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Sports and Energy Drinks - UK - August 2016

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Growth set to slow in 2016
Figure 1: Forecast of UK sales of sports and energy drinks, by value, 2011-21
Impending sugar tax increases spotlight on the ingredient
Drop in 16-24 males poses a threat to the market
Companies and brands
Lucozade’s dominance continues
Energy drinks lead by NPD and adspend
The consumer
Around half of UK adults drink sports and energy drinks, rising to 80% of young men
Figure 2: Usage of sports and energy drinks, by gender and age, June 2016
Sports drinks and energy drinks need to re-enforce product claims
Figure 3: Reasons to drink selected non-alcoholic drinks, June 2016
Branded variants are the most popular and drunk the most frequently
Figure 4: Frequency of usage of sports and energy drinks, June 2016
Blurring the lines between categories – interest in water
Figure 5: Interest in selected ingredients to be included in sports and energy drinks, June 2016
Sugar concerns affect sports and energy drinks
Figure 6: Attitudes towards sports and energy drinks, June 2016
Almost two in five would not change their habits following sugar tax
Figure 7: Effects of the sugar tax on sports and energy drinkers' behaviour, June 2016
What we think
ISSUES AND INSIGHTS
The sugar tax provides a challenge and an opportunity
The facts
The implications
The trend for category blurring opens the market up to a wider audience
The facts
The implications
Low-caffeine energy drinks could provide an alternative solution
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Growth set to slow in 2016
Sports drinks continue to struggle
Energy drinks prop up the market but see sales plateau
Impending sugar tax increases spotlight on the ingredient
Drop in 16-24 males poses a threat to the market
MARKET SIZE AND FORECAST AND MARKET SEGMENTATION 
Growth set to slow in 2016
Figure 8: Total UK volume and value sales of sports and energy drinks, 2011-21
Figure 9: Forecast of UK sales of sports and energy drinks, by value, 2011-21
Figure 10: Forecast of UK sales of sports and energy drinks, by volume, 2011-21
Sports drinks continue to struggle
Figure 11: UK volume and value sales of sports drinks, 2011-21
Figure 12: Forecast of UK sales of sports drinks, by value, 2011-21
Figure 13: Forecast of UK sales of sports drinks, by volume, 2011-21
Energy drinks prop up the market but see sales plateau
Figure 14: UK volume and value sales of energy drinks, 2011-21
Figure 15: Forecast of UK sales of energy drinks, by value, 2011-21
Figure 16: Forecast of UK sales of energy drinks, by volume, 2011-21
Forecast methodology
MARKET DRIVERS
Impending sugar tax increases spotlight on the ingredient
Local government names and shames drinks through health warning
European Parliament vetoes caffeine claims, citing sugar content as a reason
Drop in 16-24 males poses a threat to the market
Figure 17: Trends in the age structure of the UK male population, 2011-21
Half of adults exercise at least twice a week
KEY PLAYERS – WHAT YOU NEED TO KNOW
Lucozade’s sports drinks dominance continues
Lucozade leads the energy market, followed by Red Bull
Energy drinks lead by NPD
Energy drinks dominate spend
MARKET SHARE
Lucozade’s sports drinks dominance continues
Figure 18: UK retail sales of leading brands in sports drinks, by value and volume, 2014/15* and 2015/16**
Lucozade leads the energy market, reporting strong volumes
Red Bull grows value and volumes by more than 6%
Challenger brands look to innovation to drive engagement
Figure 19: UK retail sales of leading brands in energy drinks, by value and volume, 2014/15* and 2015/16**
Figure 20: UK retail sales of leading manufacturers in energy drinks, by value and volume, 2014/15* and 2015/16**
LAUNCH ACTIVITY AND INNOVATION
Energy drinks lead by NPD
Figure 21: Share of new product launches within the UK sports and energy drinks market, by sub-category, 2012-16
Packaging pushes convenience
Health remains an issue
L/N/R sugar and calorie claims rise in 2016
Figure 22: Share of new product launches within the UK sports and energy drinks market, by L/N/R sugar and calories, 2012-16
Lucozade launches Zero
Monster goes sugar-free
Stevia provides an alternative to sugar
