Additional resources

Because of limited time to create our blog for our regrets we have not covered all possibly interesting topics, but you can find links with our descriptions bellow:

C.P., J.P., M.P., N.S.


The competitive environment of the energy drink market (Porter’s 5 forces)

The Porter’s analysis describes the competitive environment of a market at 5 levels : the bargaining power of suppliers and customers, the competitive rivalry, the threat of new entrants and the threat of substitute products.


The bargaining power of suppliers

  • Large number of suppliers: ingredient makers, manufacturers of cans, packaging suppliers…

Because they are numerous on this market, suppliers don’t have power on the energy drinks industry.

The bargaining power of customers

  • Decrease in purchasing power

Customers have a high power on the energy drinks market because they can choose to switch from a product to another one, particularly for economical reasons.

Competitive rivalry

  • A large numbers of brands on the market
  • Three brands share the majority of the market. These brands operate globally (CocaCola Company, PepsiCo, Red Bull GmbH)
  • The other brands operate regionally

The energy drinks is a very competitive market but very concentrated : 3 companies share the majority of the global market, while hundreds of other little brands are fighting in a local level.

(for more information about competition, see our article “What about the competitors of Red Bull, Monsters and Burn?”)

Threat of new entrants

  • Very attractive market because of the important growth of the sector
  • Premium price of the products
  • National and local opportunities

It is relatively easy to enter in this market because of the low investment that the production requires. Even if the market is leaded by 3 brands (Red Bull, Monster and Burn), there are lot of opportunities in national and local markets.

(for more information about competition, see our article “What about the competitors of Red Bull, Monsters and Burn?”)

Threat of substitute products

  • Sports drinks
  • Soft drinks

Substitution products are a real threat in this market, particularly concerning the sports drinks which offer similar benefits to the consumers at a lower price.


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The general environment of the energy drink industry (PESTEL analysis)

The PESTEL analysis describes the environment of a specific market by defining the influence factors at the political, economical, social, technological, ecological and legal levels.


Applied to the energy drinks market, we identified 2 main influences: the social and ecological factors.


Social environment:

  • Unemployment (workplace is one of the most important place where people consume energy drinks)
  • Demography : ageing population in Europe
  • Health concerns of consumers:  they have doubts about the health dimension of energy drinks
  • The fashionable dimension of energy drinks

Energy drinks can take advantage of the current consumption trend (energy drinks with alcohol for instance).

But the market has to face some threats: the health concerns of the consumers and the ageing population phenomenon can question the future of the energy drinks market.

Ecological environment:

  • Increase in the need of natural ingredients

More and more people want to consume natural food. This ecological trend can affect the energy drinks market by threatening the image of the products (too much “industrial”).


Economic environment:

  • Recession, loss of purchasing power
  • Relative high price of energy drinks, comparing to traditional beverage
  • Market maturity for carbonated soft drinks (soda)
  • Increasing demand for alternative beverage

Energy drinks are premium products with a relative high price. Consequently, this market is sensitive to the economic conditions which impact purchasing power of consumers. The risk is that people can switch from an energy drink to a traditional drink, less expensive.

Legal and political environment:

  • Pressure on caffeine and taurine rates
  • Health concerns of governments
  • Implementation of restrictive laws

More and more governments have concerns about the energy drinks industry and the impact of the products on health. But brands don’t really react to this new legislation because they don’t see it as a real threat. Maybe it can even be a force for the market: what is forbidden is attractive…

(for more information, see our article “Health concerns about energy drinks”)


Technological environment:

  • Internet, social media era
  • Technological development can impact the production and distribution

The current technological innovations are not important enough to impact the energy drinks industry. However, this sector requires that the brands have a real presence in social media because of the youngness of the consumers: this is a “must-have” in this market


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Health concerns about energy drinks


More and more people consume energy drinks. In France, between 30% and 50% of teenagers and young adults consume these drinks. However, a lot of health associations claim that some of the components can be dangerous at high dose :

  • Caffeine – Energy drinks contain a 4 or 5 times higher caffeine rate than sodas
  • Taurine – A very high concentration in energy drinks
  • Glucuronolactone – Sugar

The consumption of these ingredients in high quantity can bring a lot of side effects. Indeed, some health issues have been observed in regular consumers of energy drinks, just like convulsions, tachycardia, high blood pressure, diabetes, or even sleep or behavior disorders. In the USA, emergency visits related to energy drinks have been multiplied by 2 between 2007 and 2011 (from 10 000 to 20 000), and concerned in majority heart problems linked to caffeine overdose.

