Finlays Group Insights Manager Sian Edwards explores the continued rise in natural energy drinks

The rejection of ‘unnatural’ synthetic ingredients in favour of clean label products with natural ingredients is a major, long-term dynamic in the beverage industry. Health-conscious consumers are seeking products with recognisable and unprocessed ingredients to support an increasingly holistic view of wellbeing.

The Energy Drinks Market: The Current Consumer

In 2020, 55% of soft beverage launches carried a natural/non synthetic claim*, compared to just 24% in 2010. Energy drinks seemed immune to this trend, with high historic growth. Consumers were enticed with the promise of an energy boost, often in the form of synthetic caffeine paired with high sugar levels and sweet flavour profiles. These products are effectively targeted toward busy consumers, typically “young urban men with an interest in extreme sports and recreational activities” through marketing efforts focused on engaging athletes and gamers.

The Lack of Appeal to Health-Conscious Consumers

Yet this proposition falls short for most consumers, such as the 66% of female consumers who believe that energy drinks feel ‘unnatural and unhealthy’ and the 55% of global consumers who find natural claims ‘very appealing’ . This could contribute to growth rates for energy drinks halving from historic rates of +9.4% between 2016-19, to just +4.7% CAGR between 2021-25. A natural opportunity Beverage brand owners are starting to recognise the huge opportunities of attracting a new consumer base by offering a natural, ‘clean’ alternative. Innovation is now energising the category by helping to blur the boundary between energy drinks and other, ‘healthier’ categories such as sparkling water and RTD/iced tea, while offering the same energy boost.

The Demand for Healthy Energy Drinks

Since 2016, the number of energy drink launches with an ‘all natural’ claim has increased 178%. Brands such as Purdey’s, RUNA and Tenzing are seeking to overhaul the category image with ‘naturally energising’ ingredients and clean label claims.

Formulating with plant-based ingredients such as green tea, ginseng and guarana is a critical way of appealing to this health[1]conscious audience. After all, 63% of global consumers believe green tea/matcha has a positive impact on their health. Growth and investment in ‘clean energy’ has never been higher, with major players such as Molson Coors and TATA introducing products to their range, and many brands achieving triple digit sales growth in this area. With clear consumer need, a proposition with broad appeal and the entry of major players, ‘natural energy’ drinks are truly becoming mainstream.

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Mintel GNPD 2022, Better Marketing, Mintel 2019, GlobalData Plc; survey of 22499 consumers in 40+ countries worldwide; Q3 2021, Mintel GNPD 2021, global energy drink launches 2016-2019, GlobalData Plc; survey of 22,338 consumers in 40+ countries worldwide; Q2 2021, / https://www.tataconsumer.