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Energy drinks Business

The Indian beverages market, be it beer, vodka, soft drinks or juices, is on the target list of many players. Now, United Spirits Ltd. seems to consider the launch of an energy drink, as Vijay Rekhi, president of United Spirits, was quoted in the media as saying “We are looking at an energy drink which will grow with our vodka brands”.

A market survey in Delhi by FoodIndustryIndia.com reveals that the market leader in the (North-) Indian energy drinks segment is Red Bull, the fancy drink from Austria, which “provide wings”, according to their advertising messages (in Austria, Red Bull-voka mixes are calles “Flügerl” or “small wings”). Boxes with Red Bull are stapled even in smaller shops in local markets. Worldwide, Red Bull has a market share of around 70% in the energy drinks segment.

Several other energy drinks have been launched in the last time or are imported, like the “fighter” brand which is produced in the Netherlands for Virgin Islands’ located company smart drinks ltd., and Power Horse”, a brand imported from Austria. Two others, the “X35” from UK and another energy drink from Austrian Global Beverages plan to hit the Indian market soon.

Whereas in other markets the exact figures of market shares are known, this is not the case in India, as the market is developing. “Exact figures for the Indian market are not available”, says Sandeep Gulla of V K G Management Services, the distributor of the fighter.

The concept of an energy drink and how they are produced is similar to carbonated soft- drinks, and also similar to branded sports shoes, like Nike, for example. Nike doesn’t produce any shoes, the production is outsourced. Instead, Nike sells fitness, or fashion, or whatever is highlighted in their ads. Also smart energy does not produce energy drinks. This company has gone a step further and gets drinks produced on demand, according to the customers requirements. Drinks can be delivered in many can designs and brand names.

The most critical aspect in the energy drinks business is the right promotion, in order to create the right fancy image and link it to an energy drink. Red Bull is doing that through sponsoring car races, by having given its name to a sports stadium in Austria, and extensive ads, especially on TV. It has to be seen what the various players in India will do in that regard. A total different question is whether a new energy drink brand should be created to boost sales of a relatively unknown vodka brand. That seems to be an equation with several unknowns.