Hidden Growth Drivers of “Energy Everything” Explosion
Are there evolving sociological patterns that could be driving the massive growth of energy and nootropic products?
Energy Everything Explodes
I’d argue that the consumer interest in caffeine has never been higher. I’ve seen a collection of recent surveys that state on average three-fourths of American adults consume caffeine daily. While coffee has been powering Americans before America was even a thing, more recently consumers are increasingly grabbing some of the other “energy everything” product categories. It makes sense, right? We live in the “Age of the Endless Aisle,” where there are more options in every CPG category than during any other point in history. It’s that proliferation of caffeine-containing products and them being well-entrenched into the lives of most Americans that's causing “energy everything” to become a certified consumer movement. Whether hitting the gym, staying at the top of your game during busy workweeks, or simply preparing for weekend activities, consumers continue to reach for energy drinks and energy supplement that are packed with caffeine and oftentimes nootropic ingredients to provide a physical and mental boost.
Evolving Marketplace Dynamics
If you have been living under a rock though for the last 5-7 years, you might be surprised to hear that the U.S. energy drinks market is no longer just sugar-filled carbonated caffeine water products with brands marketing as being aligned with extreme sports and utilizing imagery of bikini models. Now…some of that still goes on, especially by legacy players, but there are maybe four major shifts within the U.S. energy drinks market that’s worth mentioning quickly…
This beverage category in America is now 27 years old, so any early consumers of energy drinks are now Gen X or Older Millennials. Someone in their mid-30s to upper-40s isn’t influenced by the same marketing, packaging, or product attributes…yet they are still buying A LOT of energy drinks.
The growing “health and wellness minded consumer” is driving the evolution of product attributes. Energy 1.0 was sugar-filled carbonated caffeine water. Energy 2.0 was zero-calorie carbonated caffeine water. Energy 3.0…which is where we are today…is all about performance energy drinks (aka those with nutraceutical ingredients) and/or clean energy drinks (aka those with natural ingredients).
There’s a diversification of targeted consumers for those energy 3.0 drinks, such as females and the highly desirable esports (or gamer) cohort.
Focus is being put towards diverse ethnicities…be that with certain flavors, packaging designs, or marketing campaigns/sponsorships.
As you can tell, the U.S. energy drinks market is no longer driven by the 18- to 29-year-old white male consumer cohort. Instead, a variety of intertwined demographics and psychographics are driving the growth in the energy drinks market. But since this content is intended to cover more than just energy drinks, I want to shift into breaking down two hidden growth drivers that I believe are accelerating the popularity of energy and nootropic products that are focused on improve physical and cognitive performance.
Hustle Culture
Hustle culture is a concept that centers around working harder and faster than everyone else…one that makes you feel like if you don't keep up with the pace of life then people will leave you behind. Hustle culture has taught us that there's always more: more money to make, a bigger title or promotion and a higher wall to climb. I’m not going to be the guy that says hustle culture is toxic because I believe working your ass off, increasing your productivity, and dedicating yourself to work can create unparalleled upside if you’re optimizing for career success.
Now…success is defined in infinite ways, so all that hustling can come at a cost. As so many people found out during the last few years, being a hustler in a chaotic environment involves paying a huge personal price. Your brain and body weren’t built to handle the physical and psychological stressors of continual hustling. You see where I’m going with this…good, bad, or ugly, hustle culture is a hidden growth driver of energy and nootropic products because of the simple fact that something exists that can give consumers a possible mechanism to achieve “more” within their daily lives.
Keepin’ Up With…
The second hidden growth driver of energy and nootropic products is adjacent to hustle culture and that’s what I’m calling the “Keepin’ Up with the Joneses Effect.” Animal brain thinking, the need to fill a void or the desire to simply impress, can drive people to irrationally overspend on material items. Subconsciously, humans look at those around them for confirmation of their social and economic status. Whereas a peacock fluffs his feathers, humans flaunt their material possessions. That feeling of being in that hamster wheel of competition isn’t going away anytime soon in America. If anything, social media has made it a thousand times worse. So, how does this “more, more, more” mentality convergence with energy and nootropic products? Like its impact within hustle culture, the simple fact that something exists that can give consumers a possible mechanism to achieve “more” within their daily lives is highly desirable.
What’s Next?
I want to consider the beforementioned shifting marketplace dynamics and hidden growth drivers to talk about what’s next within the energy and nootropic categories from a product attribute perspective. Firstly, and just to get this out of the way…yes, the basic legacy products will continue to have a place in the market near-term. That’s obvious though…humans are stubborn creatures that rarely change behavior quickly, but we want to skate where the puck is going…not where the puck has been, right? So, I want to expand on what I was talking about with the “Energy 3.0” concept. Whether we are talking RTD beverages, ready-to-mix powders, or pills/capsules, more consumers everyday are looking for the total package. That means being within the intersections of clean energy and performance energy, physical and cognitive performance, but also having a thoughtfulness to your ingredients.
I know it’s always easier to follow on if I give some examples, so what I’m visualizing here is:
C4 Smart Energy = these utilize a plant-based caffeine ingredient derived from green tea extract, but also include Cognizin, which is an amazing mental focus ingredient that I love taking daily.
FITAID Energy + Sports Recovery = these are naturally sweetened, contain 200mg of caffeine from green tea, and packed with vitamins, electrolytes, BCAAs, and a few other things.
Exponent Energy = these are naturally sweetened, contain caffeine from green tea, and packed with adaptogens, electrolytes, amino acids, and nootropics.
I also think we will see the same considerations play out in ready-to-mix powders or pill/capsule formats. Brands will continue to utilize the different formats for their unique benefits that might outweigh constraints. As an example, some nutraceutical ingredients might taste rancid…so putting them in a capsule/pill format avoids that flavoring constraint. Or some nutraceutical ingredients aren’t stable in liquids long-term and need hefty dosages to be efficacious…that would make ready-to-mix powders the ideal format for that new product development concept.