Changes in marketing direction and a quiet year with lawsuits have seen three big players in the energy category bounce back in the eyes of consumers, but what does 2014 hold for the brands?
Ted Marzilli, CEO of You Gov BrandIndex, told FoodNavigator-USA that the purchase consideration for Red Bull, Monster, and 5-Hour Energy is on the rise, and it’s a pretty consistent increase.
“Barring new news relating to health concerns, I expect the positive trends to generally continue into 2014,” he said.
YouGov BrandIndex has been tracking the ‘buzz’ around the brands by using data collected from interviews of 4,300 people each weekday from a representative US population sample. Approximately 30,000 people responded to the energy brand research, said Marzilli.
The ‘buzz’ around the three brands took a nosedive in the fall of 2012 when 5-Hour Energy was linked to 13 deaths in the fall of 2012 . (Buzz is compiled by subtracting negative feedback from positive for the question, "If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?")
“A big event, like 5-Hour Energy had last year, does have the potential to impact an entire category,” said Marzilli, “and that is what the data indicates for energy drinks.”
But, as the figure below shows, the ‘buzz’ around the brands is returning to a positive level, and Monster and Red Bull have almost recaptured the same levels as they enjoyed in October 2012. 5-Hour Energy, however, has some ways to go to recover the same ‘buzz’ as October 2012.
Marzilli said that a change in marketing direction has helped with the resurgence. The brands are trying to come out with slightly different or related products focused on healthy, in comparison to the traditional focus on extreme sports and people who wanted to be ‘amped up’, he said.
Indeed 5-Hour Energy has swapped its TV cowboy sheriff spokesperson this year for charitable themes: The company has posted over 20 “5-Hour Energy Helps Amazing People” videos, as well as announcing that a portion of the proceeds from its new raspberry-flavored energy drink will go to Living Beyond Breast Cancer, which pulled in four million views in a week.
Monster in the spotlight
Monster Beverage Corp's CEO Rodney Sacks said during a recent earnings call with investors that the company was driving growth in the energy category. Sacks said that Nielsen (all outlets combined) data for the 13 weeks to Sept 28 showed Monster sales were up 9.3% YoY, while the overall US energy drinks and shots market notched up growth of just 3.1%.
In comparison, sales at rival Red Bull were up 7.4%, while sales of NOS surged 17.1%. However, sales at all the other key players were down (Rockstar -5%, 5-Hour Energy -9.7%, AMP -16%, Full Throttle -2.2%), added Sacks.
The company was back in the news at the start of December 2013, however, to blast “alarmist and misleading” research presented at a medical conference in Chicago showing that healthy adults who consumed energy drinks containing caffeine and taurine had higher heart contraction rates one hour later. The research was widely-publicized but is unpublished.
The lead researcher has since rejected the criticism from Monster , and stressed that “whether this increase in contractility is generally beneficial or not cannot be deducted from our study”.
The effects of this negative publicity could be behind the dip in the ‘buzz’ that YouGov BrandIndex has recorded over the last few weeks.
Purchase Consideration, which asks "When you are in the market next to purchase items in this particular category, from which of the following brands would you consider purchasing?”, energy drink purchase consideration for 5-Hour Energy, Monster and Red Bull rose closely together, indicating potential sales increases across the board.
Purchase Consideration is measured as a range from 0 to 100%.
5-Hour Energy, Monster and Red Bull are not clients of YouGov BrandIndex.