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Ben Carter<br />Bridget Conrad<br />Shannon Durkin<br />Mike Daugherty<br />
Beginnings of the Industry<br />Started in the 1980’s with Jolt Cola<br />In 1995 PepsiCo launched it’s cola brand, Josta<...
Industry Characteristics<br />The main point of purchase is at convenience stores<br />Other stores are beginning to see i...
Growth<br />Between 2003-2008 the sector has seen a 36 percent increase in growth<br />Energy drink users are up 17 millio...
Trends<br />New business, hence no new trends<br />Heaviest trend is in the public concern over the heavy usage of energy ...
Brands<br />The business is mostly dominated by smaller companies<br />Coke and Pepsi have not been able to over take (or ...
Leading Brands<br />Red Bull<br />Monster<br />Rockstar<br />PepsiCo’s Amp<br />Coca-Cola<br />
Age Demographics<br />Adults 18-24 and 25-34 make up 57% of the energy drink market (Mintel, 2008)<br />According to Media...
Gender Demographics<br />The number of female energy drink users grew by 74% between 2003-2008 (Mintel, 2008)<br />The pen...
Ethnic Demographics<br />Blacks and Hispanics accounted for 41% of total energy drink consumption in 2008<br />One out of ...
Sales<br />	Red Bull has a low market penetration among teens, despite a high preference for it, probably because of the h...
Usage<br />Hispanics are most likely to use energy drinks to awake<br />Energy drinks are most often used in the late afte...
Usage<br />Mintel, 2008<br />
Buying Patterns and Frequency of Use<br />From 2003-2008 energy drink consumption increased by 21% (that’s 10 full glasses...
Competition<br />Primary Competition<br />Secondary Competition<br />Strengths<br />Weakness<br />
Competition<br />Product Positioning<br />Pricing Strategies<br />Sales Force<br />Promotions<br />
Distribution<br />Trends<br />Strengths and Weaknesses<br />Opportunities and Threats<br />
Pricing Policies<br />Mintel, 2008<br />
Pricing Policies<br />Since 2002, energy drinks prices have fallen 32%<br />Why?<br />Adoption of energy drinks in superma...
Pricing Policies<br />Even with the 32% pricing decrease energy drinks are still considered very pricey in the non-alcohol...
Pricing Policies<br />Mintel, 2008<br />
Communication & Promotions Strategy<br />The energy drink industry has always been one heavily focused on the alternative ...
Communications & Promotions Strategy<br />You won’t find energy drink companies producing spots for the super bowl<br />Th...
Communication & Promotions Strategy<br />Energy drinks are heavily centered and associated with the action and extreme spo...
Communication & Promotions Strategy<br />Rather choose a lighter approach, preferring edgy humor to explain their products...
Communication & Promotions Strategy<br />Another key part aspect of energy drink promotions are the use of Guerilla and <b...
Environmental and Social Factors<br />A primary issue facing the energy drink industry is the concerns about health risks ...
Environmental and Social Factors<br />Energy drinks give their “boost” from the extreme amounts of caffeine contained in t...
Environmental and Social Factors<br />Extreme Caffeine<br />Wired X505 24oz and Fixx 20oz, contain 505 and 500mg of caffei...
Environmental and Social Factors<br />In October, 2008, 100 scientists and physicians sent a letter to the FDA asking for ...
Environmental and Social Factors<br />Case in Point: Prince Edward Island, September, 2008<br />The island lifted a 25-yea...
SWOT<br />STRENGTH: Energy drinks provide a energy boost without the crash<br />WEAKNESS: They are too expensive<br />OPPO...
