Energy drinks shake-up competition in CSD market as Redbull sells 6.7bn cans in 2019

Energy drinks seem to be catching the attention of young consumers in the country. At a time when the profit of beer makers is pressured, the narratives in the energy drink space seems to be different.

In recent times, there has been an increase in the number of energy drinks in the Nigerian market. The brands usually in varying sizes and they are regarded as energy-giving drinks, capable of re-invigorating consumers.

Producers are now positioning their brands based on product innovation and repackaging at the backdrop of rising concern over consumers’ health. Contributing to steady growth, energy drinks are beginning to evolve in terms of ingredients, flavor, and function, with several brands releasing lower-sugar, healthier options in slim cans. The brands have also adopted the signing of celebrities and football stars to help put their brands in consumers’ faces.

Popular brands in the country are Bullets, Redbull, Monster, Power Horse and recent entrant into the market Fearless energy drink.

According to Euromonitor International, in 2013 energy drinks captured $9.6 billion in sales. For the five-year time period of 2013-2018, the category generated $12.3 billion in sales, a 28.3 percent year-over-year growth rate and a compound annual growth rate (CAGR) of 5.1 percent, the market research firm says.

“The energy drink market grew by nearly 9 percent in volume in 2018 and is on track to increase by nearly 8 percent by volume in 2019,” BMC’s Dilworth says. “The segment has enjoyed a new catalyst with the emergence of more sports-oriented brands recently.”

Energy drinks firm Red Bull group sales surge 9.5percent last year on the back of growth in emerging markets like Africa, Brazil, and India.

According to the company, it sold 7.5 billion cans of its iconic energy drink in 2019, which was a 10.4percent volume sales increase in 2018. The company said that it saw ‘exceptional’ sales growth in India, which was up 37percent, Brazil, which saw 30percent growth, and Africa, which rose by 25percent. Revenue increased 9.5percent to 6.1 billion euros ($6.6 billion)

‘Sales quantity, turnover, productivity and operating profit were further increased and represent record figures in the history of the company,’ Red Bull said in a statement.

In addition, established markets such as Germany (+15percent), Austria (+12percent), Eastern Europe (+12percent) and the USA (+9percent) also saw strong growth.

Brand investment as well as ‘consistent cost management’ were also cited as reasons for the group’s positive performance.

‘Our growth and investment plans for the 2020 financial year are also very ambitious, providing for a continuation of the positive development to date and – as it is customary at Red Bull – being financed from operating cash flow,’ it added.

The drink owned by Mateschitz and Yoovidhya’s family, and both became billionaires thanks to the tonic they invented. Mateschitz is Austria’s richest person with $12.4 billion of wealth.

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