Energy drinks

CATEGORY OVERVIEW

• The Indonesian energy drinks market fell by 5%-10% in the past three years from 2016 to 2018. The category comprised powder and the ready-to-drink (RTD) liquid format.
  • Though the total energy drinks market is declining, Nielsen as a global market researcher as of August 2018 show the RTD liquid energy drinks market in Indonesia saw a 10.5% growth, which propelled RTD liquid energy drinks to account for 41% of the total energy drinks market, up from 34%.

• Growing health consciousness amongst Indonesian consumers remained the main challenge facing energy drinks players. The energy drinks are perceived as unhealthy and giving side-effect to the human body like faster heartbeat due to its caffeine content, or even creating addiction. It is also perceived as beverages for doping in sports.

• Regardless of the side-effect issue, there is still room to grow for the energy drinks market since the consumption is considering relatively low now. The consumption was just 2 to 3 times of total population in Indonesia or approximately 530 million to 795 million bottles in a year. Whilst in the neighbor countries like Vietnam and Thailand, the consumption reached up to 10 times of total population.

• To boost volume growth, existing energy drinks players focused their efforts on improving product availability in traditional retail outlets in the hope of reaching out to a higher number of low-income consumers, who are less concerned about their health.

• The other effort to boost the volume is to target the new segment, millennials, considering its big size in the market and its active lifestyle fit with the benefit offered by energy drinks product.

COMPETITIVE LANDSCAPE

• Competition remains tight in the energy drinks market in Indonesia.
  • The main players in the RTD liquid segment are Kratingdaeng, Panther, Hemaviton Energy, Proman, Kuku Bima Ener-G, Sting and M-150.
  • While main players in the powder energy drink segment are Extra Joss, Kuku Bima Ener-G and Hemaviton Jreng. 

• The RTD liquid energy drinks market has been dominated by Asia Health Energi Beverages with its Krating Daeng (Red Bull) brand. As per 2018, Kratingdaeng is the market leader in energy drink in bottle packaging, with 63-65% market share. The company continuously expanded its market share through the sponsorship of sports events.
  • After seeing its sales decline in 2017, Asia Health Energi Beverages once again experienced negative sales growth in 2018.
  • After launched Kratingdaeng Pro in 2016, the company launched Kratingdaeng Gold with a tagline Empower Your Passion in 2018. The new Kratingdaeng Gold (250ml) is aimed at the middle class and above, particularly targeting the millennial generation and office workers.

• Osotspa, the biggest energy drink company in Thailand, has been marketing M-150 as its key brand in Indonesia since 1992. M-150 comes with a proposition as the best in removing tiredness during long work hours.

• Kino Indonesia continued to record positive growth in 2018 when it was the only energy drinks company in the top five that registered positive growth. Unlike the top two brands, Kratingdaeng and M-150, which are only aimed at adult men, Kino Indonesia Tbk PT tries to target a wider age group, namely teenagers, in addition to adult men, through Panther brand.

• Extra Joss from Kalbe is the pioneer in the powder energy drink. The brand offers the benefit to maintain the body’s health, refresh and involve in energy metabolism.
  • Recently, Extra Joss launched a new variant of RTD liquid format with Korean ginseng and Arabian dates to give better benefits to the consumers.

• Kuku Bima Ener-G from Sido Muncul claimed as the pioneer in offering powder energy drink in various taste. Currently, it has grape, orange, guava, mango, pineapple, coffee, original and milk soda variants.

CONSUMER’S CONSUMPTION AND PURCHASE HABIT

• All producers tend to target adult men as their key target market, whether from the middle-income or lower-income segments, through a wide range of format and price segments. The various packages being offered, and advertisements were shown tend to target only the adult male consumer segment.

• A research conducted by Osotspa mentioned that energy drinks mostly consumed in between lunch and dinner time during the day when consumers started feeling tired. While at night, it is also consumed as an energy booster to finish up the works after dinner time.

• Energy drink’s main distribution channels are both modern trade and general trade. Modern trade is mainly for RTD liquid format in a bottle, meanwhile, general trade is mostly for RTD liquid format in cup and powder format.