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Sports and Energy Drinks - UK - August 2016

“Sugar continues to be an issue in the market and the upcoming sugar tax in 2018 is expected to have an adverse effect on volume sales. 52% of users would cut back or stop drinking sugary sports and energy drinks if the price went up. However, 37% of the users who said that they’d reduce consumption would switch to low/no-sugar versions, offering an ongoing incentive for companies to innovate in this area as a way to keep consumers buying into the category.”
– Amy Price, Senior Food and Drink Analyst

This report examines the following issues:

  • The sugar tax provides a challenge and an opportunity
  • The trend for category blurring opens the market up to a wider audience
  • Low-caffeine energy drinks could provide an alternative solution

This Report focuses on RTD (ready-to-drink) sports and energy drinks through both the retail and on-trade channels.

Sports drinks are drinks claiming to improve sporting performance or to speed up recovery. Most of these are labelled isotonic/hypotonic and claim to rehydrate and replenish nutrients after exercise. Examples include Lucozade Sport, Powerade and Gatorade.

Sports drinks are divided into three major types:

    • Isotonic drinks: These have the same osmolality as that in the body, and are designed to aid rehydration, as they are said to be readily absorbed into the blood. Most sports drinks are isotonic, including Powerade and Lucozade Sport.
    • Hypotonic drinks: These have a lower osmolality than body fluid and are said to be absorbed faster than isotonic drinks and faster than water into the blood.
    • Hypertonic drinks: These have a higher osmolality than body fluids and are designed to be taken after exercise to replace electrolytes, aid recovery and provide an energy boost.

Energy drinks are drinks that specifically claim to provide an energy or stimulant boost, supporting mental alertness and/or physical performance. These generally include active ingredients such as glucose, caffeine or taurine, and may include other ingredients positioned as beneficial to health, such as ginseng and various vitamins and minerals.

The energy drinks market divides itself into three distinct categories:

    • Refreshment energy drinks provide physical energy through glucose or a range of sugars, as in Lucozade Original Energy.
    • Stimulant drinks are designed to stimulate both mind and body, and typically claim to improve concentration, reaction time and endurance. Stimulant drinks typically contain active ingredients such as caffeine and taurine, and are non-alcoholic. The best-known example is Red Bull.
    • Energy shots refers to what are usually more concentrated versions of refreshment/stimulant drinks, ie they typically retail in a 50ml bottle rather than in a can of between 250ml and 500ml.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Growth set to slow in 2016
              • Figure 1: Forecast of UK sales of sports and energy drinks, by value, 2011-21
            • Impending sugar tax increases spotlight on the ingredient
              • Drop in 16-24 males poses a threat to the market
                • Companies and brands
                  • Lucozade’s dominance continues
                    • Energy drinks lead by NPD and adspend
                      • The consumer
                        • Around half of UK adults drink sports and energy drinks, rising to 80% of young men
                          • Figure 2: Usage of sports and energy drinks, by gender and age, June 2016
                        • Sports drinks and energy drinks need to re-enforce product claims
                          • Figure 3: Reasons to drink selected non-alcoholic drinks, June 2016
                        • Branded variants are the most popular and drunk the most frequently
                          • Figure 4: Frequency of usage of sports and energy drinks, June 2016
                        • Blurring the lines between categories – interest in water
                          • Figure 5: Interest in selected ingredients to be included in sports and energy drinks, June 2016
                        • Sugar concerns affect sports and energy drinks
                          • Figure 6: Attitudes towards sports and energy drinks, June 2016
                        • Almost two in five would not change their habits following sugar tax
                          • Figure 7: Effects of the sugar tax on sports and energy drinkers' behaviour, June 2016
                        • What we think
                        • Issues and Insights

                          • The sugar tax provides a challenge and an opportunity
                            • The facts
                              • The implications
                                • The trend for category blurring opens the market up to a wider audience
                                  • The facts
                                    • The implications
                                      • Low-caffeine energy drinks could provide an alternative solution
                                        • The facts
                                          • The implications
                                          • The Market – What You Need to Know

                                            • Growth set to slow in 2016
                                              • Sports drinks continue to struggle
                                                • Energy drinks prop up the market but see sales plateau
                                                  • Impending sugar tax increases spotlight on the ingredient
                                                    • Drop in 16-24 males poses a threat to the market
                                                    • Market Size and Forecast and Market Segmentation

