Energy Drink Makers Turn to Natural Botanical Ingredients

Photo © iStockphoto.com/mirjanajovic

In a ready-to-drink (RTD) market where soft drinks are struggling, why are energy drinks doing so well? After all, soda is demonized for being sugar-high and unhealthy-but consumers don’t necessarily consider energy drinks that much better for them.

Based on a recent survey, market researcher Mintel reported that fully two-thirds of energy drink buyers “are concerned about the negative effects of energy drinks and shots.” Even so, Mintel notes, “that doesn’t deter them from consuming energy drinks.” Sales are resilient, even amidst negative energy drink headlines-like in 2012–2013 when U.S. lawmakers began looking into safety concerns, such as marketing to children.

“Energy drinks have a very loyal consumer base,” explains Elizabeth Sisel, Mintel beverage analyst. “Even energy drinkers likely became wary of the category while there was negative media attention surrounding its safety, which is why we see the category’s sales growth was the smallest in the time when that negative scrutiny was present. However, once the spotlight was off, consumers likely returned to their normal drinking habits.”

So, why the soft spot for energy drinks?

“Energy itself is the reason,” says beverage expert James Tonkin, founder and president of consultant HealthyBrandBuilders. “We live in a stressed-out, ‘get it done now,’ ‘go go go’ environment today.”

And it’s really as simple as that. We’re tired, we need energy support, and that is why drink giants are thriving. Leaders like Red Bull (whose value last year eclipsed $7 billion) and Monster (now partially owned by Coca-Cola) report that sales are soaring. In its most recent financials, Monster cited 19% net sales growth in Q3 2015 alone-that's $757 million. With numbers like these, Mintel expects the U.S. energy drink market to grow 52% by 2019. Energy drinks are now growing at a faster clip than sports drinks and ready-to-drink tea (but slower than bottled water and ready-to-drink coffee). By contrast, growth in fruit drinks, carbonated soft drinks, and “value-added water” is on the decline, the market researcher reports.

Are there any chinks in the armor? Worries over what’s actually in these drinks are telling. Driven by concerns about popular drink ingredients like synthetic caffeine, there is a segment of shoppers looking for natural ingredients they perceive as healthier, such as natural-plant-based-sources of caffeine. Mintel estimates that 30% of energy drink users now consume “natural” energy drinks and shots.

“This is a potential growth area that we are watching, and many well-known brands, from juice to coffee to tea (V8, Starbucks, AriZona) have natural energy drink products,” Sisel says.

In a recent article for Nutritional Outlook, market researcher Innova Market Insights pointed out that Red Bull and Monster released their versions of “healthier” options, such as Red Bull’s Total Zero or Monster’s Energy Zero, both with zero calories and zero sugar. Mintel mentions Monster Energy Unleaded, which contains no caffeine. Monster is also targeting the sports nutrition market with Monster Energy Shakes with protein, Innova said.

Tonkin mentions some common energy drink ingredients that are good candidates for natural replacements. “Taurine is very overused and if folks knew more about it, they perhaps would stop drinking traditional market-leading drinks. Guarana and glucuronolactone are two other ingredients that have been in traditional energy drinks and can and should be replaced by healthier alternatives,” he contends.

Other ingredients mainstream in energy drinks are B vitamins, ginseng, Ginkgo biloba, L-carnitine, sugars, and antioxidants. Innova Market Insights says that as of October 2015, guarana is still the top-selling natural alternative for energy drinks and now in one out of every four new products launches. Ginseng is next in line. Innova says the ingredient increased market penetration nearly 10% last year. Selling farther behind for now are green tea and other tea extracts, “natural caffeine,” and yerba mate.

Whether natural sources of caffeine are more beneficial than synthetic caffeine (such as providing a more-steady supply of energy minus the energy “crash”) is up for debate, but another undeniable advantage of a holistic, plant-derived energy source is the benefit of other phytochemicals intrinsic to the plant.

Let’s look at some of the botanical-based energy options on the market today.

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Natural Caffeine Sources

Unwittingly or not, even as consumers look for natural energy sources, they still are drawn to those containing caffeine, and for good reason. “Caffeine works!” says Jackson Zapp, vice president, innovation, Applied Food Sciences (Austin, TX). “No other botanical remedy has the same efficacious result that caffeine has on consumers.” This is the primary reason energy drinks are so resilient, he says. Unlike with other products with long-term benefits (think immune health, or antioxidants), consumers can feel the boost from caffeine now.

