Sports Nutrition Market Growth
Weekend warriors, health-conscious consumers fuel a growing mainstream market for drinks, bars and related foods for sports and/or nutrition performance and recovery
Consumers are increasingly concerned about health. They also are learning more about the benefits of exercise and they need help coping with increasingly busy lifestyles. For all these reasons, Innova Market Insights can point to increased demand for products designed to aid physical performance. Moreover, many products once viewed as specialty nutrition lines are moving into the mainstream market and manufacturers are giving them a new lifestyle-driven positioning.
Drinks have seen the biggest change in this regard. Sports drinks—once reserved for professional and hard-core workout enthusiasts (before, during and after exercise)—now are casually consumed as refreshment by a broader range of consumers.
Sports and energy drinks accounted for 6.5% of total global soft drink introductions recorded by Innova Market Insights during in the 12 months ending August 2014. Interestingly, new sports and energy drink introductions varied widely by region during the same period—with a more than 8% jump in Europe; and 10% rise in the United States; and a smaller 3.5% increase in Asia.
New product introductions tend to slow as markets mature and consolidate. However, this has been partly counteracted by a growing number of other foods and drinks promoted for sports and/or recovery. Cereal products (particularly bars) accounted for 30% of total global food and drink launches from August 2013 to August 2014 that used a sports/recovery positioning. Other specific category leaders have included sports and energy drinks (28%), other beverages (14%) and dairy products, particularly milk drinks (11%).
Until recently, energy drinks have led sports drinks when it came to rate of new product introductions. Yet that has changed (particularly in major markets) with rising interest in protein content and manufacturers’ growing desire to target more specific consumer groups, need states and/or exercise occasions. However, the sports drink sector does face considerable ongoing competition from other beverages—some of which also focus on added functionality.
The US sports drink market is particularly large and mature and sales growth has been relatively limited during the past few years. It also is highly concentrated and largely shared between the two leading soft drinks companies: PepsiCo and Coca-Cola.
PepsiCo continues to dominate the sports drinks market with its Gatorade and Propel brands, which account for more than three-quarters of sales value, ahead of Coca-Cola’s Powerade with more than a 20% share. Both of these companies’ brands have segmented, with Gatorade now including Gatorade Perform, Gatorade G2 Perform, Gatorade Frost, Gatorade G2, Gatorade Fierce and Gatorade All Stars.
Recently there has been a strong focus on the brand’s sporting heritage and it has a Sports Science Institute working with elite athletes to develop products suited to different sporting needs and occasions. Not only are protein options being added, but different flavors are being developed and trialed. In 2013, a Strawberry Lemonade Gatorade variant was trialed in 7-Eleven convenience stores before being rolled out nationally; and, in 2014 a Fierce Green Apple variety is in tests in a similar approach.
Coca-Cola’s Powerade, meanwhile, has seen ongoing development of its range with its ION4 Advanced Electrolyte System. Powerade Zero Drops flavor enhancers were added to the zero-calorie Powerade Zero range in 2013. The electrolyte mixes in 3oz squeezable bottles can be used to make up about 24 8oz fluid servings. They come in three flavors: Mountain Berry Blast, Fruit Punch and Orange.
Coconut water also is increasingly marketed as the natural isotonic of choice, setting it up in competition with sports drinks. It is made with the juice of young, green coconuts and is already a popular drink in many Asian and Latin American countries. It can be promoted on an all-natural platform, while it also offers many of the isotonic benefits of mainstream sports drinks. It features calcium, magnesium and potassium in a hypo-allergenic format—with no need for additives or even sweeteners.
Coconut featured in more than 4% of all global soft drinks launches recorded by Innova Market Insights during the 12 months ending June 2014. In the United States, it represented nearly 10% of non-alcoholic drink new product introductions, although this does include use of any coconut flavors and ingredients (not just coconut water).
Interestingly, coconut water products mainly sit in the juice drinks market, either alone or in combination with other juices. Looking at the global juice drinks sector, coconut featured in more than 6% of global juice drink launches during 2014, up from 4.5% in the previous 12-month period and from less than 2% five years ago. Looking at the US juice market, more than 13% of new product launches featured coconut and more than 8% of sports and energy drinks also featured coconut water.
Coconut water pioneer Vita Coco still leads the US market. However, that sector now includes the leading soft drinks companies. PepsiCo has a stake in O.N.E. coconut water and it is using brand extension for Naked Juice coconut water and coconut water smoothies. After taking a stake in Zico’s coconut water operations in 2009, Coca-Cola, assumed full ownership at the end of 2013.
As might be expected, product activity has continued apace, particularly in the US, where the relatively well-established market is now segmenting to maintain momentum. Innova Market Insights’ review of launch activity reveals a coconut water variety of Rockstar (a leading US energy drink brand); as well as protein-fortified products, such as Nature’s Best Cocotein and a line of Coco Libre Protein products. Last but not least, coconut water also has appeared in many flavored beverages including combinations with lemonade, espresso coffee, chocolate and even chili extract. Additionally, it appears in items targeted to children.
For its part, Vita Coco moved further into the sports drinks sector in the summer of 2014. Last summer brought its launch of Vita Coco Natural Sport, which is sold exclusively through US Target stores. The five-flavor range features coconut water, sea salt and vitamin C. Natural fruit flavor varieties include Orange, Black Cherry, Lemon Lime, Fruit Punch and, more unusually, Dragon Fruit.
