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Energy Drinks

May 9, 2021 | Trends

In 1982, Dietrich Mateschitz, an Austrian who frequently traveled to Thailand, relied on a local beverage called Krating Daeng to help tackle his jet lag. After a long flight from Europe to Bangkok, Mateschitz would down the tonic over ice, which helped his fatigue all but disappear. Krating Daeng consisted of water, cane sugar, caffeine, taurine, vitamin B, plus inositol β€” a carbocyclic sugar abundant in the brain.

As luck would have it, a company client, Chaleo Yoovidhya, also owned a tonic drink company. Mateschitz proposed introducing Krating Daeng to the west, and Yoovidhya and Mateschitz each invested $500,000 in the startup. In Austria, Mateschitz recruited TCBG Pharmaceutical to adapt the drink to the European market. Together, they developed a carbonated beverage called Red Bull. Formally launched in 1987 and introduced in the U.S. in 1997, Red Bull established a major new category, energy drinks. By 2005, the U.S. energy drink market reached $3.3 billion, making it the fastest-growing portion of the non-alcoholic beverage market, according to Beverage Digest.

  • Market Dimensions – Coffee is no longer the only way of getting a caffeine boost. The global sports and energy drinks market reached $93 billion in 2020, more than double the figure of a decade earlier, when 2011 sales totaled $42 billion, according to Leatherhead Food Research. Red Bull sold 7.9 billion cans in 2020, equal to $7.7 billion in sales. And, despite the pandemic, Red Bull revenues were up 4% in 2020.
  • Target audience – Initially fueled by a thirsty millennial crowd seeking to pack in just one more frenetic experience, energy drinks are now a mainstream beverage. Simmons Research found that 31% of U.S. teenagers reported consuming energy drinks.
  • Competition – The Associated Press reported that more than 500 new energy drinks were launched worldwide in 2006 alone.
  • Consumption patterns – A survey of energy drink consumption patterns among college students found that 51% of student participants consumed more than one energy drink during an average semester month. Energy drinks were used to combat insufficient sleep (67%), increase energy (65%), and to drink with alcohol while partying (54%).

Getting a quick buzz is central to the marketing of Four Loko, a 23.5-ounce (695 ml) drink combining 12% alcohol by volume with 156 mg of caffeine, plus such energy-boosting amino acids as Taurine. Four Loko is marketed by Chicago-based Phusion Projects and is popularly known as β€œblackout in a can.”

Four Loko extends a principle introduced by Red Bull. Vodka and Red Bull quickly became a bar and nightclub staple. Sometimes called a β€œspeedball,” the combination offers a depressant, vodka, to bring you down and a stimulant, Red Bull, to take you back up, much like its drug namesake, which combines heroin and cocaine.

The energy drink market could indeed be a speedball, because it’s ruled by the Time Compression Ubertrend β€” the acceleration of life.

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