LONDON--(BUSINESS WIRE)--Technavio’s latest market research report on the energy drinks market in Latin America provides an analysis of the most important trends expected to impact the market outlook from 2017-2021. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
The energy drinks market in Latin America has been rapidly growing over the last few years and is expected to grow at a CAGR of close to 12% during the forecast period. The growth of the market can be attributed to several drivers such as the increased consumption of energy drinks among the younger population, launch of energy drinks with natural ingredients, and the inclusion of new types and flavors in energy drinks.
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The top three emerging market trends driving the energy drinks market in Latin America according to Technavio research analysts are:
- Launch of energy drinks made using natural ingredients
- Increased scope of the organized distribution channel
- Increasing use of energy drinks as a mixer for alcoholic beverages
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Launch of energy drinks made using natural ingredients
With increasing consumer concerns regarding health issues associated with the excessive consumption of energy drinks, vendors have started to focus on producing energy drinks based on natural ingredients, like with extracts from organic guarana and organic raw green coffee beans. For instance, Organique Energy Drink was the first energy drink launched in the Brazilian market in 2014, made using 100% natural and organic certified ingredients.
“A shift toward healthy variants can be seen across the food and beverages industry. Consumers, especially women, are now shifting away from drinks with high sugar content. Players operating in the market are coming up with new products based on natural ingredients to meet the rising consumer demand. This trend is expected to help the market grow during the forecast period,” says Manjunath Reddy, a lead analyst at Technavio for non-alcoholic beverages research.
Increased scope of the organized distribution channel
The increased scope of the organized distribution channel, including both organized retail and wholesale, has led to a rise in the volume sales of energy drinks. Organized retail and wholesale chains like Target, Walmart, and Costco are the major sales channels for energy drinks. In developed nations, retail stores are the major source of energy drink sales. Convenience stores have also seen a significant rise in the sales of energy drinks over the years owing to their convenient location in residential neighborhoods.
The organized retail sector has now spread across developing economies as well and is prevalent in the metropolitan cities of these nations. With the large shelf space and association with several brands, organized retail provides customers with a lot of options. Small local stores can offer only a few brands with specific flavors, but these retail giants can stock a wide variety of products.
“The easy availability of international brands because of the strong retail network chain in Latin America is also increasing the demand for energy drinks in the region. Thus, the increasing scope of the organized distribution channel will eventually increase the popularity and sales of different flavors of the same brand of energy drink,” says Manjunath.
Increasing use of energy drinks as a mixer for alcoholic beverages
The use of energy drinks as a mixer for alcoholic beverages is an emerging trend in the energy drinks market in Latin America. This trend is common among the younger population segment. Energy drinks are now being increasingly used as a mixer for alcoholic beverages in parties and restaurants. Combining alcohol with energy drinks can mask the signs of alcohol intoxication. However, no proper researches have been conducted to study the health implications of consuming alcohol mixed with energy drinks.
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