Energy Drinks Market Size 2023-2027

The energy drinks market size is projected to reach over USD 40.04 billion, at a CAGR of 8% between 2022 and 2027. Energy drinks as well as sports drinks, containing high levels of caffeine, taurine, and other stimulants, are popular among young adults and athletes for increased energy and focus. Market growth is fueled by rising consumption, despite concerns about potential health risks leading to stricter regulations on labeling and marketing. The energy drinks market, encompassing soft drink and carbonated beverages, includes a variety of products like fruit and vegetable blends, bottled water, and beverage concentrates. Rising incomes and a focus on health wellness drive demand for immunity-boosting beverages with vitamins and minerals, guarana, and electrolytes. Popular among the younger generation and adults segment, these drinks offer energy levels, mental stimulation, and improved cognition. Despite concerns about caffeine overdose, hypertension, and nausea, consumer lifestyle trends and expert analysis show evolving purchasing patterns for functional ingredients like yerba mate and green tea extract.

What will be the Size of the Energy Drinks Market During the Forecast Period?

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The market is a dynamic landscape, encompassing various factors influencing its size and growth trends. With a diverse product type, including supplements, sports and energy drinks appeal to a wide-ranging audience. Health consciousness, a key driver, has led to innovative formulations, addressing concerns about sugar content and ingredient quality. In Denmark and Hungary, heightened health awareness influences consumer choices, creating market opportunities for manufacturers. Availability at different prices accommodates diverse incomes, contributing to energy drink growth. This introduction sets the stage for exploring essential facts, executive summaries, and the broader dynamics shaping the industry's size and evolving trends.

Market Segmentation

By Product

The market share growth by the sparkling energy drinks segment will be significant during the forecast period. Sparkling drinks are said to provide instant energy, they are very popular among the young generation all over the world. To meet the high popularity among the young population, suppliers are developing various types of carbonated drinks. Continuous supplier improvement can increase their customer base.

The sparkling energy drinks segment was valued at USD 57.67 billion in 2017 and continued to grow until 2021. 

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By Distribution Channel

The offline segment generates revenue from product sales through hypermarkets, supermarkets, clubs, department stores, and independent retailers. Sellers are driving offline sales by expanding their in-store operations across locations. Businesses can increase sales and serve all types of consumers through expansion in large geographic areas. With the growth of retail channels in cities and regions, customers have become familiar with different types of drinks. Thus, such factors will drive the growth of the offline segment in the global market during the forecast period.

The shift in shopping preferences drives beverage sales through online channels, which are expected to increase significantly during the forecast period. The penetration and geographic reach of e-commerce are the main drivers of this change. Strong infrastructure for penetration of e-commerce services also increases the preference for online distribution. Additionally, in the retail segment, key players play pivotal roles in the distribution and accessibility of drinks, influencing the market dynamics with innovative strategies, while supermarkets witnessed shifts in sales patterns and consumer preferences.

The sparkling drinks market is expected to stabilize in the coming years due to the adverse health effects of carbonated drinks such as belching and heartburn. Consuming a lot of soft drinks increases the risk of chronic diseases such as diabetes and obesity. Therefore, factors such as increasing health awareness and increasing health awareness among millennials are expected to hinder the growth of the sparklings segment during the projection period.  Its mainly made from still, non-carbonated water. Coca-Cola and Monster Energy are key players operating in the static market. Furthermore, energy drinks are essentially favored by athletes and consumers who are trying to avoid soft drinks. With the trend of healthy eating, the market share is still likely to increase as is still considered healthier than carbonated water. Therefore, all these factors will drive the growth of the market. 

Moreover, the drinks market showcases robust product segmentation, catering to diverse consumer needs. Popular in the United States and the United Kingdom, these beverages target individuals seeking enhanced levels and stamina. A variety of brands offer products in bottles, aligning with the interests of health-conscious consumers. The inclusion of Vitamin B and other vitamins in some products emphasizes health benefits. Teenagers, drawn to these beverages for their stimulating effects, contribute to a broad consumer base. Competitors engage in continuous development to capture the interest of demographics across various income levels. Disclaimer usage ensures responsible consumption, reflecting the industry's commitment to transparency.

Key Region

APAC is estimated to contribute 36% to the growth of the global market during the forecast period.

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Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. As disposable income levels have increased in recent years, consumers may spend more on functional drinks. In addition, the increase in retail and the increase in the number of private labels in these economies provide a channel for selling drinks. Furthermore, suppliers are expanding their regional presence by adopting different business strategies, such as launching products in specific countries. To expand their presence in the APAC market, many manufacturers are investing heavily in marketing and promoting their brands. The players are also proposing innovative measures to increase their market share. These factors will fuel the market growth during the forecast period. 

The economy of China, altering the market environment, and the evolving impact of dietary supplements on consumer preferences. The impact of dietary supplements on formulations and their reception by health-conscious consumers has become increasingly noteworthy in China and Latin America Furthermore, the rise of a subscription business model in the beverage industry significantly influenced the market. Subscription-based services tailored to specific consumer needs gained traction, introducing a new dimension to product accessibility and market penetration. In 2020, the outbreak of COVID-19 in the region in early 2020 negatively impacted the arket. However, in 2021, the initiation of large-scale vaccination drives?lifted the lockdown and travel restrictions, which led to the resumption of stores, food service centers, and cafes. In addition, increasing sales from e-commerce channels will drive the growth of the market in the region. Such factors are expected to drive the market during the forecast period. 

