Energy drinks and bottles of Coca-Cola.
David Paul Morris | Bloomberg | Getty Images
As the consumption of soda in the US is decreasing, Coca-Cola and PepsiCo are trying to exploit the brand name of their brand name in order to achieve a higher growth rate in the category of energy drinks.
Coke intends to sell Coca-Cola Energy in 20 countries by the end of 2019. The energy drink contains caffeine, guarana extracts and vitamins B. Pepsi continues with its efforts to move its Mountain Dew line into a category of energy drinks and did not rule out trying to do the same with its brand of juice of soda.
Sugar beverages lost popularity to consumers who are aware of their health. The response of the coke, which included hiker prices and the launch of the Zero Sugar line, helped on the best estimates of revenue on Tuesday. Energy drinks could be another opportunity. The category has largely managed to achieve a trend.
The total sales of energy drinks and energy in the United States increased by 29.8% from 2013 to 2018, which according to Mintel last year reached $ 13.5 billion in sales. Energy drinks representing 92% of the energy market are fully responsible for this growth, notes Mintel.
Monster Beverage tried to prevent Coca-Cola Energy from selling Coca-Cola Energy and claimed to have violated the terms of its contract with a giant of beverages. In 2015, Coke, as part of a long-term distribution partnership, received a 16.7-percent stake in Monster, as well as two seats at its board of directors and a non-energy portfolio of the energy company. Monster, however, got Coke's energy activity.
In July, the arbitration panel ruled that Coke could sell an energy drink on a global scale under a contract with Monster. Despite the speculation that Coca-Cola could sell its stake after the decision, Coca-Cola CEO James Quincey told the conference that the firm remains committed to the partnership with Monster.
Monster Energy is by far the market leader in energy drinks, accounting for 43% of sales, according to Beverage Digest.
"They created a great deal and a great brand, and we helped them get it to the next level," said Quincey at the CNBC "Squawk on the Street" on Tuesday.
Quincey added that the Monster is still growing, and that Coke is predicting a different type of consumer for its energy drink. Coca-Cola Energy sees it as a "smoother competitor of taste" than other energy brands. Early results show that energy drinks attract customers who usually do not enjoy energy drinks or do not drink monsters, he said.
In Spain, the first market for coke energy, drinks have already managed to capture a 2% share of the energy category since its introduction in April, says Quincey.
The executive directors have not yet shared any plans to introduce Coke Energy to the US, but they said that the company could benefit from waiting to find out more about early markets.
Mountain Dew Amp Game Fuel
Source: Mountain Dew
Pepsi recently introduced an energy drink Mountain Dew Game Fuel, which is intended for video game players.
PepsiCo Executive Director Ramon Laguart said at the conference in the second quarter that the company is seeking to move Mountain Dew, which is known for its high content of caffeine, into the category of energy drinks "in small steps". He did not rule out the idea of spreading the Pepsi brand to energy drinks, but he considered consumers buying energy drinks looking for different "suggestions".
The game Fuel is not the first prey of Mountain Dew in energy drinks. When Pepsi released Amp Energy, he used the Mountain Dew brand on his packaging, but he stopped in 2011. Volume amp.
Pepsi introduced Mountain Dew Kickstart more than six years ago, as sales of energy drinks slowed down. The company has given a drink to consumers looking for an increase in energy in the morning. The company did not consider it an energy drink since it contains less caffeine. Since then, the sale of Kickstart has dropped, but it is again leaning up, said Laguarta.
Coca-Cola shares increased by 6% in the afternoon trading, after the company increased its revenue forecast. The coke stock, which has a market value of $ 232.5 billion, increased by 15% in 2019.