Will Biden and Trump need caffeine to debate? A look at today's $24 billion energy-drink market.

By Charles Passy

There are now dozens, maybe hundreds, of brands competing in the space, with new ones being launched constantly

As Americans look ahead to Thursday's debate between Democratic President Joe Biden and his Republican rival, former President Donald Trump, it seems that caffeine consumption is suddenly becoming, ahem, a buzzworthy topic.

That's because of comments made by Republican lawmakers that Biden might turn to Mountain Dew or energy drinks - in other words, beverages with a kick of caffeine - to help his performance. Of course, Trump is apparently no stranger to caffeinated beverages; it was reported that he drank 12 Diet Cokes a day when he was president.

While neither the Biden nor Trump campaigns responded to requests for comment, it wouldn't be out of the question for a presidential candidate to seek a caffeine boost. In fact, caffeinated beverages in all forms - from sodas to energy drinks to even caffeine-enhanced waters - are becoming as American as apple pie. And that's not counting the classic caffeinated sip itself, coffee.

The energy-drinks category alone has become a $24.4 billion behemoth in the U.S., according to market researcher Mintel. And it's on track to reach $30 billion by 2028, Mintel noted.

Forget Red Bull and Monster, two of the biggest caffeinated energy drinks on the market. There are now dozens, maybe hundreds, of brands competing in the space, with new ones being launched constantly.

Take the liquid-concentrate brand Mio, owned by KraftHeinz (KHC). It has its caffeine-enhanced Mio Energy line, and earlier this year rolled out its TAP system that effectively allows users to have energy drinks straight from the tap.

Then there's the iconic sports-drink brand Gatorade, part of the PepsiCo family (PEP). It's also moved into the caffeinated energy-drink space with its Fast Twitch line, introduced last year.

Jim Watson, a beverage-industry analyst with Rabobank, says there's seemingly no end to the buzz, literally and figuratively, for caffeinated drinks. "Now we have caffeine everywhere, and in much greater amounts," he told MarketWatch.

Speaking of PepsiCo, it made a major commitment to the energy-drink category when it invested $550 million in 2022 into Celsius Holdings - the company behind Celsius, a sparkling energy drink that takes caffeine levels to, well, a fairly high level.

Some Celsius drinks have as much as 270 milligrams of caffeine, or about three times what an eight-ounce cup of coffee has. Celsius even advises consumers not to have more than two cans of its product a day. For a comparison, Mountain Dew has 55 mg of caffeine per 12 ounces, while Coke has 39 mg.

'Now we have caffeine everywhere, and in much greater amounts.'Jim Watson, beverage-industry analyst with Rabobank

Indeed, the Food and Drug Administration cautions healthy adults to limit themselves to 400 milligrams of caffeine a day. And the American Academy of Pediatrics advises against kids under age 12 consuming any caffeine at all, and recommends that teens ages 12 to 18 consume less than 100 milligrams of caffeine a day.

Issues have already arisen due to beverages with exceptionally high levels of caffeine. In particular, Panera Bread came under fire because of its Charged Lemonade drink, with 390 milligrams of caffeine in a 30-ounce serving. Lawsuits were filed in relation to individuals who were said to have suffered medical complications or even died after consuming the beverage.

Panera has since discontinued the drink. But Miguel Custodio, a California-based personal-injury attorney, thinks other companies could find themselves in similar trouble, because energy-drink brands often don't make it clear in their marketing that they can contain high levels of caffeine.

"I think they could be setting themselves up for lawsuits down the road," Custodio told MarketWatch.

Still, our caffeine fixation shows no signs of abating. Circana, another market researcher, reports that energy-drink sales are up 9.5% over the past 52 weeks.

Sally Lyons Wyatt, an executive vice president at Circana, said the category is growing largely because of its appeal to younger consumers who want the caffeine boost but don't like the bitter taste of coffee. It's the same reason that coffee chains have become successful with drinks that make coffee more accessible through sweetened beverages, such as Starbucks' (SBUX) line of Frappuccinos, Wyatt noted.

As for concerns about caffeine, Wyatt said, "There's noise there for sure." But she added that brands will likely adapt by offering drinks with lower levels of caffeine.

Nicole Lyn Pesce contributed to this story.

-Charles Passy

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06-27-24 1747ET

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