THE METEORIC RISE OF ENERGY DRINKS
$7.1B
$174M (e)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Red Bull Internal Data, IRI, Mintel Article: FT.COM March 20 2012
ENERGY DRINKS
•
Mintel revised its 5 year forecast of Energy drinks from 64% to 86% growth
TTL US ENERGY DRINKS $ SALES AND GROWTH
PROJECTIONS
$14,000
$11.9
B
34%
40%
35%
$12,000
$10,000
$ SALES,
MILLIONS
$7.1
B
25%
$8,000
20%
14%
$6,000
14%
13%
13%
14%
13%
15%
10%
8%
10%
$4,000
5%
$2,000
-1%
0%
$-
-5%
2006
2007
2008
2009
2010
$ Volume
SOURCE: MINTEL ENERGY DRINKS AND SHOTS REPORT JUNE 2012
2011
2012 (F)
% Growth vs YA
2013 (F)
2014 (F)
2015 (F)
2016 (F)
$ GROWTH %
30%
BEVERAGE GROWTH PROJECTIONS •
Energy Drinks are well posi@oned to outpace all other categories through 2016! CATEGORY GROWTH NEXT 5 YEARS TOTAL US
86%
49%
32%
18%
17%
14%
6%
ENERGY
DRINKS
RTD COFFEE
ISOTONICS*
WATER
TEA
JUICE
Source: Mintel Beverage Category Growth Projec@ons are for TTL US (*Isotonics forecasts only available for FDMx and through 2015) CSD
ENERGY DRINKS GROWTH WILL ACCOUNT FOR 50% OF ALL
NON-ALC PACKAGED BEVERAGE GROWTH IN NEXT 5 YEARS
$ Shr Pt Chg 2006 – 2011
6
Energy Drinks
$7,080 b
4
2
Coffee
$8,504 b
0
-30%
-20%
Bottled Water
$6,752 b
-10%
0%
-2
-4
Tea
$4,375 b
Isotonics
$3,477 b
10%
20%
Juice
$15,933 b
30%
40%
50%
60%
70%
2011-2015 % Chg (f)
CSD
$43,118 b
-6
Source: Category size: 2011 Mintel – CSD, Juice, Coffee All Outlet; Energy Drinks, Tea, Isotonics, Water FDMxC. Forecasts based on latest mintel projections at highest
US BEVERAGE CATEGORY FORECASTS Energy is the only beverage categories forecasted to hit double digit growth each year through 2016, while CSD remains rela@vely flat •
MINTEL $ FORECAST, TOTAL US 2011-2016
14%
14%
13%
12%
7%
5%
3%
7%
7%
4%
3%
3%
3%
1%1%
1%
1%
7%
6%
4%
3%3%
6%
6%
4%
1%
1%
14%
13%
3%
3%
6%
6%
4%
1%
13%
3%3%
4%
1%
-2%
2011
2012 (f)
CSD
JUICE
BOTTLED WATER
2013 (f)
COFFEE
2014 (f)
RTD TEA
ISOTONICS*
2015 (f)
ENERGY DRINKS ONLY
SOURCE: Mintel Beverage Category Growth Projections are for TTL US 2011-2016. *Isotonics forecasted for FDMx through 2015
2016 (f)
BEVERAGE GROWTH RATES ENERGY HAS LED TOTAL BEVERAGE
GROWTH OVER THE LAST 5
YEARS…
TOTAL US CATEGORY $ GROWTH RATES
CSD
JUICE
BOTTLED WATER
COFFEE