“Caffeine is and will be an excellent source of energy because consumers can really feel it physically,” agrees Leslie Lannebere, business manager, Naturex (Avignon, France).

Guarana berry, green tea, and yerba mate are still the top natural-energy sellers that do contain caffeine. “Having a natural source of caffeine from guarana, yerba mate, or kola nut is definitely the best alternative to avoid caffeine media scrutiny because these botanicals are familiar in some extent to consumers, they provide a good image playing with ‘intuitive functionality,’ and they also provide a large spectrum of other components, such as polyphenols that-combined with caffeine-are responsible for enhanced benefits demonstrated in some clinical studies,” Lannebere adds.

Take green tea. Green tea offers numerous health boons beyond caffeinic stimulation. “Green tea–derived caffeine is probably the best source because it naturally contains some L-theanine, which can take the edge off the caffeine ‘jitteriness,’” says Brien Quirk, director of R&D, Draco Natural Products (San Jose, CA). “Green tea also contains a small amount of caffeine-related xanthine alkaloids with energy effects, such as theophylline and theobromine. [Tea catechin] EGCG might also increase some brain-stimulatory neurotransmitters through the COMT [catechol-O-methyltransferase] pathway.”

Green tea extracts are not just reserved for tea-flavored products anymore, Zapp points out. Given the popularity and consumer familiarity of green tea, but also given the "oversaturation" of tea-flavored beverages like iced and cold-brewed teas, "this may be why brand makers are reaching out to us seeking the same familiar benefits from green tea, only in the form of extracts that can be formulated into any flavor of shot or style of energy drink,” he says. “In other words, by using an extract, beverage makers are no longer limited to the scope of flavor that would otherwise be associated with the individual type of botanical.”

Rikka Cornelia, product manager, BI Nutraceuticals (Long Beach, CA), which supplies both whole powders and water-soluble extracts, adds, “Some green tea extracts provide very little flavor or color, which is ideal for flavored waters or lighter beverages, while in other cases, the flavor and color added from a green tea powder enhances the overall beverage.”

HealthyBrandBuilders’ Tonkin says green tea is a very promising natural-caffeine option. “Green tea extract is a great and natural source of energy that has lots of runway if marketed correctly and against the synthetic and otherwise less-healthy alternatives in energy drinks."

FutureCeuticals (Momence, IL) points to increased interest in its patented, organic Coffeeberry extract. Andrew Wheeler, director of marketing, says the company produces Coffeeberry from the whole coffee fruit in order to capture a spectrum of nutrients. “We intentionally manufacture this product from the whole coffee fruit, rather than utilize a waste stream of the decaffeination process or from green coffee beans, because of the beneficial nutrients contained outside of the bean in the fruit,” he says. “All other sources of coffee caffeine will not have the higher levels of chlorogenic acids and trigonelline from the whole coffee cherry. The difference between bean-derived caffeine and whole coffee fruit–derived caffeine are vast in terms of nutrition.”

“The benefits of whole food definitely apply to caffeine, as well,” he adds.

In line with whole food, more than one supplier points to the promise of guayusa. Years ago, Nutritional Outlook reported on this close relative of yerba mate, which yields less caffeine than coffee but more than green tea. In addition, it contains beneficial polyphenols, fiber, and amino acids. Tonkin says that guayusa, along with yerba mate, is “gaining traction, albeit slowly.”

“Guayusa has been the most talked about ingredient for energy,” says Ramon Luna, marketing, Ecuadorian Rainforest (Belleville, NJ). “The benefit of guayusa over coffee is the amino acid L-theanine. L-theanine has a soothing effect, which, when combined with the caffeine of guayusa, gives off a sustainable rush of energy that won’t leave you with jitters in the end like coffee,” he says. (Yerba mate, too, provides this “gentle energy boost," while supporting memory and alertness, he adds.)

“Guayusa has a unique blend of caffeine and other polyphenol content that presents a novel footprint in the energy market,” says Applied Food Sciences’ Zapp. “Guayusa has been dubbed a ‘focused energy’ based on anecdotal experiences of those synergistic benefits.”

Guayusa’s “subtle, earthy aroma” may also blend in better with an energy drink because it doesn’t contain the bitter-tasting tannins that are part of green tea and teas in general, Cornelia contends.