“P” is for Protein
More broadly, Innova Market Insights has seen the US market for sports and protein drinks transition from separate categories into one, larger sports performance market. Again, the sector is moving beyond its traditional core market of bodybuilders. Meanwhile, dairy ingredients and proteins, including milk, also are playing significant roles.
The sports protein beverage market is still relatively undeveloped, but there are high levels of new product activity. An early driver was CytoSport, one of the United States’ largest athletic beverage producers. It launched its Muscle Milk powder for athletes and gym workout enthusiasts back in 2000 and came back with RTD milks in 2004. Although it originally targeted athletes, the Muscle Milk brand increasingly has been positioned as a supplement for the “everyday athlete.” It appeals to the “hip to be fit” crowd. It is also available in a Light variety, targeted more specifically at women.
How big is protein? One example of mainstream market interest involved Hormel Foods Corp., which purchased CytoSport last summer. Officials said CytoSport’s product line complements Hormel’s focus on protein. Meanwhile, the Austin, Minn., company said it was diversifying its portfolio and expanding its offerings of portable, convenient, protein-rich foods. Interestingly, Muscle Milk also expanded its market reach last year with a spring 2014 debut in Germany.
Other mainstream products include Bolthouse Farms’ Perfectly Protein and Protein Plus lines, as well as several high-protein flavored milks (including Darigold’s Refuel), which are marketed as recovery beverages.
In 2012, the market took another key step forward to target more casual consumers and mass market channels. That’s when Coca-Cola made its first direct investment in the US dairy industry and partnered with Select Milk Producers to produce the Core Power high protein milkshake brand. The initiative started mid-year with Coca-Cola signing a deal to distribute the Fair Oaks Farm Core Power brand, a dairy sports recovery beverage. This was followed by a year-end announcement that Coca-Cola was investing an undisclosed sum in the brand to create a complementary value-added nutritional dairy portfolio. This indicated its interest in dairy-based beverages in general, and nutritional and performance lines, in particular.
The Core Power brand was marketed as the first all-natural protein drink with real, fresh, hormone-free milk rather than milk powders or protein powders. It delivers 26g of protein in each 11.5oz bottle, as well as 14g of essential amino acids and 5g of branched chain amino acids. The five initial varieties – Honey, Chocolate, Vanilla, Strawberry Banana and Coffee – all use only natural flavorings.
The Bar Crowd
The market for sports and performance foods continues to lag far behind that for drinks. And although sports and performance new products span a wide range of categories, energy bars comprise the only sizeable market.
Innova Market Insights views sports and energy bars as part of a larger, dynamic cereal and snack bars market. That market is now relatively well established in most countries, particularly in its original home of the United States. Overall growth has focused on more mainstream products suitable for all-day, on-the-go snacking. Meanwhile, sports and energy products sit within the nutrition and performance bars category, which has showed good growth in recent years, but is still relatively undeveloped outside the US. The category includes a raft of other better-for-you products, led by weight management and meal replacement entries.
Cereal bar new product activity has been generally high, reflecting a variety of formats, ingredients and target markets. Interestingly, Innova Market Insights found that 82% of new bar products (worldwide) were positioned on a health platform during a 12-month period ended August 2014. Of those, just 7% were positioned or promoted for sports and/or performance recovery. Looking at just the US market (same time period), 97% of new bar entries had a health positioning and 10% of those products targeted sports performance and or recovery.
The nutrition and performance bars category used to be confined to specialized products for athletes and other active consumers. Moreover, those products were only available at gyms, drugstores and health food stores, or by mail order. Dynamic market growth is largely attributable to a mainstream distribution shift, primarily in the US. Today, these products are much more widely available and consumed on a more casual basis by a wider range of consumers looking for healthy and portable snacks for active lifestyles.
At the same time, snack bars sub categories have become increasingly blurred as health and performance ingredients are added to what used to be more mainstream cereal and granola bars. Meanwhile, more specialized products have adopted a broader health positioning and appealed to a wider audience.
The US bar market has posted strong growth and now includes a range of better-for-you lines, including sports and energy, weight management and meal replacement options. Traditional sports and energy bar market leaders, including Clif Bar, Balance Bar and PowerBar have moved more into the mainstream with an increasing range of options targeted at different need states (endurance, recovery, etc.) and health benefits (performance, added fiber, high protein, etc.), as well as increasingly indulgent and more complex flavors.
The latest new products here tout higher protein levels as well as more focused usage occasions or needs. Examples include Clif Bar’s Clif Kid Zbar Protein, KIND Healthy Snacks’ new Strong & Kind and thinkThin’s new Lean Protein & Fiber Bars. There also are new low-allergen products such as the Zego bar, free from the top eight allergens; and a new variety of Rudi’s Gluten-Free bars with 3g of protein per bar.
In general, Innova Market Insights finds that the sports and nutrition food and drinks sector is, itself, quite healthy. It continues to develop and diversify, particularly in terms of target market. Product developers are considering an increasingly wide range of consumers including those interested in different sports, exercise regimes and levels of activity, also potentially subdivided by age and gender.
Product introductions also are growing with increasing research behind a range of new (primarily) natural ingredients. Meanwhile, marketers are improving consumer communications to promote the benefits of safe, nutritious and efficacious products.