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Dr. Pepper Snapple Group

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Dr. Pepper Snapple Group, Inc.: Energy Beverages

1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007? The energy beverage category was the fourth largest nonalcoholic beverage category in America during 2006. While it wasn’t among the top three, it was the fastest growing beverage category. The energy beverage market is primarily led by three big name brands including Red Bull, Monster Energy, and Rockstar. This market also encompasses over a few hundred smaller name brands that position themselves very similarly to the top name brands. All of these brands together proudly boasted estimated retail dollar sales of over $6 billion during 2006. The majority of these sales, 71% to be exact, occur as off-premise sales through convenience stores, supermarkets and mass merchandisers. The remaining sales are obtained through on-premise retailers, including restaurants and nightclubs. For the five years leading up to 2006, the United States total energy beverage retail sales saw a growth at an average annual rate of 42.5%.

The average energy beverage consumer is most probably a male between the ages of 12 and 34, according to data compiled in the Dr. Pepper Snapple Group article. However, adults ages 35-44 and teenagers, both male and female, make up for a large percentage of energy beverage consumers. Hispanics and African Americans also indulge in energy drinks at a higher rate and more regularly than other ethnicities and races. The average energy beverage drinker indulged in approximately 4.32 8-ounce servings per month during 2006. Consumers tend to drink energy beverages in the afternoon and are most likely at home, in the car, and at work/school. Energy beverage drinkers indulge because they enjoy the energy boost, mental alertness, refreshment, and taste from the beverage.

The primary off-premise retail channels for energy beverages are... Show More

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