MARKET RESEARCH Natural Energy Drinks

Volcano

UNLEASH THE BEAST WITHIN

Trends in the Market

About 130 energy drinks are available in US. The energy drinks make up for 6% of the nonalcoholic beverage industry. By the year 2001, the US energy drink market had grown to nearly 8 million per year in retail sales. Over the last 5 years, it grew an average of over 50% per year, totaling over $3 billion in 2005. Diet energy drinks are growing at nearly twice that rate within the category. Both Goldman Sachs and Mintel predict that the energy drink market will hit $10 billion by 2010.

Category Growth Heroes

% Chg
Bottled Water, Non-Bulk Still Sports Drinks Cold/Allergy Tablets

$591 $253 $216 $174 $159 $154 $109

...... 25% 21%

13%

Repeat

Energy Drinks

Rfg Side Dishes + Pkgd Fruit/Veg RTD SS Tea/Coffee Frz Multi-Serve Dinners Cold/Allergy Liquids Facial Anti-Aging Nasal Products

67% .37% 20%

$57

.. 13% 12% $70 ..... 19%

$71

Source: InfoScan Reviews, Total U.S. FDMx, CY2005 vs. prior year

Beverage Food Non-Food

14%

MAJOR MARKET PLAYERS

Potential in Indian Market

A buoyant & growing economy Consumers turn to healthier beverages Rise in spending power spurs on-trade sales Sales of energy drinks via supermarkets/hypermarkets increasing The power of celebrity endorsement remains undiminished A changing profile of a differentiated set of consumers

Potential in Indian Market Contd.

At present, only imported energy drinks are available in India. Though markets in India are relatively new, an estimated 9,00,000 cans are consumed every year. Austria's Red Bull, world leader of the energy drink market, dominates the Indian market too (95%), and has become popular since its 2003 launch. Today, people are leading a very hectic lifestyle, trying to pack in 25 hours in a day. There is, however, a limit to what the body can take, and that is the reason for demand for energy drinks. Also energy drinks are used in cocktails at clubs, and with the mushrooming of clubs and bars all over, there is a huge market potential.

Main Competitor : Red Bull

Red Bull was founded in 1984 by Deitrich Mateschitz and Chaleo Yoovidhya, is headquartered in Austria. Red Bull is leader in the energy drink segment and enjoys more than 85% of market share worldwide with sales more than 3 billion cans. It is spread over more than 130 countries. The company promoted the directly to Generation Y, who were believed to be cynical of traditional marketing strategies. Part of this idea involved recruiting 'student brand managers' who would be used to promote Red Bull on university campuses. Its mission is to establish brand standards while maintaining the leadership position in the Energy Drinks category when delivering superior customer service in a highly efficient and profitable manner.

Methodology
Primary Research though questionnaires in person. Secondary Research for understanding competition and potential.

Our Target group

Middle and Upper middle class people belonging to the age group 17-35 yrs Party going Sports loving Alcoholic/ Non alcoholic beverages Indulge in adventurous sports

Q. Ability to capture soft drinks market share

f priced ri htly Yes ould your ener y drink replace your soft drink intake at least to a certain extent

ntake of ener y drink ould increase but that of soft drink ould remain the same. Any other

Profile of the Respondents

Categorization on the basis of age

Categorisation on the basis of age

Years

Location of the Respondents

Location of the Respondents

ast est o th
ast est o th o th

o th

Categorization on the basis of Income

Categorisation on the basis of income
K abo e K

K K K

abo e

Inference: Only 12 % of the respondents belonged to the income group of between 0-25 K / month.

Have you ever tried an energy drink?

Have you ever tried an energy drink?

Have you ever tried an energy drink?

Reasons offered for not trying an energy drink.

R eas ons Hig hlig hted for not trying
6 4 2 0 R ea s ons H ig hlig hted for not try ing

. ..

. ..

b. ila va N ev er

no

tk

ar e

he

ta

fe

lt

. ..

Which all energy drinks have you tried?

E nerg y Drinks tried
18% 6% 12% 64% No ed B ull P ower H ors e G a tora de

Are you a frequent drinker of energy drinks?

A y uafre u n d k ro e e yd k ? re o q e t rine f n rg rins

6% 13% 25%

D id not liik e the tas te s teeply pric ed

e s o

not available nearby 56% don t think they c an ac tually pac k a punc h

Taste
How do you find the tas te?
S our & S weet Tonic S trong B itter S weet 0 9 17 11 8 6 10 20

Pricing
in ricing n rg rin

ig

Pric r Pric

n r Pric n

Pricing contd.
o r ric d t n ic o t o o ing ric r ng t rig t ric t in c n do o

o r o t r ng t

ric d t n ic o o ing ric do o t in c n rig t ric

Impact of price on sales

I f pr i c e r i tl o l o r ener r i n es pl ac e o r s of t re r i n i nt a e at l eas t t o a c er t ai n e t ent

I nt a e of ener o l i nc r eas e r in o l of s of t

r in t t at

r e ma i n t e s a me n ot er

Preferred uses of the product

f ou re fre ue t user h ch of the fo o ou prefer to t e the dr s tu t o s ou d

efore or fter o to

efore or fter o for outdoor sport

pu or htc u

he co su coho poss th t

o e of these

How did you get to know about energy drinks?

30 25 20 15 10 5 0

S eries 1

ri. ..

. ..

...

an

t( p

of

en

ts

rti s

s,

Ad

er

Pe

Su

pe

ve

rm

ar ke

em

or d

An

ot

he

r.

Demand for flavors

o ld o refer o r ener flavors drin o ome i more

o ld o refer o r ener drin o ome i more flavors

es

an sa

Sizes being looked forward to

i all sizes wo ld o refer o r energ drink to o e in

all sizes wo ld o refer o r energ drink to o e in

an t sa Size

Comparative Analysis
Natural energy drink These are made with completely natural ingredients such as natural herbs, spices and mellow natural sweeteners organically combined together with some amount of caffeine. Energy drink Some contain high levels of sugar, while most brands also offer an artificially sweetened version.

Product
Volcano would be launched in two flavors: one classic and one fruity with grapes/orange flavor. It will be packed with vitamins, plant source minerals, phytonutrients, organic aloe and organic green tea. Promises an energy kick lasting for hours on one can. It can be drunk in virtually any situation: at sport, work, and study. Improves performance, especially during times of increased stress. Improves concentration and reaction speed. Stimulates the metabolism.

Product Characteristics

Product Characteristics

Positioning
For people who are frequent visitors to Nightclubs and pubs As a brand which is attached with sporty events. As a brand associated with natural energy source.

Promotion
Buzz marketing Mobile Vans / Road Shows Sponsoring adventurous sports events. Free Samples distribution at places frequented by young guys. Viral marketing through blogs and social networking sites. Association with various health programs like creating Aids awareness and sponsoring other health camps.

Promotion : Caffeine is not an issue

Place Distribution

Price
Classic Pack will be priced as follows 1. 300 mL = Rs 50 2. 500 mL = Rs 85 Fruity Pack will be packed as follows 1. 300 mL pack @ Rs 60 2. 500 mL pack @ Rs 95

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