Ten years ago, the only way anyone drank energy drinks in bars and pubs was with vodka. Now, the “Vodka Red Bull” bar call has been replaced by the ubiquitous bomb serve, plus increasing use of energy drinks as a cocktail ingredient. “There is still an element of the vodka energy serve that introduced energy drinks to the on-trade, but licensees are reporting that the majority of energy drink usage is going through bomb serves,” says Simon Green, marketing director for Global Brands. “Now it is short cocktails that are driving growth.”
Global Brands has a share of the market with its Kick Energy brand, which is embracing current trends by offering tools such as branded bomb-style cups. “If the ongoing trend is for short cocktails and bomb serves, we will provide the on-trade with drinkware to help them be part of it,” Simon says.
The latest activity for Kick Energy is the roll-out of portable, stand-alone bars for venues (pictured below) so they can offer a dedicated station for serving bombs. After successful trials at student union bars and Luminar nightclubs, it offers a full metal bar solution on wheels or a more portable collapsible bar, with stackable bomb cups for preloading with the liqueur ready for service. “They can be temporary, semi-permanent or even permanent, taking pressure off the main bar,” Simon says.
With the classic bomb serve being an energy drink knocked back with a herbal liqueur such as Jägermeister, Global Brands is running activities with another brand in its portfolio, Jungfrau, as well as its Goldschläger gold-flaked cinnamon schnapps. The company is working with bar operators to provide promotional materials such as printed menus that unite its brands in one “bomb” solution. When a bomb bar was used for one night at Loughborough University’s student union, sales of Jungfrau outsold vodka for the first time because of the bomb serve.
In the on-trade, adults aged 18 to 24 remain the key market for energy drinks, particularly students. La Fée NV Absinthe Verte – with an ABV of 38 per cent – has been a hit with students and young adults because of its mixability with energy drinks. La Fée’s distributor, Cellar Trends, has been running promotional activity with student-oriented bars including student union bars supplied through NUS Services Limited (NUSSL), with point-of-sale materials promoting a serve of La Fée NV with an energy drink over ice.
The bomb serve reversed the decline in energy drinks sales in bars and pubs in the UK, and they continue to show strong volume growth of 18.4 per cent – now worth £225million in the on-trade. “Growth is being driven by increased penetration of the category as consumers better understand the role energy drinks can play in their day-to-day lives,” says Tom Smith, trade communications manager for the market-leading brand, Red Bull. “In the case of the on-trade, this is for people wanting to be at their best through the night, and we’re also seeing increased consumption in the early evening as people get their nights off to a flier to get through the post-work slump.”
Tom says that Red Bull has benefited from the phenomenon of people going out less during the week but spending more when they go out at the weekend. “With the ‘weekend millionaires’ out in force and prepared to spend more on drinks, to maximise the opportunity, it’s advised that you steer them towards high-margin offers to drive profits,” he suggests. “Energy drink consumers are the biggest spenders in the on-trade but – like any category – they want to know what they’re going to be paying. Menu listings and finished drink pricing need to be communicated so as not to miss out on sales.”
Red Bull shows little sign of losing its dominance of the category, performing particularly strongly in managed bars and pubs to overtake J2O as the biggest soft drink brand. This has followed a raft of activity with groups ranging from TCG and Stonegate Pub Company to Yates’s, Revolution and G1 Group as well as independent bars. It worked with Stonegate pubs to trial Red Bull Special Editions – three new flavours that are now due to be launched in the UK in early 2013. The range is made up of the cranberry Red Edition, the lime Silver Edition and the blueberry Blue Edition and has already been a hit in other European countries including Germany.
Gavin Lissimore, Red Bull’s strategy and planning manager, says: “The launch of Red Bull Special Editions is a really exciting piece of activity for us and one that we expect will add value to the category and drive profits for pubs and bars. We know that some consumers don’t buy into the category because they don’t like the taste of energy drinks so by offering them a range of new flavours, using the strength of the Red Bull brand will deliver against these concerns and ultimately drive penetration into the category.”
