5-hour Energy – An Innovative Boost

Historical Perspective: from 8-hour to 5-hour Energy

The Five Hour Energy product, sold in 57-cc containers (1.93-oz) is vegetarian, Kosher, not FDA approved and contains no sugar or herbal stimulants – and has sold enough $3 bottles to make $1B in sales as of 2011. Interestingly, prior editions (as per forbes.com) which did not make it as far as the 5-hour energy version include the “6-Hour Power” and “8-Hour Energy” – all retired by founder Manoj Bhargava, who founded this company around 2004. A product of parent company Living Essentials, LLC, in turn parented by Innovation Ventures, the company is based in Farmington Hills, Michigan. After GNC bought 5-hour energy and placed it in 1,200 of its stores (in 2004), Walgreens, Rite Aid, and regional chains ensued purchases.

Present-Day 5-Hour Energy

The company relies upon its main product, which comes in various flavors. Extra strength berry, grape, sour apple, and decaf versions now exist, along with the regular-strength berry, lemon, grape, pomegranate, orange, and pink lemonade. In addition, the site, 5hourenergy.com, notes “zero sugar or herbal stimulants, 4 calories, B-vitamins and amino acids, as much caffeine as a cup of the leading premium coffee…” In addition, over 100 shop chains have been listed on its website, with over 50 Canadian store chains in as separate section. Notably, shelf space has been typically at the counter.

Expansion of markets includes with RunnersWorld.com reviewing the product, commenting regarding “what happens after taking a 5-hour energy shot”… reportedly, “your mental status won’t improve, but your mood while working at the same level of quality will temporarily be better… meanwhile your blood pressure will increase…” as published in the Journal of Caffeine Research per runnersworld.com.

In recent times, as noted by 2012 article from forbes.com, estimation of the $600mm company in 2011, with a gross profit margin of 80% (selling 1.4mm 2-oz bottles daily).

Beyond 5 hours…

New ideas on the horizon cited by Forbes.com include introduction and further marketing of a bar to help with similar hunger cravings. The projected sales of energy-shots, per a Mintel document, is $2.5B annually – with 5-hour energy presently owning about 90% of that market which it essentially created single-handedly.

The 5-hour energy shot undoubtedly has a first-mover advantage, and strives to maintain it (which it’s done for over a decade now) with overwhelming market share. Its continued growth will depend upon an already expanding product line (flavors) and other related but different products (e.g. nutritional bars).

With the hundreds of products of their kinds in terms of supplements, enhancers, and generally supportive of different functions, it’s a remarkable and unique story, which seems, surprisingly, both convenient and effective, despite the existence of coffee for centuries.

(Portions of this text are from forbes.com, runnersworld.com, Wikipedia.org, and/or 5hourenergy.com)