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Increased Public Scrutiny for Energy Drinks

March 2013 Communication

Energy Drinks have become the new star of the supermarket and drug store checkout counters.  They are incredibly profitable throughout the channels of trade.

One of the most popular – and profitable – is 5-Hour Energy.  This 2-ounce shot contains caffeine, sugar, and assorted other low-cost ingredients such as very high levels of B vitamins and a substance called taurine. and sells for around $2.50 at the checkout counter.  Recently, 5-Hour Energy has launched a national advertising campaign.

There is considerable doubt as to the effects of these energy drinks and little scientific evidence that shows the energy-giving effects of the combination of ingredients that go into these drinks.

However, there is an increasingly growing dark side to energy drinks.  Federal officials have received reports of 13 deaths over the last four years that cited possible involvement of 5-Hour Energy, according to Barry Meier of The New York Times.

In his 14 November 2012 article Caffeinated Drink Cites in Reports of 13 Deaths, Meier reported that Manoj Bhargava, CEO of Living Essentials, maker of 5-Hour Energy, “declined to discuss the filings and said he believed an article about the reports would cast the company in a negative light.”

Bhargava said, “I am not interested in making any comment.”

Subsequently, the company issued the following statement:  the company took “reports of any potential adverse event tied to our products very seriously.  He added the company complied with all reporting requirements to the FDA. The company also affirmed that it marketed 5-Hour Energy “to hardworking adults who need an extra boost of energy.”

According to Meier, “energy drink companies have promoted their products not as caffeine-fueled concoctions but as specially engineered blends that provide something more.”  For example, “Red Bull gives you wings,” Rockstar Energy is “scientifically formulated,” and Monster Energy is a “killer energy brew.”

The market for energy drinks has become the fastest-growing segment of the beverage industry with sales in the U.S. reaching more than $10 billion in 2012, according to Meier. This is more than Americans spent on iced tea or sports beverages like Gatorade.

Coffee, tea, and other naturally caffeinated beverages are not considered energy drinks.  Soft drinks such as cola products also contain caffeine, but are not considered energy drinks.  There are alcoholic beverages, such as Four Loko that contain caffeine and other stimulants and are marketed as energy drinks, but such drinks are banned in several states.

Energy drinks have a rather long history starting with Coca Cola, which was originally marketed as an energy booster in 1904 with Coca leaves and kola nuts. In the U.K. Lucozade Energy was originally introduced in 1929 as a hospital drink for “aiding the recovery.”

One of the first energy drinks introduced in America was Dr. Enuf in 1949, a soft drink fortified with vitamins to replace sugar.  Japan as a history of energy drinks daring to the early 1960s.  In 1985 in the United States, Jolt Cola was marketed as having all the sugar and twice the caffeine.

By 2001, the US energy drink market had grown to nearly $8 million a year in retail sales.  In the five years following, it grew 50 percent a year until it reached $3 billion in 2005, according to the Mintel Energy Drink Report, 2006.  In recent years growth has become ever more dramatic.

While there is no sign of any decrease in energy drink consumption, the FDA has taken notice. It is as difficult to track effects of the energy drinks as it is to track the effect of coffee.  A filling of an incident report with the FDA does not mean the product was responsible for a death or injury because such reports can be fragmentary and difficult to investigate.

The important thing is the energy drinks are on a sort of ’watch list’, and health risks will receive more intensive scrutiny, with issues like labeling and disclosures as a possible health risk likely to be demanded.  Some lawmakers are calling for the FDA to increase its regulation, and the New York State attorney general is allegedly investigating the practices of several producers, according to Meier.



About the author

James T. Berger, Managing Editor of The Wiglaf Journal, through his Northbrook-based firm, James T. Berger/Market Strategies, offers a broad range of marketing communications, research and strategic planning consulting services. In addition, he provides expert services to intellectual property attorneys in the area of trademark infringement litigation. An adjunct professor of marketing at Roosevelt University, he previously has taught at Northwestern University, DePaul University, University of Illinois at Chicago and The Lake Forest Graduate School of Management. He holds degrees from the University of Michigan (BA), Northwestern University (MS) and the University of Chicago (MBA). Berger is an often-published free lance business writer who has developed more than 100 published articles in the last eight years. For more information, visit www.jamesberger.net or telephone him at (847) 328-9633.

James T. Berger
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