According to an American study (Journal of Adolescent Heart – 2008) carried out on 795 New York students, regular consumers of energy drinks (superior or equal to 6 cans per month) are 3 times more likely to be smokers, to abuse of meds and to have had violent fights during the year before the study than non or light consumers. Moreover, they are twice as likely to smoke marijuana and to have alcohol troubles.

In order to face to these issues, many governments set up rules concerning energy drinks and their components.


This is the European countries which are more willing to regulate the sector. For instance, in Norway, energy drinks have to be sold in drugstores only. In Sweden, the sale is strictly forbidden to people under 15.

On the other hand, the French government firstly banned the taurine component in these drinks, because of AFSSA suspicions. In July 2008, they eventually authorized energy drinks containing taurine. But doubts concerning health issues persist. This is the reason why French members of Assemblée Nationale recently vote a new tax on the energy drinks (the “RedBull tax” – October 24th). The objective is to dissuade consumers by increasing the price of cans. Indeed, they want to set up a 1€ tax per liter of energy drinks which contain more than 0,22g of caffeine or 0,3g of taurine per liter.

In Oceania, the law plans a limitation of caffeine rates.

As a matter of fact, a large majority of countries set up laws to regulate the energy drinks market, except the USA. The North American country is pretty late in this domain : no laws, no limitations despite the increasing number of health warnings and lawsuits against energy drinks manufacturers for heart attacks or deaths. Nevertheless, the situation might change soon. Recently, we have seen a certain awareness of some senators. For instance, Markey, a candidate for the Senate said : “It’s time for energy drink makers to stop masking their ingredients, stop marketing to kids, and start being more transparent with their products”, and made the federal agencies face up to its own responsibilities : “It’s time for the FDA (US Food and Drug Administration) to crack down on these drink makers and for the FTC (Federal Trade Commission) to investigate advertising practices of these companies to ensure that kids and parents are not being subjected to deceptive marketing practices”.


Redbull, Monster and other energy drinks companies don’t really react to these governments’ measures. We can wonder if all these governmental concerns are not an advertisement for these drinks. Indeed, don’t we say that what is forbidden is attractive?

Sans titre


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Overall market presentation


Energy drinks remain a niche category. According to a study carried out by Euromonitor in 2012, the energy drinks represent only 2,7% of total soft drink consumption, and consequently are the 6th soft drinks out of the 8 studied. But this is a very growing market : between 2007 and 2011, the energy drinks sector rocketed by more than 10% per year in volume (and reached 4,8 billion liters in 2011), and more than 13% per year in value ($37 billion in 2011), while the the category of other soft drinks (sodas, colas…) are decreasing.

North America is the most important consumer of energy drinks with 36% of the global volume in 2011, far ahead Asia Pacific (22%) and West Europe (17%).


GraphIn America, Red Bull is the unquestionable leader of the energy drinks sector with 43% market share. Nevertheless, over the past few years, Monster has boomed and reached almost 40% market share. There are more than 2000 brands of energy drinks in North America, and this situation proves that this is a very dynamic and growing market despite of the government health scrutiny. Consequently, the giant brands Redbull and Monster have to face a huge competition.


  • Rockstar is an energy drink available in 20 different flavors and well known to be sugar-free. Each can represents less than 10 calories.
  • NOS is a Coca-Cola Company brand, just like Full Throttle, and is the fastest growing energy drinks.
  • Amp is a Pepsi Co brand.
  • Xenergy is an energy drink brand founded in 2004. As Rockstar, Xenergy drinks are sugar free and are available in many flavors.


In France, the energy drinks have been allowed in 2008. Consequently, the soft drink market is still largely dominated by colas (54%). The energy drinks category represents only 1,4% of this market. But it is important to note that in the first semester of 2013, Red Bull reached 0,6%, and consequently the energy drink overtook some famous brands of soft drinks like Nestea, Pulco and Sprite. Red Bull is the leader of energy drinks in the French market with 50% of market share. Well behind, there is Monster with 18% and Burn with 6%. But a huge trend in France is the apparition of private labels in the energy drinks market. They represent in 2013 almost 17% of this market.

Private label Products

Private label products from left to right: Taurine Force (Carrefour), Ginger Energy Sexy (Casino), Ginger Energy Hot (Casino), X-Tense (E-Leclerc)


Energy shots are a specialized type of energy drinks sold in little bottles (usually 50 ml). The ingredients of these drinks are the similar to energy drinks : caffeine, vitamins, guarana, ginseng, taurine etc.

This new way to consume the energy drinks is popular above all in the United States, with an offer of more than 250 brands. The most famous of these energy shots is 5-hour Energy, an Indian brand wich owned 90% of market share in 2011.


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