A Pilot Study of the Market for Energy Drinks

Abstract

The energy drink market is one of the fastest growing markets in the non-alcoholic beverage industry. Yet, relatively little is known about this set of “new age” beverages. To fill this research void, we provide a historical perspective on this market and gather information from a local retailer located close to the campus of Texas A&M University to estimate the demand interrelationships for major energy drink brands (Full Throttle, Monster, Red Bull, and Rock-star). We employ the Barten synthetic demand system in this regard and obtain estimates of own-price, cross-price, and expenditure elasticities for the respective brands.