers increased the demand for non-carbonated drinks. Energy drinks are widely consumed by adolescents, due to their claims of improving performance, endurance, and alertness. At the same time, long and erratic working hours and the increasing occurrence of social gatherings are driving Indian consumers toward the consumption of energy drinks.​

Moreover, growth in the number of health-conscious consumers and increasing consumer awareness regarding active lifestyle, along with growing rates of lifestyle diseases, inspired health-oriented consumers to opt for healthy and sugar-free drinks. The energy drinks market is also projected to grow, due to an increase in promotional and advertisement strategies.

Key Market Trends

Product Innovation is the Key to Increased Consumption

Despite stringent laws and a heavily regulated environment, the market for energy drinks is recording a growth owing to the high level of product innovation by players; this also helps the players address the requirements of consumers.​

Energy drinks are especially popular among college students and corporates, as a substitute for coffee, which helps them stay alert during work. Moreover, these energy drinks are gaining popularity, as they are used as mixers in popular alcoholic drinks.

Energy drinks, such as Rock Star, Monster, and Red Bull, are promoting the image of strength, energy, and speed. The sleek and colourful packaging of energy drinks is attracting consumers, primarily due to the cool and trendy factor. Furthermore, these energy drinks help in balancing the level of taurine, an amino acid, which is naturally found in the body. The level of taurine is expected to decline significantly during extreme physical exertion and high stress. ​

Manufacturers of energy drinks are focusing on expanding their product lines, by introducing new flavors and new categories in order to encourage frequent consumption and drive the market studied.

North America Dominates the Global Energy Drinks Market

The high consumption of energy drinks and the United States massive coffee culture have pushed the notion of energy shots into the mainstream, which is a major factor driving the sales of energy drinks in the country.​

Energy drinks are an integral part of social gatherings, parties, and celebrations in the United States. The manufactures such as Red Bull, Monster Beverages and others are offering their energy drinks in multiple flavors and two major packagings which include PET bottles and cans, providing consumers with a wide range to choose their suitable drinks in terms of both packaging and flavor.​

Furthermore, soda consumption is substantially declining in the country, which in turn has provided a great opportunity for the manufactures such as Coca-Cola and PepsiCo who are trying to leverage the name recognition of their legacy brands by making a bigger dent in the growing energy drink category.​ For instance, in 2019, Coco-Cola announced the launch of its first energy drink under its brand in four varies which includes Coca-Cola Energy, Coca-Cola Energy Zero Sugar, Coca-Cola Coca-Cola Energy Cherry, and Coca-Cola Energy Cherry Zero Sugar.​

Competitive Landscape

The energy drinks market is a competitive market, making it hard for new and small companies to compete. Monster Beverage Corporation, Red Bull, The Coco-Cola Company, Rockstar Inc., and PepsiCo are a few of the many companies with high shares in the energy drinks market. Companies operating in the market are focusing on personalization and convenience, and are also providing healthy, zero-calorie, and low-sugar functional energy drinks, in order, to scale their energy drink production in the region.

Additionally, product launches may help companies tap the huge potential for growth in the developing regions. Most manufacturers create product awareness through advertising and celebrity endorsement. In addition to this, major sports events are sponsored by energy drink manufacturers.

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