Don't sleep on Esports.
Gamers are an influential consumer-base with tremendous purchasing power, and they are poised to draw more attention from the food and beverage industry. How much more, you ask? Well, with Esports gambling said to eclipse $14 bn in revenue last year and sponsorships now reaching $655 million per year, it is clear that the dynamic demographic of gamers are worth more of our attention.
Surprisingly, although few food and beverage brands are actually targeting this space, one segment appears to be dominating. Premium energy drinks have not only found a proper foothold in gaming, but these more functional 'performance-based' beverages have also reset the energy drink market entirely.
It is the dawning of a new era for energy drinks. Marquee brands like Bang, CELSIUS, Reign, C4, GFuel, A-Shoc, Gamer Fuel, and others are ushering in the segment and showing growth that the energy category has not seen in decades. Bang alone went from $345 million in sales in the Spring of 2019 to over $1.1 billion in just one year. These two emerging markets can show us why 'Premium Energy' is fueling Esports and what this means for other brands that want to try and capitalize on the space.
This ain’t your grandpa’s sports
Gaming is far more popular than we give it credit. To put things into perspective— In a COVID stricken time, when the world eagerly awaited the return of sports, Major League Baseball was first to make its 2020 season debut. According to ESPN, the MLB saw a record-high nearly 4 million views, up 232% from last year. Meanwhile, around that same time, other electronic sporting events were gathering similar recognition. League of Legends, a multiplayer online battle arena (MOBA) game, was also setting records amassing over 3.9 million views during their 2020 event. Let that sink in for a moment. A video game nearly matched the return of 'America's Past Time' at a time when the world was starved of sports. Even more compelling is that months later, the event is still growing as audiences continue watching the omnipresent replay on YouTube. Highlights of the games might never make the local news and generally wouldn't be considered in the same realm as traditional sports. But the fact is gaming and Esports provide some of the most widely watched and interactive environments available. How often do you come across an attractive, highly influential consumer base that is also grossly undervalued?
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An influential consumer-base with tremendous purchasing power
While one might be inclined to think 'video games = younger kids,' the reality is that the age range stretches well beyond the youth. More than a third of all gamers are over 34 years old, and 47% of them are parents (Source: Think With Google). Those who are most likely to consume food or beverages while playing are male gamers aged 21-35 (Source: NewZoo Research). Considering that video games, their systems, subscriptions, etc. are not cheap, we can surmise that this demographic has disposable income. Plus, with the online nature of gaming, this audience has greater familiarity and incentive to purchase products online. Gamers illustrate the type of consumer behavior that many brands find ideal to target.
Gamers not only play games but also watch other gamers play. And unlike traditional sports, Esports isn't consumed on cable TV. Many events are free on steaming services like YouTube and Twitch, so the audience is far more accessible. Game related content accounts for hundreds of millions of viewers. Two of the top five YouTube channels worldwide feature gaming content (Source: YouTube Data). If that isn’t persuasive enough, the potential for brand exposure is significantly multiplied in Esports as well. Compared to other sports, gamers typically play in long four-to-six-hour sessions, are often visible to the viewers for the entire event, and will consume food and drinks regularly during gameplay.
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Gamers are attracted to premium, high-level products
Some of the most notable innovations in gaming products thus far are improvements in packaging. There is a lot of attention to detail, and brands pay as much attention to the look and feel of a product as they are on how it enhances gamer performance. Gamers embrace innovation and are keen to try new products while providing valuable feedback. Beverage manufacturers have responded by designing textured labels for better grip, resealable cans for extended use, and formulating more efficacious products using highly functional, branded ingredients. These characteristics add costs but are key indicators that gamers are attracted to more premium, high-level products. Accordingly, the ingredients that you target must align with that expectation.
Think about the top functional categories that gamers desire.
• Focus
• Concentration
• Energy
• Eye Health (for screen time)
• Relaxation/Adaptogens (for sitting still)
• improved Reflexes
• Memory Recall, etc.
Today’s consumers of any type can relate to these benefits. Hence, there is ample opportunity for category crossover, which is a key strategy when approaching niche markets.
"As a functional ingredient supplier, we have seen considerable interest in our energy and cognitive function ingredients for gaming," explains John Kathrein Ingredient Coordinator at Applied Food Sciences. "Our organic caffeine solutions in PurCaf® (from organic green coffee) and PurTea® (from organic green tea) are great starting points because they contribute to the desirable clean label and premium energy appeal. But we are continuously looking to inspiring the category conducting further research on our more premium energy ingredients."
One these exciting offerings is AmaTea®, a patented ingredient with a unique profile of caffeine and antioxidants. In partnership with the University of Memphis College of Health Sciences, AFS has funded a study investigating the impact of AmaTea® on gaming performance. The current study aims to compare AmaTea® on various measures of gaming performance along with cognitive function. The investigators hypothesize that both AmaTea® and caffeine will improve outcome measures more than placebo, with a considerable improvement expected for AmaTea® due to the particular antioxidant makeup.
©2020 Applied Food Sciences
