Beverage chains are no longer turning to beverages made with water soaked in dried leaves or ground-up beans in their bid to give customers the jolt they’re craving.
Energy drinks, increasingly popular with younger consumers (and more than a few older ones) have become more popular among beverage concepts looking to caffeinate their sales.
In recent weeks, the coffee and doughnut chain Tim Hortons launched Tims Boost Energy Infusion Beverages along with the energy drink maker Red Bull. Biggby Coffee, the Michigan-based coffee chain that added Red Bull to its lineup in 2009, announced in June a line of new customizable energy drinks called “Biggby Blast.”
“We have dabbled in energy using Red Bull for years,” Biggby CEO Bob Fish said in a statement. “One of the unique attributes of coffee is that you get to design your drink the way you want it designed—a number of shots, what kind of milk or whether you want mocha or vanilla. You are the master of your own palate’s destiny. We saw an opportunity to do the same thing in the energy category.”
The chains are following companies like Dutch Bros that have generated strong sales through energy drinks. The Oregon-based Dutch created its own line of energy drinks called Blue Rebel that these days account for 24% of its total sales. It does more sales of those energy drinks than any other kind of beverage, including hot or iced coffee.
Outside of restaurants, energy drink consumption is soaring. U.S. consumers bought more than $11 billion worth of energy drinks at convenience stores and gas stations, up 14% over the year before, according to Restaurant Business sister company CSP and the market research firm Information Resources Inc.
One of the largest makers of energy drinks, Monster Beverage, has had a monster year in terms of sales, which rose 22% in the first quarter of this year after increasing 20% last year. The category is not expected to get any smaller.
“Energy drinks represent a rapidly growing category,” Starbucks former CEO Kevin Johnson said earlier this year after the company introduced its Baya energy drink along with Pepsico that will be sold at retail. “We believe this new beverage differentiates us, opening up another category in the portfolio.”
The beverage business inside restaurants has been undergoing a massive change, particularly at coffee shops where hot, drip coffee is out and cold beverages are in—most coffee sales at chains like Starbucks and Dunkin’ come from cold beverages. And customers have been increasingly customizing their drinks.
Many chains have used Red Bull partnerships to court energy drink customers./Image courtesy of Tim Hortons.
Energy drinks fit right along with that, particularly as more chains give customers the option to customize their orders. And the drinks resonate with younger consumers. Swig, the Utah-based “Dirty Soda” chain, like Dutch Bros developed its own line of customizable energy drinks.
“It’s a segment that has really taken off,” Nicole Tanner, Swig's founder, said in an interview in May. “It’s probably more for a younger crowd. I feel more of our soda, our sparkling water, is more for your 20 to 50-year-olds. The younger folks maybe go towards the energy drinks. More like your younger crowd. We love it.”
The energy drink, called Reviver, was launched in 2019 and, much like Swig’s entire menu, can be customized—which has become increasingly popular among younger beverage consumers. “Energy drinks are a big deal,” Tanner said. “We customized that.”
Biggby cited the track record of growth in energy drinks in opting to double down on the business with its own branded line, which includes four recipes that have typical energy drink names like “Blood Moon” (mango and blood orange), Electric Dragon (dragon fruit and lemon slice) and “Green Lagoon” (granny smith apple.)
Dutch Bros developed its own energy drink, "Blue Rebel," 10 years ago. It's nearly a quarter of the chain's sales now./Photograph: Shutterstock.
Like Biggby, Dutch Bros sold Red Bull before a franchisee began seeing what would happen if they flavored the drink a decade ago. The chain then decided to create its own Blue Rebel brand, which features flavors like “After Shock” and “Shark Attack” that do not necessarily indicate a specific flavor.
The beverages lure customers all day, which is huge for the chain. No single part of the day generates more than 29% of its sales. “I do more business between 1 p.m. and 5 p.m. than I do in the morning,” CEO Joth Ricci told us. “I love that. It helps with labor, it helps with staffing.”
It remains to be seen to what extent the energy drink boom takes root inside restaurants. But given their popularity with younger consumers, we’d expect more flavors that use words like “attack” or “assault” or “annihilation” rather than “citrus” or “berry.”