In addition, last year, Nutritional Outlook reported on another promising botanical, yaupon holly. As the only caffeine-containing plant to hail from the United States, this botanical is still obscure in the energy space, but is one that Mark Blumenthal, founder and executive director of the American Botanical Council (Austin, TX), dubbed “the most interesting right now.”

As discussed, natural sources of caffeine can be successful, and if you’re going to use a caffeinated source, it’s best to do so transparently, Zapp says. “By making it healthier, more natural, and more transparent, beverage makers understand this is how to create growth in the energy market of today.”

And if these sources don’t provide enough of a boost, drink makers can always kick it up a notch. “If desired, manufacturers have the option to add either synthetic caffeine or natural caffeine extracted from coffee to boost the overall caffeine level,” says Cornelia.

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Non-Caffeinated Sources

If your aim is a non-caffeinated formula, there are options there, too.

“Borojo is an ingredient from Ecuador that is perfect for a quick energy boost,” says Ecuadorian Rainforest’s Luna. “Borojo was traditionally used by Embera Indians in Colombia to increase their stamina. Borojo is a great source of many B vitamins as well as phosphorus, making it a great ingredient for energy.”

You can also drive attention with still-emerging energy-drink ingredients like maca, says Naturex’s Lannebere. “Botanicals such as maca or Panax ginseng start to be familiar to consumers-while still being pretty new-and offer numerous possibilities in terms of combination with innovative flavors and are easy to use in formulation, with a limited organoleptic impact,” she says. Innova Market Insights points to Rebbl’s Super Herbs Maca Mocha Coconut Milk Elixir, launched last summer for "re-energizing" benefits.

Nutraceuticals International Group (Paramus, NJ) offers a natural bioflavonoid complex it calls Watts’Up. Managing director Jamie Spell says the ingredient’s citrus flavor and bioavailability lend themselves well to energy drinks.

Adaptogenic herbs also support energy, while combatting stress. “We have seen a huge increase in sales for astragalus extract, rhodiola, eleuthero, goji berries, and green tea,” says Draco’s Quirk, checking off a list of some of the most common adaptogens. “In traditional Chinese herbal medicine, these are all vital energy (Chi) tonic herbs, which have stood the test of time.”

The company supplies numerous extracts that align with the goals of Chinese traditional medicine, such as “yang” and “qi” tonics. “Yang tonics are the energizing side of the yin and yang foundation of a person’s constitution and do not contain caffeine,” Quirk explains. “They are believed to increase attentiveness and are known to stimulate brain activity, according to modern science. Some examples include cynomorium, eucommia, cnidium, dodder seed, and epimedium. Most people think of epimedium as being just a libido tonic, but it has proven benefits to work like ginkgo and increase blood flow to the brain.”

HP Ingredients (Bradenton, FL) promotes the energy-boosting benefits of another known libido-boosting adaptogen, tongkat ali. CEO Annie Eng explains that by increasing testosterone levels, tongkat ali can also increase overall energy levels.

Of course, if using a more obscure ingredient in an energy drink, it is important to ensure the ingredient is approved for beverage use, such as Generally Recognized as Safe in the United States, Quirk adds.

Organic Ingredients

Along the lines of “more natural,” organic ingredients are seeing more demand in energy drinks. Even Rockstar is getting into the action, recently launching its Organic Island Fruits energy drink with organic sugar and caffeine from organic green coffee beans, says Innova Market Insights.

“The consumer will undoubtedly start questioning the long ingredients list in their energy drinks and start to question whether those ingredients are organic or even natural (i.e., not from synthetic sources),” says Saumil Maheshvari, market analyst for Orgenetics (Brea, CA), which supplies USDA certified-organic vitamins, minerals, and antioxidants. “I think this year we’ve started to hit that critical juncture where the consumer is starting to question and is looking for a healthy and more natural and organic alternative to their beverage choices.”

Orgenetics offers several ingredients keen for this space, including organic green tea extract. Orgen-B-organic B vitamins from organic mango, lemon, and guava-is appealing "since it’s nothing more than a standardized fruit extract,” Maheshvari says. And Orgen-C, organic vitamin C from organic amla fruit, is also a good candidate, as are organic antioxidants.

