Market watch: Sports and energy drinks

WHILE it's true people can’t carry out their usual gym routine, and sports events in most places have come to a halt, but when at home, physical activity including some form of exercise is still recommended to prevent obesity and sluggishness.

The COVID-19 crisis has pushed demand for healthier beverages – consumers stockpile on products that are good for them, easy to prepare, or have long shelf life. Although sports and energy drinks may not be at the top of the shopping list, manufacturers are taking a cue from the health trends – and are enhancing these beverages to give them better appeal.

Formulated to keep the body hydrated during or after exercise and strenuous activities, sports drinks contain carbohydrates, potassium, sodium and chloride, and sugar for energy recovery and better performance.  

The sports drinks market is expected to reach US$ 32.83 billion by 2027, driven not just by the popularity of sport drinks among athletes but by growing health awareness among consumers. This encourages manufacturers to invest in product enhancement, whether it is by adding variety or a change in packaging. As demand for flavoured sports drinks grows on the global market, manufacturers are introducing new product lines with more enticing flavours. Product enhancement is key since even big brands are seeing strong competition from other hydrating beverages.

Sports nutrition guidelines are considered when developing these beverages to give consumers better performance benefits.

Stringent government regulations have also led to the development of clean label products. This is important since consumers now seek natural ingredients including flavours and sweeteners in most beverage products. Stricter regulations have also led to the development of safety practices and in creating transparency between consumers and manufacturers.  

As the so-called sports drinks wars between startups and existing market players escalate, new marketing tactics and innovations are used to target the right segment of consumer’s sports drinks.

One of the key factors restricting the overall sports drink market growth is the unproven claims made by the producers of the sports drink regarding the health benefits of the product.

Some studies have reported the negative effects of sports drinks due to the high sugar content, from tooth decay to behavioural issues.

Due to certain side effects linked with the sports drinks, consumers are inclined toward organic and natural products. This is producing limitation in the development of the market.

On the other hand, manufacture of sports drink using natural elements, for example natural sweeteners, is likely to boost the development of the sports drink industry, by way of providing opening to the companies to increase the price of their goods.

Energy drinks

Energy drinks are categorised under a larger group of energy products like bars and gels. They differ from sports drinks, which are for enhancing sports performance. There are several beverages in the global market which contain caffeine, but not all can be considered an energy drink. Energy drinks differ from soft drinks or other caffeine containing products owing to the taste and health benefits provided.

Since energy drinks contain compounds like caffeine mainly for mental and physical stimulation, they appeal to a growing number of consumers who live hectic lifestyles that require them to spend more hours at work and get less hours of sleep. These drinks also contain amino acids, taurine, and sugar, or other taste-enhancing products like sweeteners. Some energy drinks are carbonated.

The challenges

The global energy drinks market might receive a heavy blow soon due to the competition between energy drinks and other beverages like packaged juice, malted health drinks, and aerated beverages. While energy drinks are in high demand, it’s the high cost that other beverages leverage to take over the market as consumers may consider opportunity over quality.

Also, the rise in awareness regarding the adverse effect of caffeine might foster the decline in the growth of energy drinks over the forecast period. Consumers’ are conscious about the product they consume from the food and beverage industry.

The global energy drinks market size could reach USD 84.70 billion by 2026 growing at a CAGR of 7.3% from 2020 to 2026 according to Polaris Market Research. In spite of the increasing demand, current evidence for efficacy, performance and safety is often contradictory and unsystematic, and the primary concern of these beverages is that most of the product categories offered contain high caffeine concentrations.

These products experience several different traction types from many demographics, such as the Hispanics and age group between 18 - 35 are deeply inclined for these products whereas the millennial consumers opt for regular use of these beverages. In the next decades, demand for energy drinks will be at its peak as these two consumer groups have been rising tremendously.

Sources:

https://www.absolutemarketsinsights.com

https://www.futuremarketinsights.com/reports/us-energy-drinks-market

https://www.polarismarketresearch.com/industry-analysis/energy-drink-market