From BevNET to the New York Times to the "Today Show," people can't stop buzzing about energy shots, the newest trend in functional beverages. Virtually unheard of five years ago, the energy shot-a cousin to the popular energy drink-is currently raking in millions of dollars in sales across the U.S., showing no signs of slowing down.

Industry pundits such as Bill Pecoriello, CEO, Consumer Edge Research, who was recently quoted in the New York Times, believes the category will skyrocket to $700 million in sales by the end of this year.

But according to U.K.-based New Nutrition Business, statistics on the emerging energy shots category still are hard to come by. "Information Resources Inc. (IRI), for instance, hasn't recognized it as a category yet. BevNET estimated the shot category per se at about $100 million in U.S. sales in 2007 and as much as $500 million in 2008," the market researcher said, adding, "And that was before the beverage industry's major players-including Coca-Cola, PepsiCo, Hansen and Red Bull-decided to jump into the segment. The recent entry of Red Bull, with Red Bull Energy Shot and Red Bull Sugar-free Shot, indicates the appeal of the new category."

5-Hour Energy is the undisputed leader in the U.S. market, currently maintaining an impressive 70% market share. The brand is largely responsible both for the creation of the energy shot category as well as its rapid growth. In fact, according to Nielsen/IRI, in one year alone it grew from $13 million to $59 million in convenience stores, and from $6 million to $26 million in grocery, drug and mass channels.

"This brand has grown by an astonishing 219% and, far from losing share to other players as the market grows, as you might expect, it appears to be consolidating its leadership," New Nutrition Business said in its latest report, "Energy Shots: Birth of a New Premium-Priced, High-Growth Category." "This brand is to energy shots as Red Bull was to the original mainstream energy drinks market. Having established its dominance so early in the category's history it could-provided it maintains its focus-retain its dominance, just as Red Bull has in energy drinks for over 20 years."

Typically sold in 2 oz.-4 oz. bottles (60 ml-120 ml), energy shots offer consumers a benefit they can quickly feel. This is an appealing factor in terms of convenience, especially if the same ingredients are being delivered and the end result (i.e., health benefit) is the same.

Retailers, mostly convenience store owners, are also in love with the energy shot due to its nimble design, shelf appeal and premium pricing. "Shots provide two additional benefits-their small size, and consequently, convenience," New Nutrition analysts pointed out. "For consumers, [this] means they can fit easily into a purse or luggage. For retailers, tiny shots can be merchandised on and near checkout counters and easily even in the tight quarters of convenience stores. Plus, shots don't have to fight for premium cooler space that already has been gobbled up by 8- and 16-oz. cans of energy beverages."

Another important element of the energy shot is taste, or more accurately, the lack of taste. In fact, if consumers are looking for flavor or refreshment, they're going to have to look elsewhere, because these products are deliberately medicinal.

In an interview with Carl Sperber, creative director and co-founder of Living Essentials (creator of the 5-Hour Energy brand), New Nutrition Business discussed premium pricing and how it relates to energy shots' near-pharmaceutical functionality. "If we gave it as low a price point as everything else that is out there, it would be perceived as having the same effectiveness as an energy drink…But if you spent $3 on [5-Hour Energy] and it made you feel great for four to six hours, you feel that you didn't waste a dime," he said.

Unlike energy beverages, most of these shots are purposely devoid of sugar, and therefore calories, which is a key selling point for many consumers, particularly females. Rather focusing on younger males, which is the target demographic for energy beverages, energy shots have been positioned to attract more mature consumers whose energy needs require a quick shot of energy to get them through the day. "For manufacturers and retailers, shots provide a perfect complement to the energy-drink segment, overlapping with the teenagers who dominate that market but also appealing to a wide swath of adults ranging from truck drivers to nurses to office workers," New Nutrition Business said in its report. "Indeed, for truckers, energy shots provide a much-needed benefit-the energy boost of energy drinks but without all the liquid, so they can minimize bathroom stops."

Even though analysts expect energy shots' sales growth to slow a bit over the next few years, given that this category has grown explosively against the backdrop of economic recession, and given how successful and enduring it has proven to be in Asia, New Nutrition Business believes energy shots will clearly remain one of the most robust parts of a beverage market where many product segments have been flattening out for a while.

The market researcher also has some interesting predictions. "Some players in the shots game believe that shots have proven so popular that America will see two-ounce products addressed to many more functions than just boosting energy-perhaps joint care or antioxidant jolts." Only time will tell.