The competition for the energy drinks market is just getting energized.
Day 25 of covering FMCG
Redbull, Gatorade, Monstar
Do these brands reminds you the last year World cup Final, its understandable. While Indians still feel bad for the loss at the Final, but energy drinks somehow managed to fill in their mindset.
India's soft drink consumption lags behind the rest of the world. However, at-home consumption has increased recently due to the pandemic, and many Indian families are now enjoying sugary drinks with their meals, and for many gen-z it is becoming a habit, that leads to the demand and growth of soft drink consumption
According to Euromonitor International, India’s soft drinks market is expected to reach $1 bn by the end of this year, with an expected year-on-year growth of almost 18%.
While PepsiCo is betting big on its brand , Sting . Coco Cola has relaunched its brand name “Charged” in the same category earlier this year. The brand was originally launched in the year 2017, but due to less demand it waived off. If this two big giants focusing on energy drinks was not enough, alcoholic company AB InBev , the makers of Budweiser, also entered in the category introducing the product with the brand name “Beats” energy drink in 2021.
So, what is making beverage companies bet on energy drinks now?
Energy drinks are carbonated beverages that besides sugar also contain caffeine and other stimulants such as guarana, taurine, and carnitine, among others. Energy drinks generally help an individual stay awake longer and feel energized.
Only Red bull used to be the market leader in this category since 20 year. Its a popular mixer in bar rather than energy drink. And one of the primary reason that energy drink being the smallest due to the pricing . The market leader Redbull sell their 250ml drink for ₹ 125 which is far away for a mid-low level income group. Well a 250ml Coco Cola pet bottle cost ₹ 20.
In a country where beverages are not a priority in the meal , a product with 6X cost compare the normal soft drink is perhaps why consumers continued to stay away from them.
Well now this is Changing:-
Pepsico which launched sting in 2017, has steadily boost the product sales through out the nation with the help of its pricing , A 250 ml of Sting energy drink is currently available in ₹ 35 . With this launch , PepsiCo not only introduced a new category in soft drink market but it leads to pricing war among companies and Pepsico is now leading in it.
Companies Concall’s reveal that around 15% of the contribution of sales is now coming from Sting energy drink , talking about Q1Fy25. Speaking about the improved gross margins of the company, Jaipuria, during the earnings call, said, “The mix of Sting, which is a little more profitable for us, has gone up in the overall portfolio.” Launched of Sting Blue also added volume to the category and its doing really well in the market.
Coco cola which is another big company , relaunched “Charged” with the same grammage like sting at a cost ₹20 , which induced a pricing war like situation.
In a classic Coca-Cola vs. PepsiCo competition, the packaging of both the brands are similar.
The main reason why both the companies could reduce their pricing was due to their Packaging. While international players like red bull or even Monster is well known for their can bottles which make the product cost expensive . Even Budweiser “ beats” in the similar packaging also priced it it at INR110 for a 250ml can.
But both Sting and Charged are available in Pet bottles and due to their large distribution range , with less pricing help the product category to explode in the Indian Market.
The competition for the energy drinks market is just getting energized.
Checklist routines avoid a lot of errors. You should have all this elemen tary [worldly] wisdom and then you should go through a mental checklist in order to use it. There is no other procedure in the world that will work as well. —Charlie Munger
Thank you for Reading
Mohit Jain