Red Bull Sugarfree is currently benefiting from a £2million marketing campaign, including advertising close to Revolution bars, directing people specifically to their local Revolution to buy the product. Other brands focusing on healthier ingredients include Pussy, a 100 per cent natural energy drink made with products such as sarsaparilla and milk thistle.
Demand for lower-calorie energy drinks is expected to grow, according to David Armstrong, head of buying at wholesale supplier Makro. “Given the current national trend towards healthier lifestyles, we anticipate that more brands will introduce lower-calorie options to their current range,” he says. “As a result, we expect to see a significant uplift in healthier sports and energy drinks over the next few years.”
The trend for money-conscious consumers to switch to own-brand products prompted Makro to launch its own energy and sports drink range, Power Up, featuring seven variants from Original to Sugar Free. “The Power Up range has been designed to appeal to general business and trader customers, and the competitive pricing ensures the products are a profitable, quality alternative to big-brand energy drinks.”
But the big brands show no sign of slowing growth. Coca-Cola Enterprises (CCE), whose brands include Monster and Relentless, almost doubled its share of the energy market in on-premise last year, according to figures from research group CGA. “Energy is a hugely exciting opportunity for licensees and they should focus on having a tight range of brands that their customers know and trust,” says Colm O’Dwyer, sales and customer director for out of home at CCE.
Monster, which is available to the on-trade in a 250ml bullet can, is the fastest-growing energy brand in the UK on-trade where it is now worth £12.8million. Last year, it saw a 144 per cent uplift in volume sales, according to CGA, and now has a 32 per cent volume share despite only being launched in the UK on-trade three years ago.
It is set to expand its on-trade distribution through a new partnership that gives it “preferred energy drink status” with Carlsberg UK’s network, increasing its availability to independent licensees. “We’re confident that independent licensees buying through Carlsberg UK will see the same uplift in sales that managed pub and bar operators serving the Monster range have enjoyed,” says Andrew Blakely, Monster’s on-premise account controller.
The brand has built on its links with the club world with a major presence at last month’s Monaco International Clubbing Show, organising freestyle motorcross (FMX) displays followed by an after-party at the Life Club on Monaco harbour. At the same time, Monster has been building distribution in pubs and bars such as the Cardiff-based Brains’ estate, which switched to the brand as its exclusive energy drink range in 2011 and now stocks it in 80 of its managed bars and pubs such as The Yard in Cardiff. “The switch to Monster has really helped to push energy drinks through our pubs and bars,” says Brains retail marketing manager Natalie O’Rourke. “Monster cocktails have been targeted at the right venues, and staff incentives have proved very effective in motivating our team members.”
Energy drinks are being used increasingly in cocktails by operators such as Ultimate Leisure, run by Eclectic, which offers them across its late-night bars such as Bambu in Newcastle upon Tyne. Its drinks include the Electric Beach, mixing Monster Energy with Russian Standard vodka, Teichenné peach liqueur, orange juice, cranberry juice and fresh lime. With these kinds of creative uses, energy drinks are now much more than just a mixer for vodka.
Case study: The Yard Bar, Cardiff
Sales of energy drinks at The Yard Bar in St Mary Street in central Cardiff have grown since the venue, managed by Welsh brewer Brains, switched to Monster Energy last summer. The change has been “universally accepted” by customers, according to manager Jon Adams, which he says has been helped by the “stretching” of the demographic for energy drinks. “A few years ago, energy drinks were sold almost exclusively to 18- to 24-year-olds, but they’re now attracting a slightly older drinker, as people who’ve grown up with energy drinks continue to order them,” he explains. This shifting target audience matches exactly The Yard’s core customers. He estimates that the Yard sells 95 per cent of its Monster Energy serves on Friday and Saturday nights, as a mixed drink.
Originally published in the December 2012 edition of Bar magazine.