You snap the cap, raise the can to your lips, take a great, long sensuous swig, and within a few minutes or so, feel this incredible surge of life coursing through your nervous system. You then observe the writing on the container – the part that says “energy drink” – and wonder to yourself, ''wow, what’s in this stuff?''
Centuries after coffee houses in London were the main social gathering places – coffee being the sinful drink of the day – the market for beverages that offer customers a little pick-me-up (legally) has become large and lucrative. Aside from providing drinkers with food energy, the kind that lasts for hours afterward, energy drinks give them that short-term buzz that increases alertness, to aid in finishing that task or simply to feel less blah than they did before taking the drink.
How lucrative, you ask? Sales of energy drinks hit the $5.4-billion U.S. mark in 2007, with researchers Goldman Sachs and Mintel both predicting that it will hit $10 billion U.S. by 2010.
Those who use the product are, by and large, between the ages of 13 and 35, and the advertising for the product is so youth-oriented (“extreme”, you might call it, as in the sometimes “extreme” sports in which some users engage), the larger drink manufacturers have had their hands full keeping up with the smaller, niche-market companies that have made energy drinks their bread-and-butter. Red Bull, for example, is the dominant market brand in the United States (47% market share on these shores), though its parent company is based in Austria.
And then, there is RockStar, made by a company out of Las Vegas, which purports to be the most powerful energy drink, containing guarana, gingko and milk thistle, aimed at “those who lead active and exhausting lives – from athletes to rock stars.”
But Red Bull and RockStar are both made by private concerns, so any profit is theirs to make and theirs to keep. As mentioned before, big fizz concerns such as Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP) are also active players in the energy drink derby. Coke has among its brands, 'Sprite 3G', aimed at locking horns with Red Bull in the U.K. market. But their main entry into this lucrative arena is their Full Throttle brand energy drink. The Company also launched 'Relentless', a juice-based energy drink in 500-millilitre cans. Coke’s main competitor, Pepsi also has its hands all over its AMP energy drink.
Nor must we forget Corona, California-based Hansen Natural Company (Nasdaq: HANS) with a whole line of products under the Monster banner – energy drinks, energy shooters, coffee drinks – not to mention energy libations named Lost®, Rumba®, Samba and Tango.
Seattle-based Jones Soda (Nasdaq:JSDA), carries the provocatively titled Whoopass Energy Drink (“Revitalizes Attitude and restores faith in mankind”, quips the writing on the large, 473-ml can), in addition to a battery of sodas and fruit-based drinks.
All the above companies are making waves and are dominating the market, but micro-cap investors should take note of another Company quickly making inroads into this expanding market. EQ Labs Inc. (PINK SHEETS:EQLB), also a Vegas-based company, whose flagship product is the EQ Smart Energy Drink® is all about thinking outside the can.
The EQ Smart Energy Drink product is a thin effervescent tablet sold in foil packets of individual tablets or either tubes of six tablets. Essentially, one can place a tablet or tube of this product in their pocket or purse and immediately have an energy drink available in the short amount of time that it takes for the tablet to dissolve. Not only is the product quick and convenient for consumers, it’s also easy on the waist size, as a single tablet of EQ Smart contains no sugar and only has five calories per serving all while offering the equivalency of one can of any competing energy drink on the market.
EQLB's formula was invented to consist of FDA-approved ingredients that are not as harsh or overbearing as some of the energy drink products on the market, and has been dubbed the "Smart Energy Drink."
EQ is so confident that its product can make a mark, it’s offering the product in free samples, over the Internet, in an aggressive marketing campaign beginning in the spring, a campaign the company claims reached more than half a million prospective customers. Other marketing coups have included a hook-up with weightlifting champions for product endorsements, and the odd pro athlete here and there. Other brand awareness ideas included the EQLB’s sponsorship of a charity golf tournament in the Tampa area in June.
EQLB scored a major distribution coup in April, by hooking up with 7-Eleven convenience stores throughout the U.S. A formal distributor relationship already exists between EQ and 7-Eleven's distributors, Texas-based McLane Distributors Co., one of the largest U.S. convenience and grocery store distributors in North America. Other distribution agreements signed recently included the Rite Aid/GNC chain of stores. EQ Labs LLC is also presently engaged in formal dialogues with other national distributors that will result in product availability in 80% of the Top-100 convenience stores and three of the Top-5 retail pharmacy chains by the end of 2009.
In May of this year, EQ Labs announced that its drink had been approved for consumption in Mexico by that country’s Ministry of Health and has received its formal product registration in Brazil.
EQ Labs, Inc. experienced its 52-week highs and lows within a matter of days, topping 25 cents a share on May 12, dipping down to only six cents three days later. EQLB currently trades somewhere in the lower regions of that range, at around a dime per share.
The energy drink industry is experiencing highly “stimulative” growth, and not just because of the contents of its cans, bottles or pouches. When consumers need that little extra to proceed through their day, more and more of them are reaching for an energy drink, sending the proceeds from the sales of such drinks into the billions of dollars. It’s something investors – big- or small-cap – ignore at their peril.
AllPennyStocks.com