                                                      • Growth set to slow in 2016
                                                        • Figure 8: Total UK volume and value sales of sports and energy drinks, 2011-21
                                                        • Figure 9: Forecast of UK sales of sports and energy drinks, by value, 2011-21
                                                        • Figure 10: Forecast of UK sales of sports and energy drinks, by volume, 2011-21
                                                      • Sports drinks continue to struggle
                                                        • Figure 11: UK volume and value sales of sports drinks, 2011-21
                                                        • Figure 12: Forecast of UK sales of sports drinks, by value, 2011-21
                                                        • Figure 13: Forecast of UK sales of sports drinks, by volume, 2011-21
                                                      • Energy drinks prop up the market but see sales plateau
                                                        • Figure 14: UK volume and value sales of energy drinks, 2011-21
                                                        • Figure 15: Forecast of UK sales of energy drinks, by value, 2011-21
                                                        • Figure 16: Forecast of UK sales of energy drinks, by volume, 2011-21
                                                      • Forecast methodology
                                                      • Market Drivers

                                                        • Impending sugar tax increases spotlight on the ingredient
                                                          • Local government names and shames drinks through health warning
                                                            • European Parliament vetoes caffeine claims, citing sugar content as a reason
                                                              • Drop in 16-24 males poses a threat to the market
                                                                • Figure 17: Trends in the age structure of the UK male population, 2011-21
                                                              • Half of adults exercise at least twice a week
                                                              • Key Players – What You Need to Know

                                                                • Lucozade’s sports drinks dominance continues
                                                                  • Lucozade leads the energy market, followed by Red Bull
                                                                    • Energy drinks lead by NPD
                                                                      • Energy drinks dominate spend
                                                                      • Market Share

                                                                        • Lucozade’s sports drinks dominance continues
                                                                          • Figure 18: UK retail sales of leading brands in sports drinks, by value and volume, 2014/15* and 2015/16**
                                                                        • Lucozade leads the energy market, reporting strong volumes
                                                                          • Red Bull grows value and volumes by more than 6%
                                                                            • Challenger brands look to innovation to drive engagement
                                                                              • Figure 19: UK retail sales of leading brands in energy drinks, by value and volume, 2014/15* and 2015/16**
                                                                              • Figure 20: UK retail sales of leading manufacturers in energy drinks, by value and volume, 2014/15* and 2015/16**
                                                                          • Launch Activity and Innovation

                                                                            • Energy drinks lead by NPD
                                                                              • Figure 21: Share of new product launches within the UK sports and energy drinks market, by sub-category, 2012-16
                                                                            • Packaging pushes convenience
                                                                              • Health remains an issue
                                                                                • L/N/R sugar and calorie claims rise in 2016
                                                                                  • Figure 22: Share of new product launches within the UK sports and energy drinks market, by L/N/R sugar and calories, 2012-16
                                                                                • Lucozade launches Zero
                                                                                  • Monster goes sugar-free
                                                                                    • Stevia provides an alternative to sugar
                                                                                      • A natural proposition should appeal to those looking to holistic health
                                                                                        • Organic claims rise in 2016
                                                                                          • Flavour remains a way to offer newness
                                                                                            • Tropical flavours continue to draw attention…
                                                                                              • …as well as ‘punch’ flavours
                                                                                                • Category blurring continues in the global market
                                                                                                  • Monster looks into ‘super soda’ and hydration
                                                                                                    • CSD and water brands explore high-caffeine variants
                                                                                                      • Coffee and tea provide competition
                                                                                                        • Milk used as an ingredient in energy drinks
                                                                                                        • Advertising and Marketing Activity

                                                                                                          • Energy drinks dominate spend
                                                                                                            • Figure 23: Total above-the line, online display and direct mail advertising expenditure on sports and energy drinks by the leading operators, 2012-16
                                                                                                          • Lucozade continues to push the Find Your Flow campaign
                                                                                                            • Supported by social media
                                                                                                              • Catering to the health-conscious with Zero
                                                                                                                • Inspiring sports participation through Summer of Movement sponsorship campaign
                                                                                                                  • Red Bull and Relentless focus on music…
                                                                                                                    • …and gaming
                                                                                                                      • Nielsen Ad Intel coverage
                                                                                                                      • The Consumer – What You Need to Know

                                                                                                                        • Sports drinks and energy drinks are seen to not deliver on claims
                                                                                                                          • Around half of UK adults drink sports and energy drinks, especially young men
                                                                                                                            • Branded variants are the most popular and drunk the most frequently
                                                                                                                              • Blurring the lines between categories – interest in water
                                                                                                                                • Sugar concerns affect sports and energy drinks
                                                                                                                                  • Almost two in five would not change their habits following sugar tax
                                                                                                                                  • Reasons to Drink Non-Alcoholic Drinks