RTD TEA
ISOTONICS*
ENERGY DRINKS ONLY
40%
35%
34%
30%
25%
20%
15%
8%
10%
14%
14%
2011
2012 (f)
10%
5%
-1%
0%
-5%
-10%
2007
2008
2009
2010
SOURCE: Mintel Beverage Category Growth Projections are for TTL US 2011-2016. *Isotonics forecasted for FDMx
BEVERAGE GROWTH PROJECTIONS …AND IS FORECAST TO GROW DOUBLE
DIGIT FOR THE NEXT 5 YEARS
TOTAL US CATEGORY $ GROWTH FORECASTS
CSD
JUICE
BOTTLED WATER
COFFEE
RTD TEA
ISOTONICS*
ENERGY DRINKS ONLY
16%
14%
14%
13%
13%
2013 (f)
2014 (f)
14%
13%
12%
10%
8%
6%
4%
2%
0%
2012 (f)
2015 (f)
SOURCE: Mintel Beverage Category Growth Projections are for TTL US 2011-2016. *Isotonics forecasted for FDMx and are through 2015
2016 (f)
INDUSTRY EXPERTS AGREE ON ENERGY GROWTH FORECASTS
Euromonitor
ANNUAL GROWTH FORECASTS
14%
13%
10%
9%
9%
Canadean
14%
13%
12%
8%
Mintel
13%
9%
9%
9%
•  All major forecast Think Tanks
predict consistent high growth
for Energy Drinks 2012 - 2016
5%
2%
2012
2013
2014
2015
2016
AVERAGE 5 YEAR GROWTH FORECAST
58%
41%
27%
18%
24%
11%
0%
Energy
CSD
Water
Isotonics
RTD Tea RTD Coffee RTD Juice
SOURCE: MINTEL, CANADEAN, EUROMONITOR FORECAST REPORTS
•  …and all are consistent in
predicting Energy as the fastest
growing beverage segment over
this time period.
THE 5 THINGS THAT WILL DRIVE THIS GROWTH OVER THE NEXT 5 YEARS
Top three are
87% of category
1
BASELINE GROWTH FROM CORE
BRANDS THROUGH IMAGE BASED
MARKETING
2
CONSUMER INSATIABLE NEED FOR
AN ENERGY BOOST
3
UNEMPLOYMENT RATE
IMPROVEMENT
Increase in
disposable income
4
GROWTH OF CORE DEMOGRAPHIC
TARGET, ESPECIALLY HISPANIC
SHOPPERS
16% Hispanic
population growth
5
CATEGORY INNOVATION
SOURCE: MINTEL ENERGY DRINKS AND SHOTS REPORT JUNE 2012
Energy as a
state of mind
108 new
products (2011)
$
DEMOGRAPHIC FACTORS CONTRIBUTING TO GROWTH
UNEMPLOYMENT
•  Key Energy Drink Consumers- teens, Hispanics, and
African Americans- exhibit higher than average
unemployment.
POPULATION GROWTH •  Asians and Hispanics offer growth potential for energy
drinks manufacturers. The Hispanic population is
projected to grow by nearly 16% during 2011-16.
TEENS
ADULTS AGE 18-24
ADULTS AGE 24-34
•  The teen consumer base shrunk from 27% of energy
drink consumer base in 2007 to 16% or energy drink
consumer base in 2011.
