Tracking Category Disruption with AI

What's Happening to the Energy Category?

This is a love story

If you work for a beverage brand, retailer, or distributor, it’s hard not to watch the drama in the Energy Drink Category.  It’s like a bad Rom-Com or another Celebrity breakup.  Not sure if we are dealing with “When Harry Met Sally” or “Bachelor in Paradise” type drama.  Nonetheless, it’s wild.

Having worked in the Energy category and broader beverage industry for over a decade, I can now confirm that the drama surrounding the category is unprecedented.  At the center is BANG Energy, where after signing the largest distribution agreement since Monster transitioned to Coca Cola, terminated the agreement after 5 short months, during the height of COVID.

Nothing moves slowly in the beverage world and neither did the deterioration of this relationship as it was announced this summer that the two have officially parted ways.  Feels like a classic “Your Fired, I quit” situation.  The dreams of a beautiful marriage turning into a nightmare for both ending in a bitter divorce.

What's next?

Pepsi, committed to building an energy portfolio, clearly had their eyes on Celsius Energy Drink, the next darling in the category.  Celsius has grown leaps and bounds, checking all of the boxes one looks for in a mate in the energy drink category such as Sugar Free, 12oz Package, function that works and marketing that is attracting new consumers to the category.  Celsius has caught its stride with targeting females, a segment largely standing on the sidelines watching the leading brands in the category market to action sports and cartoons.  “Finally, an energy drink I can get behind!” collegiate women across the country are saying with every Instagram post.

Pepsi will now stop delivering Bang to retail stores and deliver Celsius.  BANG is left finding another DSD network.  Maybe BANG can fill the void left from Celsius, just like Celsius did when BANG moved to Pepsi. The irony.

All The Kings Men....

BANG now has the incredible task of rebuilding a DSD network.  To service the National Customers like Walmart or 7-11, a national DSD network is needed.  Reestablishing a national DSD network through Beer Wholesalers requires setting up between 250-350 distributors organized by zip code across the country.  Essentially, putting Humpty Dumpty back together.  BANG  will need to summon all the Kings Men to put the network back together again. 

The impact of exclusivity...

Unfortunately, broken pieces don’t always glue back together.  In this case, so much as changed since BANG left the beer wholesaler network.  The biggest change is with exclusivity.  Let me explain. Until April of 2020, all major Energy Drink Brands- Redbull, Monster, BANG and Rockstar held exclusive agreements with their distributor partners prohibiting them from carrying any other Energy Drink Brands. 

Distributor exclusivity created two specific dynamics in the category.  The first was focus.  Brands like Red Bull and Monster had established organizations that are 100% focused on their brand.  The energy category has long been built by “presence over price” where off-shelf display at the store level, either warm displays or coolers, drove trial and impulse without the reliance of price promotion.  A Red Bull distributor, for example, was singularly focused on securing secondary display for RED BULL in every store.  Knowing that the distributor was focused on executing Red Bull brands only, Key Account Teams were freed up to compete with other brands and categories to expand space.  Check out how much shelf space Red Bull and Monster have in your local convenience store.

The second dynamic was blocking emerging brands from securing shelf space in national chains like 7-11, Circle K and Walmart.   These retailers require a brand to deliver to ALL of there stores across the country.  The only networks that reach every store are- you guessed it- Coke, Pepsi and major Beer Wholesalers.  Emerging brands, locked out of these networks due to exclusive relationships, have no way to scale.  The result has been a category dominated by Red Bull, Monster, BANG and Rockstar representing over 95% of the category.

This all changed when Pepsi bought Rockstar enabling them to launch other energy drink brands such as Mountain Dew Energy and Starbucks Baya, while securing distribution rights for BANG.  Pepsi now has the freedom to expand their energy portfolio without restriction of exclusivity.  Removing BANG from the Beer Wholesaler network, created opportunity for emerging Energy Drink Brands previously shut out of the market.  Brands such as Ceclsius, C4, G Fuel, Alani Nu and Ghost are all beneficiaries of the disruption created by Pepsi.

The Beer Wholesalers, “never the bride, always the bride’s maid”, have lost Monster to Coke, Bang to Pepsi and now Celcius to Pepsi.  Brutal.  You think they ever go exclusive again?  Doubtful!  BANG, having been built into a billion-dollar brand in an exclusive environment, now has to share attention and focus with other brands when it comes to off-shelf display, new item launches and independent retailer space.  That is, if these Beer Wholesalers even want to date again.  Breaking up can leave deep scars.

The case for Image Recognition Technology...

This disruption has led to significant complexity across the beverage industry.  In addition to pure play energy brands having a route to market, emerging functions are also getting shelf space.  Brands like Guayaki in functional Tea, Hoist in Isotonics and Super Coffee are all landing distribution networks to bring new items to consumers.

The unintended consequence of this is brands are finding it harder to execute at store level.  Once only competing with other brands at the Retailer, confident that their programs will get executed if a promotion or item was secured, now have to compete for “mind share” at the distributor.   AI-Image Recognition technology helps brands and distributors use data to guide priorities and accelerate problem solving- often in real-time.  Now more than ever, technology is needed manage and optimize store level execution

There are more chapters to write...

Monster leaves Bud for Coke.  Bud finds new love with BANG only to lose her to Pepsi.  BANG divorces Pepsi while Celsius courts Bud.  Pepsi has proposed to Celsius leaving Bud at the altar.  BANG is back dating again.  Will Bud take her back?  Will Miller Coors, now dating Energy Drink Brands, make a move?  Rumor has it that KDP is hanging out with BANG. 

Will BANG find true love?  Can Beer Wholesalers finally get married?  The drama!!  Feels like Knots Landing meets Game of Thrones!  This love story is a real page turner or binge worthy.  Vision Group will be watching….

One thing I do know about the beverage industry, whether it’s with alcohol or non-alcohol, there is always drama.  Like Mathew McConaughy, the Rom-Com’s have the same store line with different characters.  Probably why I’ve loved working inside the industry and now supporting the industry with Vision Group.  Watching all this drama and understanding who’s winning, who’s losing, who’s in transition was once cool, has now become a necessity.  The openings in the category are many, but close quickly.  The only way to stay on top of these changes, is by leveraging AI technology.   Your competitors are adopting AI-Image Recognition and IoT tech watching when you slip….

For more information on AI- Image Recognition, visit or contact Jason DeRienzo at

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