An Energy Shot in the Arm

Upgraded displays and extra-strength varieties boosting the subcategory
5 hour energy

It’s not just for energy anymore. Once limited to a couple of flavors and a single payoff—boosting energy—energy shots today feature a trove of benefits that cater to core and casual users.

Despite the growing variety, however, the one narrative dominating the segment is 5-hour Energy’s continued domination of the category, which leaves little wiggle room for other brands to participate.

And 5-hour is only getting more compelling. Its ongoing merchandising efforts help draw even more attention to the established brand and include a new 5-hour rack with flashy new graphics, a push/pull window cling and additional functionality.

“The rack has been revamped to get more product on the counter,” says Aaron Mace, center-store category manager for La Plata, Md.-based Dash In stores. “The display is two-deep so if we blow through the first rack, our clerks have a fresh shipper directly behind so we never skip a beat.”

For its fiscal year ending Sept. 30, Dash In saw energy-shot sales increase 10% from the previous year, says Mace, whose chain owns or leases 65 stores in Delaware, Virginia and Maryland.

His most recent winning promotion: two single shots of regular-strength 5-hour for $6, saving consumers up to 29 cents. Plus, he’s noticed many tend to buy coffee and Red Bull to fill out their baskets.

Wanting Their Shot

With 5-hour Energy dominating at 91.3% market share in c-stores (based on IRI data for the 52-week period ending Sept. 6, 2015), other brands are challenged to create a c-store foothold.

Some are leveraging the move toward extra-strength varieties, which have surpassed regular varieties in volume. One brand, Eternal Energy 10 energy shot, provides energy and focus for up to 10 hours.

Kiosk Kings Champion energy shots say they provide increased stamina, endurance and mental focus, while Hangover Recovery Shot and Git-R-Done Energy Shot healthy energy shots have built a following by using cable TV pitchman Larry the Cable Guy.

Melrose Park, Ill.-based Convenience Valet recently partnered with BPI Sports on a line of sports-nutrition supplements for fitness enthusiasts and consumers looking to promote healthy living.

“To maintain or grow this subcategory, 5-hour and others have offered new, improved flavors, extra-strength SKUs and new pack sizes,” says Tom LaManna, vice president of merchandising services for Convenience Valet.

Jared Scheeler, managing director of The Hub Convenience Stores in Dickinson, N.D., cites innovation as key in maintaining current users and attracting new ones: “The flavor varieties and limited-edition offerings of 5-hour have done very well, and competing companies have done a good job with flavor differentiation compared to 5-hour.”

Led by berry and grape flavors, extra-strength varieties assume the lion’s share of sales at Dash In stores, says Mace. “We see older millennials buying them for a functional energy boost,” he says. “They will gladly pay more for extra-strength.” (The extra-strength are $3.49, compared to regular-strength shots, which range from $2.99 to $3.29).

But for certain customers, the regular-strength shots are still a viable option. That need state could change, though, and with it the brand landscape.

“Until the category’s growth justifies more space, we’ll maintain our existing linear space allotment, says Scheeler. “If a new item enters the marketplace that we believe will succeed, it will replace the category’s slowest mover.”