Questions?<br />
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Xtreme Energy

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Transcript of "Xtreme Energy"

  1. 1. Ben Carter<br />Bridget Conrad<br />Shannon Durkin<br />Mike Daugherty<br />
  2. 2. Beginnings of the Industry<br />Started in the 1980’s with Jolt Cola<br />In 1995 PepsiCo launched it’s cola brand, Josta<br />2001 was the inaugural year for brands as we know them today: 8 million in sales<br />Wikipedia2008<br />
  3. 3. Industry Characteristics<br />The main point of purchase is at convenience stores<br />Other stores are beginning to see increasing sales due to bulk purchase options, which are cheaper for the consumer<br />Mintel, 2008<br />
  4. 4. Growth<br />Between 2003-2008 the sector has seen a 36 percent increase in growth<br />Energy drink users are up 17 million since 2008<br />Mintel, 2008<br />
  5. 5. Trends<br />New business, hence no new trends<br />Heaviest trend is in the public concern over the heavy usage of energy drinks by teenagers<br />Mintel, 2008<br />
  6. 6. Brands<br />The business is mostly dominated by smaller companies<br />Coke and Pepsi have not been able to over take (or even catch up to) the market leaders<br />Shocking considering Coca-Cola and Pepsi’s strengths as companies<br />Mintel, 2008<br />
  7. 7. Leading Brands<br />Red Bull<br />Monster<br />Rockstar<br />PepsiCo’s Amp<br />Coca-Cola<br />
  8. 8. Age Demographics<br />Adults 18-24 and 25-34 make up 57% of the energy drink market (Mintel, 2008)<br />According to Mediamark (2008) there is a 29.7% penetration in the adults 18-34 market<br />
  9. 9. Gender Demographics<br />The number of female energy drink users grew by 74% between 2003-2008 (Mintel, 2008)<br />The penetration in the market of women is 22.5% (Mediamark, 2008)<br />
  10. 10. Ethnic Demographics<br />Blacks and Hispanics accounted for 41% of total energy drink consumption in 2008<br />One out of two (47%) Hispanic teenagers will consume energy drinks<br />Mintel, 2008<br />
  11. 11. Sales<br /> Red Bull has a low market penetration among teens, despite a high preference for it, probably because of the high price<br />Mintel, 2008<br />
  12. 12. Usage<br />Hispanics are most likely to use energy drinks to awake<br />Energy drinks are most often used in the late afternoon, but 38% of users also drink in the morning<br />Mintel, 2008<br />
  13. 13. Usage<br />Mintel, 2008<br />
  14. 14. Buying Patterns and Frequency of Use<br />From 2003-2008 energy drink consumption increased by 21% (that’s 10 full glasses/user)<br />Hispanics and blacks are ethnically the most frequent users of energy drinks<br />Mintel, 2008<br />
  15. 15. Competition<br />Primary Competition<br />Secondary Competition<br />Strengths<br />Weakness<br />
  16. 16. Competition<br />Product Positioning<br />Pricing Strategies<br />Sales Force<br />Promotions<br />
  17. 17. Distribution<br />Trends<br />Strengths and Weaknesses<br />Opportunities and Threats<br />
  18. 18. Pricing Policies<br />Mintel, 2008<br />
  19. 19. Pricing Policies<br />Since 2002, energy drinks prices have fallen 32%<br />Why?<br />Adoption of energy drinks in supermarkets and wholesale discount clubs<br />Developing single serve multi-packs, and larger cans<br />Mintel, 2008<br />
  20. 20. Pricing Policies<br />Even with the 32% pricing decrease energy drinks are still considered very pricey in the non-alcoholic beverage category.<br />Rank 2nd in price behind Ready to Drink (RTD) coffees<br />Number one obstacle in obtaining new-users<br />Mintel, 2008<br />
  21. 21. Pricing Policies<br />Mintel, 2008<br />
  22. 22. Communication & Promotions Strategy<br />The energy drink industry has always been one heavily focused on the alternative audience<br />Alternative, or extreme sports<br />Red Bull racing, Dale Earnhardt #88 Amp Chevrolet, Monster Army<br /> (Mintel, 2008)<br />Alternative lifestyles<br />7 Eleven stores featured Inked energy drink, specifically targeted to persons with tattoos<br />New Zealand Herald, 2007<br />