                                                                                                                                    • Sports drinks and energy drinks are seen to not deliver on claims
                                                                                                                                      • Rehydration is top reason to use sports drinks
                                                                                                                                        • Energy drinks retain pick-me-up connotation
                                                                                                                                          • Figure 24: Reasons to drink selected non-alcoholic drinks, June 2016
                                                                                                                                      • Usage of Sports and Energy Drinks

                                                                                                                                        • Around half of UK adults drink sports and energy drinks, especially young men
                                                                                                                                            • Figure 25: Usage of sports and energy drinks, by gender and age, June 2016
                                                                                                                                          • Branded variants are the most popular and drunk the most frequently
                                                                                                                                              • Figure 26: Frequency of usage of sports and energy drinks, June 2016
                                                                                                                                            • Standard variants are most popular
                                                                                                                                              • Figure 27: Usage of sports and energy drinks, by type, June 2016
                                                                                                                                            • L/N/R formats attract women and the over-45s
                                                                                                                                              • Limited crossover across standard and L/N/R versions
                                                                                                                                                • Figure 28: Crossover in usage of sports and energy drinks, by type, June 2016
                                                                                                                                            • Ingredient Enticements

                                                                                                                                              • Blurring the lines between categories – interest in water
                                                                                                                                                • Tea and juice can play a role in sports and energy drinks
                                                                                                                                                  • Figure 29: Interest in selected ingredients to be included in sports and energy drinks, June 2016
                                                                                                                                              • Attitudes towards Sports and Energy Drinks

                                                                                                                                                • Sugar concerns affect sports and energy drinks
                                                                                                                                                  • Alternative sources of sweetness appeal
                                                                                                                                                    • Figure 30: Attitudes towards sports and energy drinks, June 2016
                                                                                                                                                  • Origin of ingredients interests 37%
                                                                                                                                                    • Low-caffeine formats appeal to 38% of sports/energy drinks users
                                                                                                                                                      • Herbal/botanical flavours enjoy a better-for-you image
                                                                                                                                                        • Minority demand for more sports and energy drinks at foodservice outlets
                                                                                                                                                        • Effects of the Sugar Tax on Sports and Energy Drinks Users' Behaviour

                                                                                                                                                          • Almost two in five would not change their habits following sugar tax
                                                                                                                                                            • Figure 31: Effects of the sugar tax on sports and energy drinkers' behaviour, June 2016
                                                                                                                                                          • A fifth would stop drinking sugary versions altogether
                                                                                                                                                            • Users’ plans to switch provide an incentive for diversification
                                                                                                                                                                • Figure 32: Predicted changes in behaviour patterns of those cutting back due to sugar tax, June 2016
                                                                                                                                                            • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                • Abbreviations
                                                                                                                                                                  • Consumer research methodology
                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                      • Figure 33: Best- and worst-case forecast of total UK value sales of sports and energy drinks, 2016-21
                                                                                                                                                                      • Figure 34: Best- and worst-case forecast of total UK volume sales of sports and energy drinks, 2016-21
                                                                                                                                                                      • Figure 35: Best- and worst-case forecast of UK value sales of sports drinks, 2016-21
                                                                                                                                                                      • Figure 36: Best- and worst-case forecast of UK volume sales of sports drinks, 2016-21
                                                                                                                                                                      • Figure 37: Best- and worst-case forecast of UK value sales of energy drinks, 2016-21
                                                                                                                                                                      • Figure 38: Best- and worst-case forecast of UK volume sales of energy drinks, 2016-21
                                                                                                                                                                    • Forecast Methodology
                                                                                                                                                                    • Appendix – Market Drivers

                                                                                                                                                                        • Figure 39: Trends in the age structure of the UK female population, 2011-21
                                                                                                                                                                    • Appendix – Launch Activity and Innovation

                                                                                                                                                                        • Figure 40: Share of launches in the UK sports and energy drinks market, by company, 2012-16 (sorted by 2015)
                                                                                                                                                                        • Figure 41: Share of launches in the UK sports and energy drinks market, by flavour, 2012-16 (sorted by 2015)

                                                                                                                                                                    Companies Covered

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                                                                                                                                                                    Sports and Energy Drinks - UK - August 2016

                                                                                                                                                                    £1,995.00 (Excl.Tax)