Functional Ingredients and Hypothetical Mergers Associated with the Energy Drink Market

Lingxiao Wang, Oral Capps , Yuqing Zheng and Yuxuan Pan

No 360839, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: Using NielsenIQ Retail Scanner data from 2021 to 2023, merged with the product-level ingredient data from Mintel Global New Products Database (GNPD), we estimate a Berry-Levinsohn-Pakes (BLP) model to evaluate consumers' revealed preferences for nutritional and functional ingredients concerning energy drinks. Results indicate that consumers have strong preferences for functional ingredients such as taurine, while showing aversion toward excessive sugar and certain mineral and chemical additives. Estimated price elasticities suggest that the demand for energy drink products is quite elastic, and generally are substitutes for one another, although some products within the same brand are complements. Simulations of three hypothetical mergers show that prices increase for both acquiring and acquired firms, profit declines for the acquired brands due to reduced market share, and consumer surplus largely decreases. The Difference-in-Difference (DID) event study of the actual Monster-Bang merger confirms similar directional effects on prices and market shares, though the magnitudes differ.

Keywords: Marketing (search for similar items in EconPapers)
Pages: 39
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/360839/files/7 ... forAAEA_06162025.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360839

DOI: 10.22004/ag.econ.360839

Access Statistics for this paper

More papers in 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().