Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
post

PepsiCo-Starbucks launch Baya Energy drink

Starbucks is stepping into the energy market with Baya Energy, an RTD beverage developed in collaboration with PepsiCo.

Dubbed Baya Energy, the carbonated drink – which launches in the US in March – also contains vitamin C for immune support. 

It comes at a time when the North American energy drink market is seeing high growth, with sometimes cut-throat results.

“The energy and coffee markets offer different value propositions and service different customer occasions. We believe the beverages in each category complement each other,” a Starbucks spokesperson told NutritionInsight.

“Baya Energy is perfect for people who may not have been previously open to energy drinks because of artificial ingredients or for consumers looking for a new boost they can feel good about, with vibrant fruit flavours and caffeine naturally found in coffee fruit.”

Part of an expanding portfolio

Over the years, Starbucks has continued to identify new and exciting ways to expand its RTD portfolio, added Chanda Beppu, vice president, channel development Americas at Starbucks. 

“We saw an opportunity to complement our existing coffee beverage line-up with Starbucks Baya Energy. This is the brand’s first beverage to launch in the energy category.”

Baya Energy contains 160mg of caffeine per 12oz (354ml) can. However, there is no coffee taste. Rather, the three drinks are available in Mango Guava, Raspberry Lime and Pineapple Passionfruit flavours, with each can containing 90 calories and a hefty 22-23g of total sugars.  

Baya Energy stems from the North American Coffee Partnership (NACP), a joint venture established in 1994 between Starbucks and PepsiCo to create RTD coffee and energy products.

“Through the joint venture, Starbucks and PepsiCo continue to bring products to customers looking for premium, high-quality coffee while on-the-go by leveraging Starbucks coffee expertise and PepsiCo’s expansive network and experience to sell and distribute RTD beverages,” explains the spokesperson. 

The latest offering includes fruit juice and vitamin C, which has been especially popular in recent years in light of immunity concerns. 

“By adding vitamin C, which helps contribute to the normal function of the immune system, we’re adding a functional benefit consumers are looking for,” says the spokesperson. 

Starbucks markets this combination of caffeine and antioxidants as giving consumers “a boost of feel-good energy”.

Innova Market Insights also reports that “antioxidant” and “immune health” are among the fastest-growing positionings for North American energy drinks. 

However, the top positioning as of September 2021 remains sugar-free, which features in 48% of new launches. 

Baya Energy is available in US grocery stores, Starbucks stores, convenience stores and gas stations, as well as online.

PepsiCo brings hefty experience

According to Innova, PepsiCo is the market leader for energy drinks in the US and Canada. Between October 2020 and September 2021, it was behind 7% of North American energy drink launches, placing it ahead of other giants like Red Bull and Monster Beverage. 

Additionally, PepsiCo’s launches in this space are growing at an average annual rate of 48.3% (CAGR, Oct 2018-Sep 2021). 

Over the last year, the company has also been honing its focus on functional beverages – especially in the mood and relaxation space. Notable examples include Soulboost for mental stamina and Driftwell for sleep

In 2020, PepsiCo acquired Rockstar Energy Beverages for $3.85-billion. Shortly after, it signed a distribution deal with Bang, one of the fastest-growing beverages in the energy drink category.

Starbucks has also been partnering with other members of industry on RTD NPD, including Arla Foods and Nestlé

Starbucks emphasises that energy drinks are one of the strongest performing and consistent categories in the wider non-alcoholic beverage industry, largely due to consumer desire for functional ingredients. 

However, other giants have struggled in this space. Notably, Coca-Cola Energy was discontinued in North America in 2021, just over a year after its regional launch. 

At the time, the company said: “An important component to our strategy is the consistent and constant evaluation of what’s performing and what’s not. As we scale our best innovations quickly and effectively, we need to be disciplined with those that don’t get the traction required for further investment.”

According to Innova, North America is the biggest region for energy drinks sales value, holding 40% of the subcategory’s sales value. 

It further notes that burgeoning demand for functional beverages, launches with adaptogenic ingredients, such as lion’s mane mushroom, indulgent flavours like dragon fruit or cotton candy, vegan and keto-friendly formats, sugar-free beverages, drinks focusing on immune health and limited editions are boosting NPD across North America.

However, volume growth is currently greater than value growth in the region. From 2017 to 2021, value and volume growth for the energy drinks subcategory averaged 5.1% and 9.8%, respectively.

Looking forward, natural energy ingredients are set to be a key theme for innovation. 

Souce: www.nutritioninsight.com

Spread the love