Higher demand from convenience stores and other retailers is expected to propel growth
New York, NY (PRWEB) September 19, 2014
The Relaxation Drink Production industry gathered steam over the five years to 2014. Industry operators were able to mass produce their products for the first time during the period, as well as establish distribution contracts with nation-wide retailers. The industry's fast paced growth is due in large part to its novelty; energy drinks have only been in existence since around 2005. Nevertheless, in that time, industry operators have been able to establish brands and grow quickly to capitalize on the market for sleep aid products. IBISWorld estimates industry revenue grew at an annualized rate during the past five years.
There are expected to be over 450 different types of relaxation drinks out on the market in 2014 (up from about 400 in 2012); however, demand is not yet saturated. According to IBISWorld Industry Analyst Will McKitterick, “The market extends beyond those who can't sleep to those who have trouble focusing.” New companies have entered into the relaxation drink market as relaxation beverage producers grow in popularity. As a result, the number of operators is expected to increase in 2014.
Over the next five years, the industry is expected to move into a new phase of established growth. Relaxation drink producers face several challenges that have the potential to derail growth, but barring any significant change in regulation, the industry should capitalize on growing demand for performance drinks in the beverage market. “Regulators may draw up stricter guidelines for beverages, which could force companies to change product formulas or labels,” says McKitterick. However, industry operators will resist any effort to reclassify their drinks under more restrictive guidelines.
The prospect for additional partnerships with or acquisitions by beverage behemoths such as Coca-Cola or PepsiCo is a positive driver for companies in an industry that would greatly benefit from such arrangements. Industry revenue growth will benefit from higher per capita disposable income and greater demand from convenience stores and other retailers. Ultimately, the industry is expected to grow quickly, although somewhat slower than over the past five years.
For more information, visit IBISWorld’s Relaxation Drink Production in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry produce drinks marketed for their relaxation or sleep-promoting properties. Most of these drinks contain the active ingredients melatonin or l-theanine. This industry excludes ready-to-drink tea as well as dairy-based and carbonated beverages.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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