A natural proposition should appeal to those looking to holistic health
Organic claims rise in 2016
Flavour remains a way to offer newness
Tropical flavours continue to draw attention…
…as well as ‘punch’ flavours
Category blurring continues in the global market
Monster looks into ‘super soda’ and hydration
CSD and water brands explore high-caffeine variants
Coffee and tea provide competition
Milk used as an ingredient in energy drinks
ADVERTISING AND MARKETING ACTIVITY
Energy drinks dominate spend
Figure 23: Total above-the line, online display and direct mail advertising expenditure on sports and energy drinks by the leading operators, 2012-16
Lucozade continues to push the Find Your Flow campaign
Supported by social media
Catering to the health-conscious with Zero
Inspiring sports participation through Summer of Movement sponsorship campaign
Red Bull and Relentless focus on music…
…and gaming
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Sports drinks and energy drinks are seen to not deliver on claims
Around half of UK adults drink sports and energy drinks, especially young men
Branded variants are the most popular and drunk the most frequently
Blurring the lines between categories – interest in water
Sugar concerns affect sports and energy drinks
Almost two in five would not change their habits following sugar tax
REASONS TO DRINK NON-ALCOHOLIC DRINKS
Sports drinks and energy drinks are seen to not deliver on claims
Rehydration is top reason to use sports drinks
Energy drinks retain pick-me-up connotation
Figure 24: Reasons to drink selected non-alcoholic drinks, June 2016
USAGE OF SPORTS AND ENERGY DRINKS
Around half of UK adults drink sports and energy drinks, especially young men
Figure 25: Usage of sports and energy drinks, by gender and age, June 2016
Branded variants are the most popular and drunk the most frequently
Figure 26: Frequency of usage of sports and energy drinks, June 2016
Standard variants are most popular
Figure 27: Usage of sports and energy drinks, by type, June 2016
L/N/R formats attract women and the over-45s
Limited crossover across standard and L/N/R versions
Figure 28: Crossover in usage of sports and energy drinks, by type, June 2016
INGREDIENT ENTICEMENTS
Blurring the lines between categories – interest in water
Tea and juice can play a role in sports and energy drinks
Figure 29: Interest in selected ingredients to be included in sports and energy drinks, June 2016
ATTITUDES TOWARDS SPORTS AND ENERGY DRINKS 
Sugar concerns affect sports and energy drinks
Alternative sources of sweetness appeal
Figure 30: Attitudes towards sports and energy drinks, June 2016
Origin of ingredients interests 37%
Low-caffeine formats appeal to 38% of sports/energy drinks users
Herbal/botanical flavours enjoy a better-for-you image
Minority demand for more sports and energy drinks at foodservice outlets
EFFECTS OF THE SUGAR TAX ON SPORTS AND ENERGY DRINKS USERS' BEHAVIOUR 
Almost two in five would not change their habits following sugar tax
Figure 31: Effects of the sugar tax on sports and energy drinkers' behaviour, June 2016
A fifth would stop drinking sugary versions altogether
Users’ plans to switch provide an incentive for diversification
Figure 32: Predicted changes in behaviour patterns of those cutting back due to sugar tax, June 2016
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 33: Best- and worst-case forecast of total UK value sales of sports and energy drinks, 2016-21
Figure 34: Best- and worst-case forecast of total UK volume sales of sports and energy drinks, 2016-21
Figure 35: Best- and worst-case forecast of UK value sales of sports drinks, 2016-21
Figure 36: Best- and worst-case forecast of UK volume sales of sports drinks, 2016-21
Figure 37: Best- and worst-case forecast of UK value sales of energy drinks, 2016-21
Figure 38: Best- and worst-case forecast of UK volume sales of energy drinks, 2016-21
Forecast Methodology
APPENDIX – MARKET DRIVERS
Figure 39: Trends in the age structure of the UK female population, 2011-21
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 40: Share of launches in the UK sports and energy drinks market, by company, 2012-16 (sorted by 2015)
Figure 41: Share of launches in the UK sports and energy drinks market, by flavour, 2012-16 (sorted by 2015)

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