Energy Drinks Get A Jolt

Nonalcoholic products are among those targeted by lawmakers.

With governments at all levels taking shots, the energy drink market in the United States appears to be flattening, and continuing negative publicity isn't helping. Of course, reports of kids getting sick and even dying after consuming alcohol-laden energy drinks haven't exactly been good for the category.

But it's not just alcohol-based drinks — currently being targeted by the U.S. Food and Drug Administration (FDA) and other government agencies — that are in the crosshairs. Some states, municipalities and school districts have acted to ban the sale of nonalcoholic energy drink products to teenagers, and the chorus in favor of such bans seems to be growing louder.

Last August, Chicago-based research firm Mintel released survey results showing that energy drink/shot manufacturers are having trouble attracting new customers, despite a 136 percent boost in sales from 2005 to 2009. In fact, 74 percent of those surveyed said they don't consume energy drinks/shots, and 69 percent of those nonusers don't care to try them.

Mintel's Global Market Navigator found that Americans consume 3.05 liters of energy drinks per capita annually, but energy drink market penetration remained flat at 15 percent of all adults over age 18 during 2007 to 2009. Energy drink/shot nonusers cite high prices (48 percent), too much caffeine (43 percent) and a general feeling that energy drinks/shots just aren't good for you (43 percent) as reasons for not consuming them in the past three months.

“Sales of energy drinks and shots have remained relatively strong for the last few years, but the same core group of customers continues to buy them,” reports Garima Goel Lai, senior analyst at Mintel. “The category added only 1 million new energy drinks users aged 18-plus during 2007 to 2009, compared to 9.3 million new users during 2005 to 2007, so manufacturers are eager to grow that number again.”

According to the survey, 71 percent of energy drink users and 80 percent of energy shot users consume them for an energy boost, while 57 percent use them to stay awake, and 60 percent, for mental alertness. Energy drink/shot consumers, meanwhile, are more likely to use energy shots (30 percent) than energy drinks (23 percent) to enhance sports performance.

However, a study published by the Washington-based American Psychological Association in December showed that although consuming energy drinks in moderation can enhance an individual's response time, benefits disappear once consumption becomes a habit. In another study, researchers from the University of Buffalo, in New York, have found a link between teens who consume a large quantity of such drinks and risky behavior.

Drink Bans Imposed

Last September, the Charlottesville-based Virginia High School League, which oversees all public schools in the state, imposed a new energy drink policy that forbids athletes from consuming energy drinks during participation in practices and competition, because of “potential serious safety and health issues.” The penalty for violating the rule is a warning to the member school, with possible stricter penalties for additional violations.

The action was in response to growing concern that consumption may be unsafe for adolescent athletes, as the beverages are often used for fluid replacement — unsuitable following strenuous activity because high levels of caffeine act as a diuretic, inhibiting the body's ability to rehydrate after exercise.

According to the Indianopolis-based National Federation of State High School Associations' position statement on energy drinks:

• They should not be used for hydration.

• They should not be consumed by athletes who are dehydrated.

• There is no regulatory control over these products, so their content and purity can't be ensured.

The board of trustees at Yreka, Calif.'s Union High School took up a similar proposal last August when it considered a proposal to ban energy drinks “in an effort to support the district's Wellness Policy,” which says that food and beverages should be available that promote “optimal health,” and “meet or exceed state and federal nutritional standards.”

In other parts of the country, anyone under the age of 19 on New York's Long Island, would be banned from buying nonalcoholic energy drinks under a proposal introduced by legislator Lynne Nowick (R-Suffolk County). The ban would target drinks with more than 80 milligrams of caffeine per serving, such as Red Bull, according to the bill, which could reach a vote sometime early this year.

“We believe ... that the combination of alcohol and caffeine is safe.” —The founders of Phusion Projects LLC, the maker of Four Loko

“Those drinks can potentially be dangerous for teens,” says Nowick. “Why put foreign things in your body when you don't know what's going into them? The drinks are not regulated.”

If Suffolk County imposes the ban, it would be the first in the nation covering nonalcoholic energy drinks.

