Coca-Cola may launch energy drink by year-end

The product launch comes after the soft-drink major bought 30 per cent stake in Tata group's Energy Brands, which owned the Glaceau brand in May 2007.

Currently, the energy drinks market in the country has only two players, Red Bull and Power Horse, with the former dominating the market. Energy drinks are a type of functional beverage that gives a short-term energy boost when consumed.

A Coca-Cola spokesperson said, "The company is continuously evaluating its product portfolio to provide its consumers with the right beverage solution for every occasion, delivered through the right brand, in the right pack, sold at the right price through the right channel."

Some of the energy drink brands from Coca-Cola's global stable include Full-throttle, Burn, Samurai, Tab energy and Glaceau vitaminenergy. Its energy drinks claim to contain ingredients such as ginseng extract, guarana extract, caffeine and B vitamins.

Some of PepsiCo's brands include Mountain Dew energy drink and Sobe. Currently, PepsiCo is marketing Gatorade, the world's largest sports drink brand that offers re-hydration benefits and carbohydrate energy.

Explaining the concept of functional beverages and its market potential in India and world-wide, Pradeep Poddar, Mount Everest Mineral Water, managing director, said: "Globally, functional beverages are regulated by authorities for containing required daily allowances of nutrients like vitamins. This has led the increasingly health conscious consumers abroad to view water or functional water as a source of nutrition and an enriching experience. We see this trend to happen in India as well."

There are a total of 12 active competitors in the Rs 5,43 crore functional beverages market in India with only two in energy drinks. The functional beverages market is expected to triple to over Rs 1,600 crore in the next six years, says a Frost & Sullivan report.

Sports and energy drinks are a comparitively smaller market and in their nascent stage of growth with a few products, which are available in metropolitan and select cities.

The cola majors are witnessing higher growth in niche segments due to rapid urbanisation and upgradation of living standards by the Indian consumer.

The last big brands introduced by the two companies were in the fruit drink space like Minute Maid by Coca-Cola and Tropicana Twister by PepsiCo. Companies say that these segments are now growing much faster than the cola segment.

For instance, Frost & Sullivan predicts that enhanced fruit drink beverages may even become the prime revenue earner for the beverage companies in the next five to six years.