In February 2019, Optimum Nutrition announced that 7-Eleven will carry the nutrition company’s line of protein snacks. The announcement came nearly a year after Optimum Nutrition’s parent company Glanbia Performance Nutrition (GPN) attended the 2017 National Association of Convenience Stores (NACS) annual conference to announce it soon would be breaking into the convenience store market.
The strong focus on convenience store sales comes as the public’s demand for on-the-go nutrition skyrockets, especially in the ready-to-drink (RTD) category. Jean Terminiello, Director of Immediate Consumption at GPN, says there are two driving forces behind RTD product development. The first driver is the consumer’s demand for performance needs products, such as protein powders and energy gels, which are consumed pre-, peri- and post-workout. The second is the consumer’s demand for active needs products, such as energy drinks and protein snacks, which are consumed to boost energy or simply get through the day.
According to Terminiello, convenience store customers are a valuable demographic, spending 40% more annually than the average US consumer. However, two-thirds of these customers expressed their displeasure with the current selection of RTD beverages at their local convenience store, which is pushing companies to innovate.
Fueled by this unmet demand, sports nutrition companies attending the NACS conference has become a regular occurrence as industry-leaders like GPN are racing to capitalize on the opportunity. It used to be that sports nutrition products were reserved for athletes and frequent gym-goers, but that has been changing. The market is now seeing casual exercisers and everyday consumers buying these products in droves.
The shift to convenience store sales comes as bulk purchasing at specialty nutrition stores begins to slow. Convenience store revenues are on the rise as in-store sales grew 2.2% in 2018 to $242.2 billion. Those record in-store sales marked the 16th straight year of in-store sales growth, and convenience stores now make up 3.1% of the United States gross domestic product.
The global sports nutrition market is projected to grow 8.42% annually by 2024, mostly in the RTD category. Combined with convenience stores’ year-over-year record breaking sales numbers, it is no surprise that companies like GPN are pushing to diversify their RTD selection in US chains like 7-Eleven, Speedway, Kum & Go, Road Ranger and thousands more.
As more Americans continue to look for healthier food choices, a surprising niche is expected to develop: vegan and plant-based sports nutrition products. A 2014 poll by Harris Interactive estimated that while only 5% of the US population is reported to observe a vegetarian diet, about half of whom are vegan, the number of Americans who stated that they actively look for vegetarian options on a regular basis was a whopping 33%.
In 2015, Denver-based WhiteWave Foods acquired Vega, a plant-based nutrition company founded in 2002, for $550 million on the strength of its year-over-year 30% inflation-adjusted growth rate. Despite the enviable growth, WhiteWave officials commented that they viewed the then-13-year-old Vega as being early in its growth phase. Vega’s success is hardly an outlier. The entire plant-based category is thriving with an estimated $4.17 billion in US revenues as of 2017 and an expected global CAGR of 7.19% by 2025.
While not all Americans are looking to purchase the next wave of vegan and plant-based sports nutrition products, there is still expected to be an increased focus on health and nutrition. Consumers are demanding bold new flavors with more natural sources of caffeine and without added carbohydrates and sugars.
Low carb and low sugar is a trend already seen in other industries. SpikedSeltzer became the first mass-produced hard seltzer in 2012, setting off a wave of product development that resulted in the US hard seltzer category swelling to $550 million annually. Similar innovation is expected in the RTD sports nutrition market. It was just 13 months ago in October 2018 that Optimum Nutrition released their sparkling energy drink with 100 mg of caffeine from natural sources and 5 g of aminos in a sleek 12 oz can.
Next time you walk into your local convenience store, stop by the cold beverages section and see what fun new options are there. Chances are there will be something you have never seen before, and that will likely continue for the foreseeable future.
Sources
https://www.mordorintelligence.com/industry-reports/sports-nutrition-market
https://www.triathlete.com/2015/05/nutrition/9-vegan-sports-nutrition-products_116753
