As consumer perceptions of caffeine shift and the threat of more market regulation looms, companies are scrambling to find the next blockbuster to cater to demand for energy-boosting products, says an analyst.
Euromonitor International consumer health analyst, Chris Schmidt, suggests that companies should do more to capitalise on the increasing consumer interest in caffeine substitutes following a growing unease among both consumers and regulators over the possible negative effects of consuming too much caffeine.
According to Euromonitor International’s most recent health and wellness data, global sales of energy boosting products – foods and beverages positioned primarily around energy boosting claims – grew by 12% to US$29.1bn (€21.44bn) in 2012, from which energy drinks account for an impressive 88% chunk of retail sales.
Within this global energy drinks category the vast majority of products sold use caffeine as the primary energy ingredient, while the rest use mixtures of vitamins and herbal extracts.
What’s in a name?
In an analyst insights blog post Schmidt said that there is a growing consumer perception that caffeine is unnatural and potentially dangerous. “Companies – particularly those operating in the health and wellness and better-for-you segments – are increasingly positioning ingredients like green tea extract, green coffee bean extract, guarana, and yerba mate as powerful, natural sources of energy,” he wrote.
The common misconception among consumers is that these forms of caffeine are somehow inherently different to that which is found in coffee or caffeinated energy drinks has led to skyrocketing sales of products containing these alternatives, Schmidt says.
Among the energy-boosting alternatives, Schmidt outlines vitamin B and herbal or traditional ingredients like ginseng as good opportunities.
“B vitamin products have been gaining steam in a number of markets, where savvy producers have jumped on positioning them as standalone energy supplements. Driven by monster growth in the US (40% from 2007 to 2012), which accounts for roughly half of all retail value sales worldwide, the global B vitamin category topped US$3.3 billion in 2012,” Schmidt explained.
Global supplement sales of the folk remedy ginseng also shone through totalling more than US$3.1bn (€2.29bn) in 2012, pushed largely by Asian markets like South Korea and China.
Several multinational pharmaceutical manufacturers like including Bayer AG, Boehringer Ingelheim GmbH and Sanofi have invested in herbal/traditional medicine recently in order to tap into this potential for alternative energy and libido-boosting additives.
Schmidt predicts that this trend will accelerate in the mid-term, a pattern which could see some lesser known herbal and botanical ingredients moving into the energy supplement limelight.
The analyst outlines ingredients like goji berry – referred to as a “super fruit” in the US and currently being investigated as a possible energy ingredient by PepsiCo – and ayurvedic ingredients (traditional medicine native to India) like ashwagandha (Indian ginseng).
Shifting to protein
He said that protein also held potential beyond its lean muscle mass association. “As a macronutrient, it also has the ability to provide sustained energy with less advertising baggage than carbohydrates and fats,” he explained.
Schmidt said that the separate protein supplements category – tracked under vitamins and dietary supplements – saw very strong growth in 2012 with global sales growing by 9% annually to US$1.8bn (€1.33bn).
“A big part of that growth has been a renewed marketing push by leading players, focusing not on protein’s role in muscle synthesis, but rather its ability to promote a feeling of satiety while providing meaningful, sustained energy,” he explained.
This is part of a push forward for protein supplements with a focus on their mainstream, energy functionality. He said that a growing consumer association of protein with natural energy will contribute to the impressive 7% annual growth forecasted by Euromonitor International across protein supplements and sports nutrition protein products.
Recent examples of this might be Kellogg’s Breakfast to Go and MaxiNutrition Protein Milk from GlaxoSmithKline which are positioned around providing protein-fuelled, all-day energy in a convenient format.