Energy drink company marketing spilling controversy
Walk up to a gas station or grocery store register, and what will you likely see? A pop-up box of 5-hour ENERGY shots, Monster, and Red Bull in refrigerated cases — some brand of energy drink. Between 2008 and 2012, the industry skyrocketed with 60% growth, a sign of the surging popularity this beverage sector enjoys worldwide.
According to ThinkProgress, this growth is particularly true for people between the ages of 13 and 55, which contributes to $9 billion in sales each year. College-aged consumers are one of the biggest target markets, as they stereotypically use energy drinks to power through long, late-night study sessions and socializing.
From the staff of Sen. Ed Markey (D-MA), Sen. Dick Durbin (D-IL), and Sen. Richard Blumenthal (D-CT), comes “Buzz Kill,” a report released at the tail end of 2014. It sheds light on the current state of marketing for energy drinks, which the senators believe targets two impressionable age groups: teens and children.
Energy drinks’ health risks for kids
Parents, health professionals, and legislators have mounting concerns that two primary target markets for energy drinks are teens and even children under the age of 12. According to the American Academy of Pediatrics, the high and unregulated amount of caffeine in energy drinks poses health risks to these age groups, in addition to stimulants that can strengthen caffeine’s effects.
However, to promote their products, energy drink companies use brightly colored liquids and containers, social media, and marketing promoting energy drinks as sports drinks. The drinks often have bold cartoon logos, and some kids are attracted to them because “the can looked cool.” Monster Energy’s website has featured “a 17-year-old skateboarder, amid a slew of extreme sports videos and images of ‘Monster girls’ in low-cut tops.” Because of this, more teens and younger children are becoming consumers of stimulant-laden energy drinks.
What’s more, major corporations are jumping on the energy drinks bandwagon by acquiring these companies to appeal to a younger audience. Amway, the world’s leading direct selling corporation, recently acquired the XS Energy brand to enable Amway to reach more young entrepreneurs. As more companies find energy drinks to be a pathway to attracting millennials, the trend will most likely get bigger before it gets better.
Are energy drink companies in trouble?
The past few years, as consumption of energy drinks by children and adolescents increased, energy drinks have faced lawsuits due to the effects and marketing of their products. In May 2013, San Francisco’s city attorney filed a suit against Monster Beverage for allegedly marketing to children as young as 6 years old, more specifically with the promotional content on its website. This suit came just a few months after the attorney began investigating energy drinks in October 2012.
That suit was prompted by an incident in October 2012 when Monster was sued by the parents of a teen who went into cardiac arrest after drinking two of the company’s energy drinks in 24 hours. In March 2013, though experts concluded that there was no medical or scientific evidence to support claims that the caffeine overdose from Monster consumption was cause of death, this did not stop lawsuits from other parents whose children also died after consuming energy drinks.
In October 2014, Red Bull faced a class-action lawsuit settlement of $13 million over false and misleading advertising, particularly in the use of words like “gives you wings” and “boost.” The company allegedly promoted its products as being able to increase concentration and reaction speed and boost overall performance, though these claims were not backed by scientific research. Red Bull reportedly reimbursed customers who made a claim with either a $10 check or $15 voucher for more Red Bull products.
Lawsuits against energy drinks companies have even included celebrities. Just recently, the Beastie Boys requested that the maker of Monster Energy drinks pay almost $2.4 million in legal fees after winning their lawsuit against the company. Monster reportedly used five of the Beastie Boys’ songs in a video that ran online for five weeks without their permission. The Beastie Boys said at the trial that they would never use their songs to promote commercial goods. After Monster fought and delayed court proceedings, the Beastie Boys ran up more legal fees, for which they are now requesting compensation.
What senators found in “Buzz Kill” and other reports
Before "Buzz Kill," the senators released an April 2013 report, entitled "What’s all the Buzz about?” which shared a number of findings concerning energy drinks and how companies market them. The report found a number of discrepancies, which include “inconsistent marketing, labeling, and ingredient disclosure requirements [for] identical drinks being marketed to consumers differently, leading to confusion and a lack of transparency.”
The report also concluded that companies that target product design and marketing toward adolescents do not uniformly label their caffeine levels, which often surpass FDA recommendations. Further, these companies often make unsubstantiated claims about the effects of consuming their product.
In September 2013, these senators, in addition to Sen. John D. Rockefeller, called on 17 major energy drink companies to “commit to voluntary steps in the marketing and promotion of energy drink products.” These voluntary actions included ceasing any marketing or promotion targeted at children and sales of energy drinks at K-12 schools. They requested that the companies “agree to voluntarily label their products with total amounts of caffeine, as well as report adverse events associated with consumption of energy drinks to the FDA,” according to a press release from Sen. Durbin.
“Buzz Kill” followed-up the senators’ September request and reported on the responses they received from the 12 companies who responded. Only four of the 12 responding companies — AriZona Beverages USA, Celsius, Inc., XYIENCE, and The Coca-Cola Company — committed to not market their energy drink products toward children under 18. Other companies that did not make this commitment included Red Bull North America, Inc., Monster Energy Company, Rockstar, Inc., and Dr. Pepper Snapple Group, who together make up 90% of the energy drink market.
Only XYIENCE committed to all the steps the senators outlined in their September request. However, all companies did commit to no longer target marketing toward children under 12. The rest of the report chronicles the responses and actions of the companies involved in the senators' September outreach.
Could concerns lead to changes in legislation?
In other countries, energy drink marketing has been dealt with in its own way. In March 2014, Saudi Arabia passed legislation concerning energy drink sales and marketing practices. This included a sweeping ban on all energy drink advertising, the sale of energy drinks at certain facilities, energy drinks’ sponsorship of certain events, and free distribution of energy drinks to consumers of any age. Following suit, in November, Lithuania enacted its own legislation, which banned the sale of energy drinks to anyone under 18, a law that’s the first of its kind.
At this time, due to the results of various lawsuits brought against energy drink companies, it is unlikely that the U.S. will ban energy drinks themselves anytime soon. But it is unclear whether these companies’ marketing practices will face legislation changes.
Energy drink companies, particularly those that are marketing to children and adolescents, face scrutiny from health organizations, legislators, concerned parents, and consumers of these popular beverages. Now it’s up to energy drink companies whether they will respond to the senators’ requests for more transparency and less marketing targeted toward these younger age groups, which could mean significant changes to the types of marketing these companies use today.