Industry News | April 19, 2012 | QSR Exclusive Brief

Experts: Energy Drinks an Untapped Growth Opportunity

Experts agreed during a QSR-hosted webinar that energy drinks offer quick-serve operators a tremendous growth opportunity that has so far been largely untapped.

Guy Wootton, director of category insights for Red Bull, provided his outlook on the beverage category along with David Lockwood, director of research consultancy for Mintel, in a complimentary webinar hosted by QSR on April 17.

The growth opportunity, Wootton says, stems from the fact that energy drinkers and quick-serve visitors are often the same population; Red Bull research indicates that 92 percent of energy drinkers visit quick-serve restaurants.

When asked if they would buy energy drinks in a quick-serve environment, 81 percent of energy drinkers said they would be likely or extremely likely to do so. About 70 percent claimed it would be incremental to their existing beverage purchases, meaning the risk of selling energy drinks is extremely low, Wootton says.

“Nearly one in three quick-serve shoppers buys energy drinks, but very few quick serves actually stock energy drinks,” Wootton says. “The implication is that nearly a third of quick-serve shoppers has to go to a competing environment to purchase that item.”

Competing environments are grocery and convenience stores, where 83 percent of energy drinkers buy their beverage, according to Red Bull’s research. Wootton says both of these venues draw customers away from quick serves by offering both food and energy drinks.

Red Bull’s research also reveals that energy drinkers have different purchasing motivations than the general population. When asked when they like to purchase energy drinks, 60 percent of respondents said after lunch.

“At some outlets, that’s white space where you can drive incremental purchases and potentially drive some foot traffic, as well,” Wootton says.

Mintel’s Lockwood says energy shots and house-made energy drinks have not fared well. Outlets such as Jamba Juice and Krystal even removed house-made energy shots and drinks from their menus in Q4 of 2011.

“Energy drinks are a highly branded category, so that’s the kind of white space to look into,” Lockwood says.

To view the webinar, click here.

By Sonya Chudgar