Ever since the introduction of Lipovitan D in Japan in the 1960s, energy drinks have enjoyed a solid relationship with Asian consumers. Between 2004 and 2009, consumption increased by 14.5 per cent, according to Euromonitor. Last year in Indonesia, it grew by a staggering 572 per cent; annual growth in mainland China has been running at approximately five per cent a year over the past five years, but there is still room for growth as per capita consumption of functional drinks is considered low by global standards. Only two countries bucked the trend: Japan, where an already high level dropped by nine per cent, and Taiwan, where it fell by 16.2 per cent.
Demand is being fuelled in part by an evolving marketing strategy.When the pharmaceutical company Taisho brought Lipovitan to market in 1962, it was presented as a supplement to boost work productivity. More modern messaging has been aligned to sport, sometimes the more extreme the better.
Red Bull continues to be perceived predominantly as a party supplement, and indeed its image was given something of a boost last year when traces of cocaine were found in its products. As cases of the caffeine-heavy drink were removed from the shelves in Hong Kong and Taiwan, planners such as Milo Chao at DDB Hong Kong suggested that the potentially damaging incident actually served to "deepen the imprint of the brand essence and enrich the pages of its brand mythology."
But the majority of brands are seeking to distance themselves from images of unnatural, turbo-charged living, instead emphasising equilibrium. Functional drinks consultancy Zenith International predicts an ongoing trend towards "healthy energy", and campaigns from the past 12 months reflect that. In Malaysia and Singapore, Fraser and Neave's 100Plus brand features the tagline 'Outdo yourself', with TVCs showing a range of physical endeavours. In China, M&C Saatchi Shanghai is positioning Pocari Sweat as a restorative drink for any time of the day in its campaign this summer.
Focusing on China, Jesse Lin, managing director of DDB Shanghai, says PepsiCo's Gatorade and low-sugar, flavoured water Mizone (known locally as Maidong) from Danone are market leaders that enjoy popularity among China's teens. Mizone's campaigns, which play on the difficulty of living in modern China, have been successful among middle class Chinese families, and Danone says the brand grew by 38 per cent last year.
Leading the pack in China is domestic brand Jianlibao, based in Guangdong, which supplies almost half of the 354.3 million litres of energy drinks consumed in the Mainland last year. By contrast, despite being the most prominent brand regionally, PepsiCo's Gatorade sold approximately 46.8 million litres in China last year, according to Euromonitor.
In a nation where the bulk of sports drinks are bought from convenience stores and consumed in the street, ground-level activation campaigns are a vital marketing component. "There are lots of emerging trends, such as leveraging international sports events to build brand awareness, grassroots events like three-on-three basketball games for getting closer to teens, and tapping into tribes and peer-to-peer culture online," says Lin.
Gatorade has benefited from staging nationwide roadshows that combine basketball drills, competitions, samples and education to capture the attention of the youth market. The approach contrasts with that in more developed markets. In the US, Gatorade recently turned its focus to the world of fashion.
There is fresh movement in other developing markets too, with Coca-Cola ready to launch its Powerade brand in India ahead of October's Commonwealth Games in New Delhi. An official partner of the games, Coke is keen to have a sports drink associated with it. GlaxoSmithKline has also rolled out its Lucozade brand in the market. Both are eager to counter Gatorade's lead. "This is a category where we continue to see large variations across markets," explains Glen Murphy, head of regional client leadership at Nielsen. He points to Vietnam - with a beverage market currently dominated by tea - as another to watch as consumers look for aleternative sources of refreshment.
"Vietnam represents huge potential as the market continue to develop and mature."
Top 10 sports drinks
2 Pocari Sweat
4 Red Bull
10 Maidong (Mizone)
This article was originally published as part of the 2010 Top 1000 Brands report.