Are energy drinks the next big thing in the restaurant industry? The carbonated beverage with silly names such as Reload, or Beaver Buzz and Bro Water, (you guess which one of those is made up) has been in restaurants for some time, but they seem to be generating more buzz as of late. In the past, diners could find energy drinks in full-service restaurants on the drink menu, notably, Red Bull, but now they’re making their way into the quick service space in new ways.
Dutch Bros, for instance, is increasingly becoming known for its line of energy drinks called Blue Rebel, which accounts for 24% of its total sales. The drinks, which come in flavors like “After Shock” and “Double Rainbro,” debuted in 2012, making the coffee chain early to the energy drink game. And Dutch Bros, which was ranked 50 on Restaurant Business sister publication Technomic’s 2023 Top 500 list, is growing. The chain saw a 27.3% increase in sales in 2022 and a 24.7% increase in unit count to 671 units, according to Technomic.
Energy drink consumption is also growing. The energy drink market is estimated to hit $114.70 billion by 2030, according to Prophecy Market Insights.
And energy drinks aren’t limited to just coffee chains anymore. Taco Bell, also recently launched a test of Baja Blast flavored energy drinks—one is classic Baja Blast flavored and comes in a can while the other has an added swirl of sour strawberry.
In 2015, McDonalds teamed up with Monster to offer a test of the beverage in 20 stores. In 2019, Sonic Drive-In added Red Bull slushes to the menu. They’ve returned each summer for the past five years. In addition, the chain recently rolled out a new beverage platform with Red Bull featuring flavored Red Bull rechargers. The drinks come in three flavors—Twisted Lime, Dragon Fruit and Blood Orange.
“The brand has always looked for opportunities to introduce new, craveable beverage flavors that fans will love. We had been looking to add an energy drink option to the menu for several years but wanted to find the right brand partner to get customers interested. We did just that by partnering with Red Bull,” Sonic Drive-In told Restaurant Business.
And Panera Bread sells energy drinks in the form of its charged lemonades.
Mich.-based Biggby Coffee which debuted its own lineup of energy drinks in 2022, also expects the market for energy drinks to grow.
“This category in general will grow really exponentially over the next couple of years,” said Biggby Product Development and Innovation Manager Amy Soltis.
While Dutch Bros energy drinks have been around since 2012 on the West Coast, Soltis said the Biggby team noticed a demand for the beverages in the Midwest, and the coffee chain wanted to be the first to tap into that market.
“You know, we saw it kind of happening over on the West Coast, a little bit on the East Coast. And so, as a company, we decided we wanted to be the first ones to bring the concept to the Midwest on a large scale,” she said.
The coffee chain has also seen fair growth lately. Biggby saw sales increase by 21.5% in 2022 while restaurant count grew 18.9% to 334 units, according to Technomic.
“This category in general will grow really exponentially over the next couple of years.” -Amy Soltis, Biggby Coffee's product development and innovation manager.
Customization takes over
Energy drinks are not new to Biggby, which actually began selling Red Bull in 2009, but this new line of drinks allows for customization in a way that the previous drinks did not.
“It’s something that is just new and fun. You know, RTD (Ready-to-Drink) energy has been around for a long time. And after COVID we saw people looking for energy in new ways and new ingredients and new flavors. And being able to really create your own and customize it,” said Soltis.
Biggby still sells its Red Bull energy drinks, such as the Strawberry Punch Red Bull Mocktail or the Kickin Raspberry Red Bull Mocktail, but the energy component behind the new Blast lineup is flavorless, which allows for creative contraptions such as the Green Lagoon or the Electric Dragon.
The Green Lagoon is green apple flavored while the Electric Dragon is made of dragon fruit flavor and topped with a lemon slice. The lineup also includes a build-your-own option where diners can add inclusions like popping boba or toppings like whipped cream and sweet foam.
The ingredient behind the energy is a plant-based caffeine inclusion called Zip.
“It's a tasteless, odorless shot that you can put really into any beverage that we offer,” said Soltis. “It's a product of proprietary products that we already had available in stores. And so, we just really wanted to do something that was very custom to us. The other great thing about Zip is it does allow consumers to customize how much energy they have in their drink.”
The drinks are also vividly colored which taps into another trend—visually appealing products that are great for photographs.
“I think is just really appealing to consumers as well as just those really vibrant fun colors. We know that people love to post what they're eating and drinking on their social media accounts. And this just adds to that excitement,” said Soltis.
Tapping into a new demographic
Whether it’s the bright colors, the goofy names, or the customization aspect, young people seem to love energy drinks. According to a SkyQuest report, 19.4% of young people, between the ages of 18 and 35, regularly drink energy drinks.
But energy drink consumption seems to be increasing with all consumers, not just young people. According to a study published by Elsevier, energy drink consumption has increased sustainability over the last decade among adolescents, young adults and middle-aged adults.
According to Soltis, the energy drink lineup allows for an opportunity to appeal to a different demographic.
“So, we've kind of dove right in and took the new opportunity to tap into kind of a new demographic, you know, skews a little younger, a little more male and really targets that non-coffee drinker,” she said.
Canned energy drinks in restaurants
Celsius recently debuted in select Dunkin' and Jersey Mike's locations. | Photos courtesy of Celsius.
Another avenue where customers are consuming energy drinks is through canned products in restaurants.
Energy drink company Celsius, for instance, recently expanded its foodservice presence with the launch of its drinks in certain Dunkin’ Donuts and Jersey Mike’s locations.
The energy drink company recently teamed up with PepsiCo as a distributor, which Kyle Watson, executive vice president of marketing at Celsius, says has opened up a ton of doors into the foodservice business, particularly through college campuses.
“It gives us a lot of opportunity for consumers to discover us,” said Watson. “And as we're getting into this more lifestyle brand really, us being able to have those opportunities to be you know, in a place like Dunkin’ Donuts or Jersey Mike's where you're really hitting a lot of consumers and they're discovering your brand at a different touchpoint than just in a store or you know, being on social media or new traditional marketing. So, for us it's a great way to really drive trial.”
The brand also hopes to make its way to restaurant chain menus in a similar way in which Red Bull has broken in, through curated mixed drinks.
“So I think there are other opportunities for us with not only having it served in the can, but kind of going into other you know, various ways of actually serving our beverage and having it on a menu at these locations,” said Watson.
The company already has a presence in foodservice with independent restaurants and hotels and is on menus in the form of mocktails and in cans, but still hopes to expand its foodservice presence.
“10% of our Pepsi sales approximately is coming from the foodservice business,” said Jon Fieldly, CEO of Celsius Holdings, according to a transcript from financial services site AlphaSense. “As we look ahead, the distribution opportunities are at eateries and within fast-casual restaurants. We feel there's a great opportunity there and that's really has been untapped.”