Market Dynamics

The market is increasingly impacted by innovations in the nonalcoholic segment of the beverage industry, particularly as consumer preferences shift towards healthier options. This includes products enriched with multivitamins and sweeteners to enhance wakefulness and combat sleep deprivation. Beverages featuring flavors like lemon, lime, orange, and berry are gaining popularity, offering traditional energy boosts without the depressive effects of alcohol. As major energy and traditional energy drink brands innovate, they focus on incorporating these health-conscious ingredients to appeal to a growing market concerned with wellness. The market benefits from these trends as new technology and reagents are developed to support the production of these fortified beverages. The demand for improved product offerings in the nonalcoholic segment reflects a broader shift towards healthier lifestyle choices and enhanced consumer experience.

Energy Drink Market Driver

Hectic lifestyle and need for instant energy are the key drivers for the growth of the market. Changing lifestyles and working methods, globalization, and many other aspects have made consumers' lives busier. They have more work than time to complete their tasks. So, to survive in such a competitive environment, they have to put in more effort. Since these energy drinks are rich in energizing ingredients like ginseng, caffeine, and others, they keep the mind and body sharp. The caffeine found in drinks boosts overall productivity by increasing activity and alertness. Most consumers between the ages of 18 and 34 regularly consume caffeine-based drinks.

Red Bull, the leading  brand, holds approximately 32% of the market share. The caffeine content in most drinks ranges from 80 to 150 milligrams per serving. It hold a major position in the energy beverage market. Thus, factors such as hectic style and immediate  demand will propel the energy drink market growth during the forecast period.

Energy Drink Market Trends 

Increase in demand for low-calorie energy drinks is the key trend in the market. The energy drink market has experienced significant growth due to changing consumer preferences towards beverages that provide instant energy and mental stimulation. Caffeine, a common ingredient in energy drinks, is a stimulant that helps increase alertness, memory, and mood. However, excessive consumption of energy drinks containing high levels of caffeine can lead to health risks such as hypertension, nausea, restlessness, and even caffeine overdose. In response to health concerns, manufacturers are introducing sugar-free and low-calorie energy drinks made with fruit and vegetable extracts, vitamins and minerals, and electrolytes. The market for energy drinks is expanding beyond traditional consumers, including teenagers and adults, as disposable incomes rise.

The trend towards healthy lifestyle choices has also led to the popularity of immunity-boosting beverages and supplements. The food and beverage industry is witnessing a shift away from carbonated beverages and sugary soft drinks towards healthier options like bottled water, sports drinks, beverage concentrates, and tea and coffee. Despite the health concerns, energy drinks continue to be popular due to their ability to provide an instant energy boost, making them a preferred choice for individuals leading busy lifestyles. However, it is essential to consume energy drinks in moderation to avoid health risks. Thus, such trends will shape the growth of the market during the forecast period.

Major Market Challenge

Stiff competition from low-cost substitutes is the major challenge that affects the growth of the market. Energy drinks have encountered significant competition from more affordable alternatives such as carbonated soft drinks, bottled water, and fruit and vegetable juices. While energy drinks contain stimulants like taurine, ginseng, and guarana, these substitutes offer energy through natural sources like glucose and essential vitamins and minerals. The demand for these beverages existed in the market prior to the advent of energy drinks. In developed countries, the market for energy drinks has expanded due to changing consumer lifestyles and the association of these beverages with sports events. However, in emerging economies, energy drinks have not gained widespread popularity.

The cost of energy drinks, including marketing expenses, is significantly higher than that of these alternatives. This price difference, coupled with health risks such as caffeine overdose, hypertension, nausea, and restlessness, may deter consumers from choosing energy drinks over other non-alcoholic beverages. Nevertheless, adults seeking alertness, memory enhancement, and mood improvement continue to opt for energy drinks as part of their healthy lifestyle choices. Hence, the above factors will impede the growth of the market during the forecast period.

Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Key Energy Drinks Market Players 

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Key Offering- The Coca Cola Co.: The company offers drinks such as BPM energy, Predator energy, and Burn energy drink.

The market growth analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Abbott Laboratories
• Britvic plc
• Cargill Inc.
• Decathlon SA
• DyDo Group Holdings Inc.
• Hype Energy
• Keurig Dr Pepper Inc.
• Monster Beverage Corp.
• National Beverage Corp.
• Otsuka Holdings Co. Ltd.
• PepsiCo Inc.
• Red Bull GmbH

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. The market forecast report also offers data that is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The market is increasingly influenced by evolving dietary choices and health trends, particularly within the nonalcoholic and healthy lifestyle sectors. Innovations in beverage offerings, including coffee and fruit-flavored drinks like watermelon and mango, cater to consumers seeking options that enhance mood and support overall well-being. As disposable incomes rise, there is greater demand for beverages that address issues like restlessness and support memory enhancement. Prediabetics and health-conscious individuals are seeking products that align with their dietary choices, driving the development of low-sugar and functional beverages. The market responds to these needs by integrating advanced technologies to support the production of these health-focused products. This includes addressing consumer concerns related to alcoholic beverages and offering alternatives that align with healthy lifestyle goals. As trends shift, the market continues to adapt to ensure that product offerings meet the needs of modern consumers.

What are the Key Data Covered in this Energy Drinks Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the drinks market size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across APAC, North America, Europe, South America, and Middle East and Africa
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of drinks market companies

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