‘Energy drinks’ hit EU hyperspace, but threaten final frontiers

Discussing the category’s broader performance in Europe, Mintel global drinks analyst Jonny Forsyth tells this publication: “Energy drinks are doing extraordinarily well, in France particularly since the end of the taurine ban in mid-2008, with 127% growth in 2008 and massive volume growth since, while in Germany the market is even showing signs of catching up with the UK.”​

Mintel estimates that the western European market for energy drinks will be worth £2.986bn ($4.49bn) in 2013, with growth predicted across all 16 markets. For instance, the largest market the UK is expected be worth £1.646.9bn in 2016 (2013 estimate: £1,072.2bn).

“Even in recessionary markets such as Spain you’re seeing double-digit volume growth," ​Forsyth says. "Sports performance and caffeine have done fairly well in terms of the EFSA health claims, and we think that will mean a lot more crossover, more sports drinks using caffeine and taurine to gain energy drink functionality.”​

Older consumers flood category​

Asked about EU fears relating to this crossover, for instance the French food safety agency (ANSES) and reports it was assessing last year of the undesirable health effects (especially among young people) of energy drinks alone or their combination with alcohol, Forsyth says he isn’t aware of these specific concerns.

“But beyond the negative headlines, I always wondered, even five years ago, whether this would really impact growth in energy, but we’ve not really seen it to be honest,”​ Forsyth says.

Older people who are coming more into the market, looking for lifestyle support (a coffee substitute, if you like), but I think young people quite like the subversive element of it, the fact that adults don’t quite like it.”​

Pranevicius notes a clear movement towards ‘natural’ and healthy’ energy drinks in the EU, but says this could present regulatory issues in terms of calling them energy drinks, if such beverages did not, for instance, contain caffeine but instead included ingredients such as ginkgo biloba or ginseng.

“Additionally, clients want natural energy drinks – for instance, one recent launch featured no sugar (just grape juice), natural caffeine, apple and blackberry juices. And brand owners do want to change the concept of energy drinks and avoid the standard, Red Bull-style flavor.” ​

“This is interesting because in 2011, 95% of our inquiries regarding energy drinks were from companies demanding similar products to Red Bull. But the market has evolved significantly in 2012.”​

What does ‘energy’ entail in EU?​

MyDrink Beverages works with clients across the EU, Pranevicius adds, but was struggling to understand the difference between local and EU-level regulations.

“For example, in Lithuania, the local regulators say that energy drinks are drinks that include caffeine, taurine and a vitamin B complex. But UK regulators say that an energy drink is one that includes caffeine, without prescribing any levels.​

“Then a third European-level regulation [a 2012 regulation amending ​Regulation No 327/2010​] ​tells us that energy drinks are any beverage with a caffeine content between 250mg and 320mg/liter, from whatever source. So is an energy drink the same in the UK as it is in Lithuania, Poland, Germany, wherever?”​ Pranevicius asks.

“If you sold an ‘energy drink’ in Lithuania without taurine, caffeine and Vitamin B, then I think that – after six months, when your sales are increasing – the authorities will contact you directly during a market analysis period, and tell you to stop selling a product (after a sell through of, say, one month) and change its labeling.”​

Pranevicius says that different terms and explanations such as ‘energy drinks’ needed to be unified across the EU, while EU regulators should define what both traditional and ‘natural’ energy drinks were.

“Because in the future we will see more and more 'natural' products, and I believe that problems will perhaps come to a head next year,”​ he adds. “It will become a problem for brand owners because some new products are not even close to traditional energy drinks.”​