What’s this buzz about energy drinks?

Sean Cole Aug 15, 2008

What’s this buzz about energy drinks?

Sean Cole Aug 15, 2008


Tess Vigeland Now I’ll be the first to cop to a $4 a day Starbucks habit — grande, extra hot, non-fat dirty chai. The host of a personal finance show should know better. But at least I don’t have Sean Cole’s habit: energy drinks. At two bucks a pop — and most junkies have at least two to three a day, if not five — you’re looking at, what, 50-60 bucks a week? It all adds up to predictions of more than $9 billion in sales by 2011. We asked Sean to do some ‘splainin’.

Sean Cole: I’ve been through Red Bull, Rock Star, Enviga, Steaz — which is an organic green tea drink. And this:

[Sound of Sean Cole opening a can of energy drink and taking a sip]

. . . is the perfect blend of all of them. Trader Joe’s store brand. Lots of caffeine, not too much sodium. Organic evaporated cane juice. Yum.

And not long ago, on a routine stop at my local Trader Joe’s, my heart broke.

Cole: So the sign says “Soon to be discontinued. Stock up now.”

So I did.

Cole: Eight, nine . . .

And then I called Trader’s and asked them why they were ditching my favorite product. It’s not selling, they said, and they wouldn’t say anything more.

Jeffrey Klineman had the same problem:

Jeffrey Klineman: You know, a lot of retailers are pretty closed. Trader Joe’s, I couldn’t even get anyone on the phone over there.

Jeff edits beverage Spectrum Magazine, one of two trade mags published by Bevnet.com. The whole Trader Joe’s thing made me wonder if energy drinks had finally reached — there’s no way around this — market saturation.

Klineman: I think the year of 100 percent growth in energy drink sales is probably about done, but that’s because the category has matured. You know it’s hard when you’re already selling $4 [billion] or $5 billion worth of product to double to $10 billion. You know, unless you’re selling bombs. Can we stop for a second? I just, I . . .

He wasn’t feeling very alert — had scallions in his lunch. We walked over to maybe the most expensive espresso machine I’ve ever seen.

Klineman: Between that and the energy drinks we’re about to feed you, you’re gonna float home.

Weird energy drinks. Brands I’d never heard of.

Klineman: We got Rhino’s. We’ve got one called Ego.

I tried one called Baza.

Cole: Oh wow.

And then moved on to Rumba, which is an energy juice.

Cole: That just tastes like juice . . . with sugar in it.

Klineman: No no no. Bottoms up.

Cole: Dude. You’re trying to kill me.

Jeff says Rumba was an attempt to push the energy concept onto the breakfast table. You’ve got companies marketing energy beer now. Aand back in June, Starbucks released Doubleshot Energy Plus coffee. Which presents the question: Isn’t there enough caffeine in coffee? But Starbucks says it’s not just about the caffeine.

Mark Rooks: Consumers told us that they wanted this product.

Mark Rooks is marketing director for the North American Coffee Partnership — which is to say, Starbucks and Pepsi. They put out the product together.

Rooks: And it was a really viable way for us to continue a dialogue with a really important consumer demographic, young adult males.

And while I’m no longer young, Starbucks was kind enough to send me every flavor of their new drink. Original coffee . . .

Cole: Mmmm.

Mocha . . .

Cole: Mmm-mmmmm!

And vanilla.

Cole: Hmmmm!

And then I started to freak out. All of these drinks have sugar and sucralose in them along with Ginseng. And of course, caffeine.

Cole: Do y’all have trouble sleeping ever?

Rooks: Hahaha — not at all!

But America does. Or rather, we don’t sleep enough — about six hours and 40 minutes on average, as opposed to the recommended seven and a half to eight and a half hours. But sean, I hear you cry, I don’t even have enough time in the day to drink an entire energy drink. Well, there’s an answer. Jeff Klineman?

Klineman: energy shots.

The little tincture-sized drinks like “Five-Hour Energy.” Jeff says they could be a half-billion dollar industry by the end of next year.

Klineman: Five-Hour Energy has just blanketed the airwaves in the last couple of years.

Five-hour energy ad: Why are energy drinks bad? Twelve spoons of sugar? That’s bad. Two-hundred calories: bad. Guarana? Tsk, tsk.

Guarana is a tropical berry that has more caffeine in it than coffee. You’ll see it in a lot of energy drinks, and it’s the main ingredient of this one drink in particular called:

Cole: “Bawls.”

That’s B-A-W-L-S. They sent me a bunch of samples.

Cole: Ah! I don’t have enough room for all of these energy drinks.

Bawls was created by Hoby Buppert. Hoby launched Bawls before Red Bull hit the United States. And it’s still a big hit among video gamers and paint-ball players. Still, I wondered if all the new competition bothered him. He said no.

Buppert: At least a lot of our immediate competitors, at least in the last year or so, have gone out of business or backrupt so that’s left us in a pretty good position.

Plus, Bawls is good.

Cole: Mmmm!

The thing is, it’s really just a highly caffinated soda. No vitamin B, no supplements. But as Jeff Klineman ominously told me:

Klineman: I don’t know what you’re exactly looking for in your buzz Sean, but I can tell you there’s something out there that will meet it.

Maybe. Until then, though, I’ve still got six Trader Joe’s energy drinks in the fridge.

[Sound of Sean Cole opening a can of energy drink]

Not including this one.

In Boston, I’m Sean Cole for Marketplace Money.

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