Region abuzz over energy drinks
Energy drinks have become a part of Imran Nawab's daily routine. The 24-year-old from Bangladesh says he relies on a can of Rockstar to give him a boost when he is working at a call centre in Dubai Outsource Zone.
"When you feel tired and you drink this, you feel energised," Mr Nawab says, as he grabs a tall can from a refrigerated display case at a Dubai petrol station. "And I can go for long hours. I can concentrate and I can work longer." Mr Nawab usually has one a day, four times a week, and it gives him a bigger jolt than the traditional stimulant of choice of coffee or tea. "It takes a lot of coffee, maybe three or four cups," he says. "With energy drinks, one is enough for me."
And Mr Nawab is not alone. In the UAE, consumers drank about 16.1 million litres of energy drinks last year, data from the consultancy Euromonitor International show. This was worth about US$121.6 million (Dh446.6m). By 2014, this is expected to grow to 29.6 million litres worth $199.8m, Euromonitor says. The leading brands such as Red Bull, Power Horse and Burn have grown in popularity since they came on to the market more than 10 years ago.
Red Bull evolved from an unknown tonic syrup in Thailand to a trendy drink in the hands of celebrities after high-profile advertising and promotional deals. One example is the Red Bull Air Race, where turboprop planes, emblazoned with the company logo, try to outfly each other in a series of events in major cities around the world, including Abu Dhabi. Another marketing tactic is the sponsorship of teams, such as Red Bull Racing, last seen here speeding around the Yas Marina racetrack during the Abu Dhabi Formula One Grand Prix last year.
Alberto Chahoud, Red Bull's communications manager for the Middle East and Africa, says the region has been key for the brand. It has seen growth in the Middle East every year since it entered the region in 1998, except last year as the downturn hit. "We witnessed some stagnation of course with the economic crisis but since 2010 started it's been regaining growth," Mr Chahoud says. Red Bull has come a long way from its humble beginnings. Dietrich Mateschitz, the co-founder of the drink that "gives you wings", as its slogan goes, was working in Bangkok as a marketing director for a toothpaste maker that later became part of the consumer goods conglomerate Procter & Gamble.
The Austrian businessman sampled a syrup that his Thai colleague, Chaleo Yoovidhya, sold locally called Krating Daeng, which is Thai for "red bull". The drink cured Mr Mateschitz's jet lag and sparked the idea to market it globally. Red Bull has since remained the global market leader, with about 4 billion cans sold in 160 countries last year, says Mr Chahoud. In the UAE, Red Bull has 85 per cent of the market share, according to David Edwards, the managing director of IMES Consulting Group in Dubai.
"Energy drinks were pretty late to appear in the UAE. They were only really launched in 2000," Mr Edwards says. "But the market is totally dominated by Red Bull. They've effectively created it and anybody else who has entered the competition has only nibbled around the margins." Power Horse has the second-biggest slice of the market and is one of the few that has stood the test of time, says Martina Kurz, the marketing director for the Austrian-based brand.
Ms Kurz estimates there are at least 20 brands of energy drinks already in the market, but few of them ever stay on the minds of consumers. "Brands are coming and going, and there are just a handful which are stable in the market and which manage to maintain a certain lifecycle," she says. "Those which don't die after one or two years." The big carbonated drinks brands, Pepsi and Coca-Cola, have also tried to tap into the energy drinks market, with Amp and Burn respectively.
Burn was launched in the UAE in 2007, followed by other GCC markets, and has seen "growing" sales, according to Antoine Tayyar, the public affairs and communications director for Coca-Cola in the Middle East. Mr Tayyar says the region is a potentially lucrative market with its large population of young people, the demographic that typically gravitates to energy drinks. Add to that the hot arid weather, where a cold alternative to coffee is attractive, and there are the perfect conditions for his company's product.
"In this part of the world, with the potential of youth that is available, with the kind of temperature and environment that you have around, this is a market that is poised to be growing," says Mr Tayyar. email@example.com
Updated: May 11, 2010 04:00 AM