Sports and energy drinks are high priced premium functional beverages market that witnessed robust growth over the last decade. The United States continues to be the largest market, worth an estimated U.S. $12.5 billion in 2007, followed by Europe and Japan. Collectively, they account for about 88 percent of the global market. The U.S. sports drinks market is mature while the energy drinks segment is expected to grow at a strong rate of 33.7 percent. The European market is expected to grow at a healthy pace. The U.K. and Germany are the largest regional markets with sales exceeding U.S. $4.6 billion. France is the fastest growing market at 18 percent CAGR. Japan is projected to see a moderate growth.
The desire to lead healthy lives and the importance of exercise in physical well-being is a major growth driver propelling consumption of these new age beverages. Sports drinks are driven by unique product concepts, new brands, flavors and brand extensions of popular products. This performance beverage market is now positioned as a sophisticated specialist segment of the sports nutrition market for professional athletes and body builders. The energy drinks market typically contains a variety of revitalizing ingredients. They have crept into lifestyles of various demographic groups including children, ethnic groups and fitness enthusiasts. Energy drinks are being positioned as a universally appealing drink for children and adults alike.
Changes in branding and marketing strategies are altering dynamics at the product, player, and market level. For energy drinks, a male-oriented market is witnessing players make an all-out effort to attract more female customers and retain aging consumers. Leading companies are responding to flavor preferences of women with buzzwords such as light, sugar-free, low-carb, crisp and delicately carbonated beverages. Aging baby boomers -- with their higher disposable incomes and the desire to maintain personal health and fitness -- represent a lucrative target group. Intelligent product positioning engineered to suit specific consumer lifestyles is, and will continue to be, a key factor for successful market expansion. Introduction of unique energizing concepts, product positioning and strong marketing initiatives are expected to prop up growth patterns.
The market is characterized by the presence of specialized manufacturers as well as food and beverage powerhouses. Key players in the marketplace include Pepsi, Coca Cola, Danone, Hansen Beverage Company, Monarch Beverage Co, Red Bull, Dark Dog, GlaxoSmithkline, Extreme Beverages, Taisho Pharmaceuticals and Otsuka Pharmaceuticals. In terms of market share, Gatorade and Red Bull lead the sports and energy drinks segments, respectively. The Japanese market is dominated by regional players such as Taisho -- the pioneering developer of Lipovitan brand, Otsuka Pharmaceuticals and others.
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