From Coffee to Cans: A U.S. Caffeine Shift

Morgan Stanley's Dara Mohsenian discusses how younger US consumers are shifting caffeine consumption toward energy drinks. Survey data points to sustained energy drink demand that is mostly incremental rather than stolen from coffee or carbonated soft drinks. She expects high-single-digit category growth to continue, supported by demographics, zero-sugar innovation, affordability, convenience, and broader retail distribution. - Energy drinks are increasingly becoming an alternative caffeine source for younger US consumers. - A net 19% of current energy drink consumers expect to increase consumption over the next three months. - Consumers aged 25-44 show the strongest forward intentions, suggesting the energy drink habit does not fade with age. - Only about 20% of incremental energy drink demand comes from coffee and 22% from carbonated soft drinks; most growth is incremental to caffeinated drinks overall. - Energy drinks are expected to remain the highest-growth caffeinated beverage segment at a high-single-digit rate. - Zero-sugar energy drinks are attracting new consumers, especially women and older consumers. - Additional distribution in vending machines, fast food outlets, and coffee shops could further expand energy drink consumption.