Dive Brief:
- 7-Eleven is introducing its own brand of energy drinks called Quake, according to a release. The convenience store chain said its new product combines B vitamins, electrolytes, creatine, coenzyme Q10, branched-chain amino acids and 250 milligrams of caffeine in each 12-ounce can.
- Quake comes in four flavors — Original, Orange Fusion, Tropical Lemon and Berry Blast — and are only available at participating 7-Eleven stores. The drinks are sugar-free and contain no artificial flavors.
- Suggested retail price per can is $2.49, and the company said it has a buy-one-get-one-free offer for a limited time. Tim Cogil, 7-Eleven's senior director of private brands, said in the release the company created the product because customers wanted an energy drink with more benefits than traditional brands offer.
Dive Insight:
As the energy drink space becomes increasingly crowded, 7-Eleven's Quake will need to stand out to be a success. Since plenty of customers come to its convenience stores, they may give the new Quake energy drinks a try.
Quake combines a number of on-trend, better-for-you qualities — including having no sugar or artificial flavors and including electrolytes — so it's likely to tap into consumer demand. But there are reasons besides trendiness and convenience for the company to enter this popular space. The energy drink category has annual sales of $12 billion, with 75% of that sold in convenience stores, according to IRI data cited by 7-Eleven. Quake will have the advantage of getting prime placement in the largest chain in the convenience industry.
Despite the potential advantages, 7-Eleven won't have an easy time fighting off competition from other big-name energy drink producers. Amazon recently announced it was launching its own private-label brand, legacy soda giant Coca-Cola is getting into the space with an energy drink, Keurig Dr Pepper's just unveiled its new Adrenaline Shoc and the leader in the space Monster also just announced a new beverage: Reign.
Although the competition has a lot of big name brands, Quake might be able to steal shoppers with its price. At $2.49 for a 12-ounce can, and a buy-one-get-one-free introductory deal, the product's low cost could win fans right off the bat. However, it's another matter to impress consumers enough to hang onto them.
7-Eleven has been differentiating its offerings for some time with more food and beverage products, so this seems like another step down that road. The chain already offers a lineup of other branded drinks, many of which respond to consumers' grab-and-go lifestyle — organic cold-pressed juices, bottled teas, coconut water and bottled iced cappuccino. Such products helped boost the company's first-quarter revenue by 29.8%, according to USA Today, with close to 14% of all c-store and gas station visitors coming to one of its 9,573 U.S. outlets in April of this year.
The entire energy drink market, however, could be in trouble with research showing they can pose health problems. One recent study found drinking caffeinated energy drinks can raise blood pressure. Other research has suggested links to heart issues. The World Health Organization has said that high consumption of energy drinks "may pose danger to public health."
Lawsuits have been filed against energy drink companies for this reason. Monster was sued in 2012 by the parents of a teen who went into cardiac arrest after reportedly drinking two of the company's drinks in 24 hours. More recently, a California jury found last year Monster energy drinks weren't responsible for the heart attack of an 18-year-old man.
But until there's a legal case costing an energy drink company millions, it's not likely consumer interest will wane, particularly since there are now so many different types of energy drinks with varying ingredients meant for different occasions and uses. It will take some time for the market to shake out, but if Quake is left standing then it could be a lucrative launch for 7-Eleven.