  23. 23. Communications & Promotions Strategy<br />You won’t find energy drink companies producing spots for the super bowl<br />The big competitors choose to steer clear of the “corporate” norms<br />Prefer fast and original, a reflection of their key users<br />Racy slogans and campaigns, and an association with extreme sport <br />Mintel, 2008<br />
  24. 24. Communication & Promotions Strategy<br />Energy drinks are heavily centered and associated with the action and extreme sports industry<br />Sponsor numerous <br /> extreme athletes, teams, <br /> and events<br />Red Bull New Years Eve, No Limits- 12.31.2008<br />
  25. 25. Communication & Promotions Strategy<br />Rather choose a lighter approach, preferring edgy humor to explain their products benefits<br />Red Bull: uses humor-generating animated sketches convey their promotional messages<br />Amp: uses similar racy humor, in a effort to reach the “Everyday Man”<br />College Student demographic<br />46-64 demographic<br />Red Bull Commercial<br />Mintel, 2008<br />
  26. 26. Communication & Promotions Strategy<br />Another key part aspect of energy drink promotions are the use of Guerilla and <br /> Grass Roots marketing.<br />companies employ numerous street teams who trek all over the country, setting up shop at extreme sports venues, college campuses & spring break destinations.<br />
  27. 27. Environmental and Social Factors<br />A primary issue facing the energy drink industry is the concerns about health risks associated with the extremely high levels of caffeine found in them<br />It is easily available to highly impressionable children, who are not educated about the potential dangers of energy drinks<br />
  28. 28. Environmental and Social Factors<br />Energy drinks give their “boost” from the extreme amounts of caffeine contained in them<br />A standard Red Bull(8.4oz), for example, contains 80mg of caffeine, three times the amount of a 12 oz Classic Coca-Cola<br />Others contain considerably higher levels<br />
  29. 29. Environmental and Social Factors<br />Extreme Caffeine<br />Wired X505 24oz and Fixx 20oz, contain 505 and 500mg of caffeine respectively.<br /> That amounts to upwards of 250mg of caffeine per 12oz, compared to the 34.5mg per Classic Coke <br />Consuming one can of either of these beverages equates to the equivalent of drinking 14 Coca-Colas, 12 Pepsis, or 9 Mountain Dews <br />
  30. 30. Environmental and Social Factors<br />In October, 2008, 100 scientists and physicians sent a letter to the FDA asking for additional regulation in the energy drink industry, on the basis that it puts its young consumers at risk of caffeine intoxication<br />They requested that energy drinks list their caffeine contents on the can, set a limit to the amount of stimulant found in the drink, and require warning labels <br />USA Today, 2008<br />
  31. 31. Environmental and Social Factors<br />Case in Point: Prince Edward Island, September, 2008<br />The island lifted a 25-year ban on canned beverages and found that without the ban young students began bringing energy drinks to school. Teachers reported problems with students becoming suddenly hyperactive, followed by a lethargic crash, commonly known as the caffeine high and crash.<br />Banned at Souris Regional High<br />Doctors and physicians share the opinions of the <br /> teachers and administrators<br />Called for a restriction of sales at grocery stores to youths under the age of 18. They equate energy drinks to the likes of tobacco and cigarettes<br />There is also concern that the long-term effects of energy drinks have not been thoroughly researched.<br />The Toronto Sun, 2008<br />
  32. 32. SWOT<br />STRENGTH: Energy drinks provide a energy boost without the crash<br />WEAKNESS: They are too expensive<br />OPPORTUNITY: Juice flavored energy drinks would appeal to both Hispanic users, and morning users<br />THREAT: Heavy and irresponsible use by teenagers may lead to laws restricting their sales to anyone under 18<br />
  33. 33. Questions?<br />
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