Applied Food Sciences’ Zapp says his company’s organic ingredients are “doing the best business” in this market. Customers are looking for certified organic, due to fuzziness over the definition of natural, he confirms. “Ultimately, there is an uncomfortable truth that, under its current definition, one could extract caffeine from a botanical source with harsh chemicals, yet still net a ‘naturally derived’ caffeine,” he says. “But at what cost?” He says the company’s organic extraction technique ensures these harmful chemicals are excluded, for the utmost in clean labeling.

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Broadening Consumers’ Minds

Natural sources of botanical-derived energy hold lots of promise, if not for today’s consumer then for tomorrow’s, who will one day come knocking for healthier options.

It's happening already, says Draco's Quirk, and not just in the United States. “We have seen huge sales growth of energy drink requests using botanical extracts in flavored, ready-to-use formulations, and in particular a large number of requests coming from Asian countries such as China, South Korea, and Japan. This does show growth in using natural energy-boosting ingredients instead of relying on caffeine from conventional, single-ingredient energy boosters such as high-caffeine beverages like coffee, tea, or colas.”

Ensuring those ingredients work is the key to success, reminds HealthyBrandBuilders’ Tonkin. “Consumers do want great taste and efficacious dosages of their ingredients so they feel the effect. If that doesn’t happen with things other than artificial stimulants, the new-ingredient profiles lag."

"On the other hand," he says, "if they work and are healthier alternatives, it’s a natural win-win. My vote is in that direction, for sure."

Also keep in mind that many of these botanicals may be new to consumers, so some education may be needed. “Botanicals are wonderful but unfortunately very new and relatively unknown to the majority of ‘blue collar’ consumers, the crux of the purchaser of energy drinks today," Tonkin says. "Therefore, products that include green tea extract, coffee extract, ginseng, baobab, maca root, ashwagandha, and other botanicals and herbs will have to put gobs of money and marketing horsepower behind them."

On the plus side, don’t forget that these botanicals often have a sexier story to tell (versus being synthesized in a lab) and marketers can use tales of traditional use and exotic origins to their advantage. Carol Cheow, general manager, sales and marketing, Cactus Botanics (Shanghai), says the company’s herbal formulas for energy drinks are backed by a thousand years of traditional use. “Countless people over the years have confirmed the efficacy and safety of these formulas,” she says. “They have been recorded in the classic of Chinese traditional medicine. We only need to walk along these roads.”

Finding new ingredients for energy drinks beyond the tried and true can be a challenge, but it’s definitely worth trying, says Margaret Gomes, marketing director for NP Nutra (Gardena, CA), which offers freeze-derived fruits and vegetables for energy drinks.

“Yes, it is difficult to find new ingredients for energy drinks or any functional beverages,” she says. “The texture, flavor, and color need to combine together, taste good, and look good, too. Some ingredients don’t blend well with others, or the colors don’t mix. All these factors are very important to the end product and to the consumer.”

But if you get the mix right, you might just get to taste some of the success washing over energy drinks today.

* 2/17/16 Correction: On page 2, Andrew Wheeler's quote was corrected to read: “All other sources of coffee caffeine will not have the higher levels of chlorogenic acids and trigonelline from the whole coffee cherry."

Also read:

Which Flavors Are Trending in Energy Drinks?

Energy Shot Sales Are Slumping. Do Energy Shots Still Have a Chance?

Natural Ingredients for Energy Dietary Supplements

Who Is the Energy Drink Customer?

The answer might surprise you. As Nutritional Outlook wrote back in June, Mintel reported that the highest users by volume aren’t frat kids kicking back on a Saturday night; they’re older millennials (27–37 years olds)-and, more specifically, older-millennial parents.

“As shocking as it may sound, a higher proportion of U.S. households with children are consuming more energy drinks compared to those without children,” Mintel said, pointing out that most energy drink marketing runs counter to this by targeting younger consumers.

Mintel estimates that 65% of older millennials use energy drinks and that 58% and 48% of U.S. households with children consume energy drinks and shots, respectively, compared to households without children, of which 27% and 18% use energy drinks and shots, respectively. Fathers are the highest users, with 68% of fathers consuming energy drinks, and 65% of older millennials deem energy drinks better substitutes for coffee.

Mintel also points out that 74% of these older millennials are concerned about negative effects of energy drinks, compared to 65% of energy drink consumers overall. This gives marketers even more reason to take a second look at their ingredients of choice-especially because, as Sisel points out, “Our data show the older millennial consumer segment displays more brand loyalty and potential for long-term usage.”