PepsiCo launches Mtn Dew energy drink amid push into functional offerings

Source: fooddive.com

Dive Brief:

  • PepsiCo is introducing a line of energy drinks called Mtn Dew Rise Energy targeted for morning consumers, the beverage and snack giant said in a statement. The drink will be promoted by NBA superstar LeBron James.
  • Each 16-ounce can has approximately 25 calories, 180 mg of caffeine — nearly twice the amount of a cup of coffee — along with vitamins A and C, antioxidants and fruit juice. It also contains citicoline to boost mental clarity and zinc for immune support. 
  • The latest beverage from PepsiCo comes as the company moves beyond its core soda line into functional beverages and energy drinks. Last September, PepsiCo launched a water called Driftwell aimed at combating stress and inducing relaxation. 

Dive Insight:

PepsiCo is taking aim at the morning coffee crowd with its promise of a caffeine jolt and a beverage that touts a mental boost and immune support. 

Fabiola Torres, chief marketing officer of PepsiCo Energy, told CNBC the company knows the energy drink category is crowded, so it wanted to create a product line that would appeal to more than just the typical consumer who buys them. The segment is currently dominated by industry giants such as Monster and Red Bull that hold the lion’s share of the market, but that hasn’t stopped new players from entering the space.

PepsiCo chose to double-down on the category in 2020 when it purchased Rockstar for $3.85 billion and partnered with Bang. Coca-Cola, the world’s largest nonalcoholic beverage company, also has launched its own energy drink loaded with caffeine, guarana extracts and B vitamins. Celsius remains a fast-growing brand. And beer giant Molson Coors Beverage signed an exclusive distribution deal to launch ZOA, a nonalcoholic energy drink made with natural ingredients such as turmeric, camu camu and acerola cherry, as well as vitamins, added electrolytes and amino acids.

The U.S. energy drink sector is one of the strongest performers in the nonalcoholic space. Category sales are projected to more than double from $9.3 billion in 2014 to $19.2 billion in 2024, according to Mintel. 

It’s evident that even with its commitment to stand out and the backing of the popular Mtn Dew brand it’s using to launch the product, PepsiCo has its work cut out for it considering it is not the first player in the functional energy drink segment.

Still, PepsiCo should benefit from the promotional heft of James, an NBA superstar the soda giant recently poached from archrival competitor Coca-Cola. AdAge noted Coca-Cola in January parted ways with James, ending a relationship that began in 2003 when he was 18 years old. PepsiCo said James will endorse other offerings in its portfolio, including snacks.

PepsiCo is best known for its sugar-laden offerings like its iconic namesake soda, but it has been moving aggressively into the better-for-you realm in recent years. It has purchased snack and beverage brands like at-home water carbonator company SodaStream; CytoSport, a maker of protein powders and shakes under the Muscle Milk brand; and created a joint venture with Beyond Meat to develop, produce and market snack and beverage products made from plant-based protein.

But innovation is a key component of its expansion efforts into healthy and functional. In addition to Driftwell, it has launched a line of juice waters called Frutly aimed at teens, which is made with fruit juice, water and electrolytes. PepsiCo also rolled out a line of nonalcoholic cocktail mixers called Neon Zebra designed to appeal to younger consumers spending more time at home.

The new products are part of a push by beverage companies to reach more consumers at more times throughout the day. Coca-Cola, for example, has expanded into teas, sparkling water in Topo Chico, sports drinks like BodyArmor, Coca-Cola with coffee and an energy drink for consumers who want an afternoon pick-me-up at work. PepsiCo is doing much the same thing here: a consumer may not want a Pepsi in the morning, but still crave the caffeine boost and some nutritional benefits while they are on the go.

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