Booze and Caffeine

Energy drinks containing booze, however, are another story.

Last November, FDA warned four companies that caffeine added to their malt alcoholic beverages is an “unsafe food additive,” and that further action, including seizure of their products, is possible under federal law. The companies and their products were:

• Charge Beverages Corp.: Core High Gravity HG, Core High Gravity HG Orange, and Lemon Lime Core Spiked

• New Century Brewing Co. LLC: Moonshot

• Phusion Projects LLC (dba Drink Four Brewing Co.): Four Loko

• United Brands Co. Inc.: Joose and Max

FDA said its action followed scientific review of peer-reviewed literature on co-consumption of caffeine and alcohol, consultation with medical and scientific experts, and its own independent laboratory analysis of the products.

“FDA does not find support for the claim that the addition of caffeine to these alcoholic beverages is 'generally recognized as safe,' which is the legal standard,” said Dr. Joshua M. Sharfstein, principal deputy commissioner. “To the contrary, there is evidence that the combinations of caffeine and alcohol in these products pose a public health concern.”

The agency said the products named in the warning letters are being marketed in violation of the Federal Food, Drug and Cosmetic Act. Companies were given an opportunity to explain why they believe their products don't violate the law.

In its announcement, FDA noted that Phusion Projects, the maker of Four Loko, intended to remove caffeine and other stimulants from its drinks, and pledged to work with the company and other manufacturers “to assure their products meet safety standards.”

Among the findings listed in a fact sheet on caffeinated alcoholic beverages published by the Atlanta-based Centers for Disease Control and Prevention (CDC), drinkers who consume alcohol with energy drinks are about twice as likely as other drinkers of being “taken advantage of sexually, to report taking advantage of someone else sexually, and to report riding with a driver who was under the influence of alcohol.”

In Washington state, the Liquor Control Board issued a ban on alcoholic energy drinks after nine students from Central Washington University were hospitalized following a party during which they reportedly consumed Four Loko. Phusion Projects officials, however, said police reports show the students had been drinking hard liquor, vodka, rum or other alcohol, as well as doing illegal drugs.

Early last November, the Michigan Liquor Control Commission reversed a decision on allowing the sale of alcoholic energy drinks, following the hospitalizations in Washington. The ban included Four Loko and 54 other caffeine alcoholic beverages.

In Maryland, Four Loko came under attack when it was blamed for the death of a 21-year-old woman who died after drinking two cans of the product and then crashing her pickup into a telephone pole.

In Philadelphia, Saint Joseph's University reported that a “handful” of students were hospitalized after drinking the product. The Pennsylvania Liquor Control Board (PLCB) later asked distributors to stop selling the product, but the request wasn't binding.

In a November news release saying that caffeine would be removed from its products, Chris Hunter, Jeff Wright and Jaisen Freeman, Phusion's three co-founders and current managing partners, said: “We have repeatedly contended — and still believe, as do many people throughout the country — that the combination of alcohol and caffeine is safe. If it were unsafe, popular drinks like rum and colas or Irish coffees that have been consumed safely and responsibly for years would face the same scrutiny that our products have recently faced.

“In addition, if our products were unsafe, we would not have expected the federal agency responsible for approving alcoholic beverage formulas — the Tobacco Tax and Trade Bureau (TTB) — to have approved them. Yet all of our product formulas and packaging were reviewed and approved by the TTB before being offered to consumers. We are taking this step after trying — unsuccessfully — to navigate a difficult and politically charged regulatory environment at both the state and federal levels.

“Over the last several months, we have been more than willing to talk with regulators and policymakers on the national, state and local levels. Our company has a history of being as cooperative as we possibly can to ensure that our products are consumed safely, responsibly and only by of-age adults.

“We hoped that clear, consistent, industry-wide standards regulating pre-packaged caffeinated alcoholic beverages would be the outcome of these conversations. We also hoped others would share our commitment to transparency and fairness.

“By taking this action today, we are again demonstrating leadership, cooperation and responsible corporate citizenship.”