- 5-hour Energy Shot’s parent company Living Essentials is launching a full-size carbonated energy drink this month. The 16-ounce beverage will come in three flavors: Berry, Grape and Watermelon, which the company said are the most popular flavors of its energy shot.
- The new 5-hour Energy Beverage will be distributed nationally via independent beverage distributors and online. The 5-hour Energy Shot is available at more than 250,000 retail locations, the company said.
- 5-hour Energy Shot has dominated the energy shot segment, and the company says it has nearly 90% market share in the category. 5-hour Energy will be stepping into a completely different competitive environment where it is the underdog rather than the market leader.
As consumers continue to seek options for a quick pick-me-up, full-sized energy drinks have been on a long growth trajectory. The energy drink market is expected to grow at a compound annual growth rate of 7.2% to reach $86 billion by 2026, according to Allied Market Research. Although energy shots are predicted to grow at a similar compound annual growth rate of 7.2%, Research and Markets only expects the category to reach $56.67 billion by 2026.
While beverages present a potentially larger growth opportunity for 5-hour Energy, the company will have to face some of the industry’s beverage titans in order to carve out some space for full-sized drinks on shelves. Competition includes the long-standing category dominators of Red Bull, with 41.7% of dollar share at U.S. retail stores, and Monster, which has 31%, according to 2020 IRI stats.
Other players have also gotten into the space. PepsiCo introduced a morning-time energy beverage called Mtn Dew Rise Energy to complement its entrenched Rockstar line. The beverage giant is also the exclusive distributor of Bang Energy until October 2023. Molson Coors Beverage launched ZOA, a nonalcoholic energy drink made with better-for-you, natural ingredients through an exclusive distribution deal. And Keurig Dr Pepper is distributing Runa Clean Energy. There are also a host of startup brands in this space that are vying for consumer attention.
5-hour Energy Beverage appears to be focused only on energy, touting taste as its differentiating factor. CEO and Founder Manoj Bhargava said in a statement the company’s new carbonated beverage “has a refreshing, lighter taste compared to Red Bull and Monster.”
Consumers are also looking for more than energy in their beverages. In response, manufacturers in the category are adding a host of different better-for-you qualities including vitamins and antioxidants to provide immune support and mental clarity.
Still, 5-hour Energy Beverage will benefit from energy drinks' drift under the catch-all title of "functional beverages." According to a 2020 survey by Brightfield Group's Evergi platform, energy drinks were the most popular functional beverages, purchased by 15% of consumers in a three-month period.
As health and wellness continue to influence consumer purchasing behaviors, the U.S. energy drink sector is likely to remain one of the strongest performers in the nonalcoholic space. But innovation will be key for new entrants into this category. If 5-hour Energy can build on the cachet it has developed in the energy shot space and cultivate a healthy reputation based on taste and a clean formulation, the company may find an opportunity for success in the crowded energy drink category.