sugar-free sports drinks

‘A lucrative opportunity:’ Can Aussie sports drinks wrestle sales from soft drinks?

By Rachel Arthur

- Last updated on GMT

‘Zero sugar fast hydration,’ proclaims Powerade Zero
‘Zero sugar fast hydration,’ proclaims Powerade Zero

Related tags Sports drinks Soft drink Sugar substitute

The Australian sports drinks market will continue to grow: but sugar-free versions present an opportunity to shake up the sector, according to research firm TechNavio. 

The category is expected to grow ‘significantly’ with a CAGR of 6.17% during 2014-2019, according to TechNavio’s latest figures.

Yet the market still only contains a ‘negligible percent’ of sugar-free options.  And as Australians get more savvy about sugar, there’s a golden opportunity to snatch territory from sugary soft drinks, analysts say.  

Category needs disruptive innovation

Sports drinks are functional beverages which maintain electrolyte balance in the body. Made from sugar, water, carbohydrates and electrolytes, they act as a fuel source, replacing lost water and maintaining the acid-base balance during intense physical exercise.

The Australian sports drink market is growing significantly with a CAGR of 6.17 percent in value terms during the period 2014-2019. The market was estimated at $448.31m (USD) in 2014 and is expected to reach $604.83m by 2019.

In terms of volume, the consumption volume of sports drinks in Australia is expected to reach 92.49m liters by 2019 from 70.31m liters in 2014.

Changing lifestyles - heavily influenced by health and wellness and rejection of soft drinks – are driving growth.

Faisal Ghaus, vice president, TechNavio, told the launch of sugar free versions is a promising way to shake up the sector.

“The market has not witnessed a significant change in formulation since its introduction and lacks product diversification,” ​Ghaus said.

It's expected to witness slower growth during the forecast period, because of its increasing maturity, coupled with the absence of disruptive innovation in the product.


“There is a demand for more dynamic and healthy sports drinks in the Australian market.  As Australia is one of the top 10 markets for soft drinks in the world, the rising concerns of obesity among youths due to excessive drinking of soft drinks is a cause of worry.

“The awareness of sugar-free sports drinks can lead to significant market growth in the future and will present a lucrative opportunity for vendors to increase their profitability in the country.”

‘Negligible percent’ of sugar-free sports drinks

Sugar-free sports drinks use often use sucralose or other natural sweeteners.

“Until 2014, Powerade was the only popular brand that had introduced a sugar-free option in Australia,” ​said Ghaus “Therefore, the market consists of a negligible percent of sugar-free sports drinks.

“Young Australians consume a high amount of sugar/sugar sweetened beverages. However, as awareness regarding the health risks related to high sugar consumption is on rise, consumers are expected to demand more sugar-free options, and the share of sugar free sports drinks will rise significantly.”

Any challenge from energy drinks?

Sports drinks are more popular than energy drinks – Ghaus suggests this reflects Australia’s sport culture. Big players in the sports drink arena – Powerade, Gatorade, PowerBar, Staminade – are expected to continue their market dominance (they currently occupy 91-93% of the market in terms of revenues).  

“While sports drinks manufacturers essentially target young athletes, they are subtly marketed to the general audience as well,” ​Ghaus said.

“This is reinforced by the prominence of sports drinks in retail outlets in terms of their color, attractive packaging, and easy availability.

“The typical target audience consists of teens and young active consumers, leading fast-paced lifestyles and who are on the lookout for something that instantly replenishes, quenches thirst, and enhances performance.”


That double-edged sword called ‘healthy’...

Sugar-free options could boost a positive image for the drinks, but health concerns could drag them back down.

The primary challenge is the health risk related to sports drinks consumption,” ​said Ghaus. “While the general perception is that sports drinks are healthy, several studies show that they lead to conditions such as obesity, depression, and anxiety.

“Moreover, these drinks are essentially targeted at athletes, to be consumed during intense physical activity. They are often consumed beyond their intended use, leading to heath complications.

“Further, they are marketed to the general audience, and this has invited criticism from various advocacy groups.”  

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