•  Energy drinks usage incidence among adults in this age
group remained unchanged during 2007-11
•  Contributed the largest share to consumer growth in the
category
SOURCE: MINTEL ENERGY DRINKS AND SHOTS REPORT JUNE 2012
TOP 5 REASONS FOR DRINKING ENERGY DRINKS
1
2
3
4
For an
energy
boost
To stay
awake
For mental
alertness
For taste
68%
53%
44%
40%
SOURCE: MINTEL ENERGY DRINKS AND SHOTS REPORT JUNE 2012- AS A PERCENTAGE OF USERS
5
For
refreshment
34%
PURCHASE MOTIVATIONS FOR OTHER
CATEGORIES ARE DRAMATICALLY DIFFERENT
COFFEE
ENERGY DRINKS
66%
80%
56%
48%
GIVE ME AN ENERGY RESTORE MY ENERGY
BOOST
55%
WAKE ME UP
WAKE ME UP
I LIKE THE TASTE
CSD
86%
I LIKE THE TASTE
Source: Cheskin A&U, total Pick Me Ups, 2010
72%
70%
70%
TO HAVE
SOMETHING COLD
QUENCH MY
THIRST
GOES WITH MY
FOOD
48%
EASILY AVAILABLE TO
ME
Consumer: Decision Influencers
Variety of beverages is important to two thirds of restaurant-­‐goers, despite the tendency to order the same beverage. Clearly consumers want the op@on of choice. Decision influencers It is important to me that
restaurants offer free refills
It is important to me that
restaurants include a beverage in
combo meals
It is important to me that
restaurants offer a wide variety
of beverages
It is important to me that a
restaurant offers specific
beverage brands
0
20
40
60
80
Level of agreement
Source: MINTEL
100
ENERGY DRINK USAGE AND FREQUENCY
2011
2009
2007
2005
17%
4.52
15%
4.46
•  Adults age 18-24 are twice as
likely as average to drink
Energy Drinks
15%
4.62
•  Adults with children are more
likely to drink Energy Drinks
11%
3.81
% of Adults who
drink Energy
Drinks
How many glasses
of energy drinks did
you have in the past
30 days?
SOURCE: MINTEL ENERGY DRINKS AND SHOTS REPORT JUNE 2012
•  Men are more likely than
women to drink Energy Drinks
THE FACE OF IMMEDIATE CONSUMPTION
BEVERAGE HAS CHANGED DRAMATICALLY IN
THE LAST FEW YEARS AT RETAIL
1
2
3
4
5
6
7
8
9
10
Source: Nielsen L52W FDMxC. Single serve = >1L
SINGLE SERVE BEVERAGE RANKING IN $ FDMC
RED BULL
$1,983,635,262
GATORADE
$1,943,517,518
COCA COLA
$1,899,405,493
MOUNTAIN DEW
$1,747,610,722
MONSTER
$1,694,984,263
PEPSI
$1,299,158,429
DR PEPPER
$918,916,663
POWERADE
$781,120,352
ARIZONA
$748,896,247
STARBUCKS COFFEE
$650,948,611
•
UNIQUE FEATURES OF THE ENERGY
CATEGORY
The Category is BRAND driven, not Flavor Driven.
77%
16%
ORIGINAL/SF
•
FLAVORS
4%
4%
ZERO
ADDL FUNCTION
Purchased throughout the day
60%
After Lunch
47%
In the Morning
31%
31%
In the Evening
With Lunch
At Night
When Socializing
24%
20%
Nielsen G&C Data, through 1st Oct 2011, Mintel Aug 2011 THE ENERGY DRINK CONSUMER IS THE QSR
CONSUMER
% OF
CONSUMERS
WHO SHOP IN
QSR
% OF CONSUMERS
WHO BUY ENERGY
DRINKS
GEN POPULATION
85%
17%
ENERGY DRINKERS
92%
--
--
30%
108
176
QSR SHOPPERS
INDEX
Source: 2012 Simmons Market Survey, 2010 Census.gov
BUT FEW QSRS STOCK
NO ENERGY DRINKS MEANS THAT 1 IN 3 QSR SHOPPERS HAS TO
GO TO A COMPETING ENVIRONMENT TO PURCHASE THEM
ENERGY DRINKS ARE INCREMENTAL PURCHASES
PURCHASE INTENT
INCREMENTALITY
REWARD
81%
Source: 2012 CINT Panel Study
RISK
70%
ENERGY DRINKS REPRESENT A HUGE OPPORTUNITY
FOR QSR!
52,960,000 Energy
Drinkers in the US
Drinking 91 Cans
per year each
92% already go to QSR…
…with 81% purchase intent
for Energy Drinks
11.31 Visit/PP/Mo
Source: 2011 Mintel QSR Report, 2012 CINT Panel Study
If just 10% of their visits
contain an energy drink
@ 70% incrementality
$1B
OPPORTUNITY
?