Energy and sports drinks account for the largest segment of the overall functional beverage market, representing over half of functional beverage sales in 2023.
Some of the top sports and energy drink brands (e.g., Gatorade, Powerade, Red Bull) have been marketed for decades, although there is still room for expansion in these product segments.
Younger Consumers and Gamers/Sports Enthusiasts Are Core Users
According to Packaged Facts’ new August 2023 report Energy & Sports Drinks: US Market Trends & Opportunities, 2nd Edition
, younger adult consumers are of particular importance to the sports and energy drink market. Packaged Facts’ May 2023 National Online Consumer Survey indicates that adult members of Generation Z, Millennials, and younger members of Generation X in the 18-44 age group are core users of sports and energy drinks. The 18-to-24 demographic consists of adult members of Generation Z, while the 25-to-34 demographic is composed of younger Millennials (and some of the oldest members of Generation Z).
Young people (particularly those in the 18-34 demographic) are less likely to prioritize sleep or a conventional sleep schedule. They may use energy drinks to improve their energy levels for work, school, gaming, socializing, or other activities. This demographic is especially likely to be gamers and to desire energy drinks that help them stay up late and perform better.
The 18-34 demographic is also more likely to engage in competitive sports or other fitness activities. Active young people may seek out sports drinks as an alternative to water – these beverages can provide pre- or post-workout fuel and enhance general hydration. Additionally, whether active or not, young people might think sports drinks are healthier to consume as a hydration booster and prefer them to water because of their taste.
Many sports and energy drink products have been released recently to specifically target younger markets who are interested in sports or video games. For instance, Prime Hydration sports drinks were launched by Logan Paul and KSI (both YouTube influencers and athletes) in 2022
, with high demand leading the products to sell out online within hours of their release. These products are designed to “refresh, replenish, and refuel” users with ingredients such as hydrating coconut water and electrolytes, BCAAs to aid in muscle recovery, and antioxidants and vitamins to further prevent dehydration. The brand expanded into energy drinks in 2023 with Prime Energy.
Those who are 35-44 (consisting of older Millennials and the youngest members of Generation X) tend to be more health-conscious than their younger counterparts. Traditionally, sports and energy drinks have a perception of being unhealthy due to being sweet and high-calorie. Consumers age 35-44 are also key users of sports and energy drinks, and they have found healthier formulations that are “better-for-you” to be most appealing.
Marketing Sports and Energy Drinks for Everyday Use
Marketing sports and energy drinks for everyday use is key to expanding sales among current users and increasing the consumer base for these products.
For instance, sports drinks that promote hydration can be promoted for everyday use due to their enhanced hydration abilities. Dehydration can make consumers feel ill or tired, and many people do not drink enough fluids throughout the day. The electrolyte content in sports drinks can more quickly hydrate consumers than water alone and keep them hydrated with fewer drinks required.
Liquid I.V. has keyed in on this need and promoted its products as more than just a sports drink. Liquid I.V. sports drink mixes emphasize day-to-day consumption for enhanced hydration and wellness, not just for use with workouts and sports activities. These “hydration multiplier” beverages are advertised to casual users as a way to keep them feeling good for work, school, travel, and other purposes (including a hangover remedy
for those who aren’t feeling so good after a night out).
After Unilever acquired Liquid I.V. in 2020, the company has greatly expanded distribution and marketing efforts, leading to fast growth. Unilever has announced that Liquid I.V. is set to become a $1 billion global brand this year
. In fact, Liquid I.V. has garnered so much interest among consumers for everyday use that it was one of the top-selling products on Amazon
during Prime Day in July.
Energy drinks are also well-positioned to be marketed for everyday use. Some people may be looking for a coffee alternative that helps to wake them up in the morning and provides energy for them to get through their day. Energy drinks can provide these benefits via caffeine and tend to have vitamins, minerals, and other ingredients that can further promote focus. Additionally, energy drinks with extra claims are cropping up to reduce “brain fog” and promote clarity of thought, creativity, memory, and brain health. These functions can be important to target for routine use instead of occasional use when needed to stay up late or function on little sleep.
Additional analysis of the energy and sports drink market can be found in the August 2023 Packaged Facts report Energy & Sports Drinks: US Market Trends & Opportunities, 2nd Edition
About the blogger
Cara Rasch is a food and beverage analyst for Packaged Facts. She studies consumer and industry trends in this space and has a B.A. in economics from Allegheny College.