In the Mood for Some Perky Jerky? The World of Caffeinated Snacks; Food products packed with caffeine are growing quickly, with U.S. retail sales up 49% to $1.6 billion since 2008

April 17, 2013, 7:55 p.m. ET

In the Mood for Some Perky Jerky? The World of Caffeinated Snacks

By JULIE JARGON

PJ-BN791_CAFFEI_G_20130417175337

Loud Truck Energy Gummi Bears contain caffeine, B vitamins and other supplements.

The wait for the caffeinated marshmallow is over. In fact, with giant cups of coffee already a national obsession and energy drinks ascendant, companies are exploring whether there might be a viable caffeinated version of almost everything short of a roast suckling pig. This is a world where DoubleKick caffeinated hot sauce, Perky Jerky caffeinated beef or turkey jerky and Wired caffeinated waffles all exist. Large, well-known brands have joined small startups in trying to get a piece of the market for so-called energy products. Frito-Lay Inc., a subsidiary ofPepsiCo Inc., PEP -1.44% launched Cracker Jack’D Power Bites in Cocoa Java and Vanilla Mocha flavors late last year. The Jelly Belly Candy Co. was at the forefront of this trend when it developed caffeinated Extreme Sport Beans in 2007.

The success of caffeine-laced energy drinks like Monster and Amp has demonstrated the appetite for products that deliver a boost. Food products packed with caffeine, though still small compared with energy drinks, are growing quickly, with U.S. retail sales up 49% to $1.6 billion since 2008, according to Euromonitor International.Makers of energy products need to worry about getting the taste right, since caffeine is naturally quite bitter. Another concern: These foods arrive just as health regulators are giving the energy-boost industry a harder look. And though the products are marketed to grown-ups, the possibility of children misusing them is another potential public-relations obstacle.

For most healthy adults, 200 to 300 milligrams of caffeine per day—the amount in about two to four cups of brewed coffee—isn’t harmful, according to the Mayo Clinic. But more than 500 milligrams daily can cause insomnia, nervousness and rapid heartbeat. The Food and Drug Administration advises pregnant women and people with heart problems to limit their caffeine intake more strictly.

Although a single serving of any of these products contains a fairly low level of caffeine, often between 12 and 50 milligrams, health experts worry about the risk for abuse.

“I’m concerned about the proliferation of all these products. People might eat several servings in the course of the day—either several servings of a single food or several products,” says Michael Jacobson, executive director of the Center for Science in the Public Interest, a consumer advocacy nonprofit. “It’s worrisome because caffeine is a mildly addictive stimulant drug.”

The FDA requires caffeine to be included in the list of ingredients on food packages, but doesn’t require the amount to be disclosed.

Energy drinks have come under fire recently from lawmakers and consumer groups concerned about their safety, especially among teens. The New York Attorney General’s office last summer issued subpoenas to three makers of hyper-caffeinated beverages seeking information on their marketing practices. And in 2010, the FDA found that caffeine-infused alcoholic beverages violate safety rules. In anticipation of that—and because several states banned its products—Phusion Projects LLC reformulated its Four Loko alcoholic beverages without the caffeine, taurine and guarana, common ingredients in energy drinks. It also stopped marketing them as energy drinks.

Some of these foods are candy-colored and, in the cases of products like the jelly beans or gummy bears, indistinguishable from candy, even if the makers say they are intended solely for active adults.

A spokeswoman for Jelly Belly said in an email that the company’s Sport Beans are “NOT a snack food” and that the company has research that shows they are a source of nutrition for athletes.

Most large food companies haven’t jumped into this market yet. The largest one so far—Frito-Lay—has only dipped its toe in this niche market with just two varieties of caffeinated Cracker Jack’D products.

But Wm. Wrigley Jr. Co. plans to introduce an energy gum this month called Alert, containing 40 milligrams of caffeine per piece. Wrigley says its gum has a bitter taste to which energy-drink consumers are accustomed and which will act as a deterrent to kids.

A smaller competitor, X8 Energy Gum, started hitting surf shops, sporting goods stores and hotel gift shops in the Southeast about two months ago; its gum contains 50 milligrams of caffeine per piece.

Steve Kingsley, founder of Montvale, N.J.-based HIP Caffex, places a warning on the front of his marshmallow packages saying the product isn’t for minors or pregnant women. “That’s not required, but we felt it was the right thing to do. We do have a concern about kids getting ahold of it, but we haven’t gotten any complaints so far,” he says.

Despite the labeling, minors can buy these marshmallows and other caffeinated products. Unlike tobacco or alcohol, there is no requirement to show identification when buying them.

Mr. Kingsley says he came up with the idea for caffeinated marshmallows because he and his wife are “marshmallow addicts” and because his wife, a fitness instructor, was “always looking for an energy food that tasted good, because most energy foods don’t.” The marshmallows come in chocolate, coffee and mint flavors, among others.

Eric Monson, a 37-year-old in Little Rock, Ark., tried Extreme Sport Beans when a running mate offered him some. But Mr. Monson “didn’t think much of” their taste, he says.

To compensate for the unpleasant taste of ingredients in energy products, food makers often load them with sweeteners. It took a year to formulate Loud Truck Energy Gummi Bears, a citrus-flavored chewy candy containing 32 milligrams of caffeine per one-ounce serving of about nine gummy bears. Randy Absalonson, owner of Spokane, Wash.-based Loud Truck EFG LLC, says he bought the company two years ago because as a triathlete, he consumed energy drinks regularly but hated their bitter taste. The product, thanks to a combination of corn syrup, sugar and citrus flavoring, offers the taste he was seeking in a portable format that doesn’t come with the diuretic effect of beverages, he says.

“What do people add to coffee to make it taste less bitter? Cream and sugar. That’s the way we looked at it,” says Mr. Absalonson. The company is now working on formulating a berry-flavored bear.

Nancy Hobbs, a competitive trail runner in Colorado Springs, Colo., says she and the runners she knows consume energy products like GU Energy Gel, some varieties of which contain caffeine. “They’re easy to carry and it’s a quick way to get that energy jolt you need,” says Ms. Hobbs, 52, who also founded the American Trail Running Association.

Ms. Hobbs, who has run half-marathons on mountain trails and each year competes in the World Masters Mountain Running Championships, says she hasn’t tried Extreme Sport Beans or Energy Gummi Bears, each of which contain much more sugar per serving than the GU gels, but wouldn’t discount them. “Some athletes have an aversion to too much sugar, but I’m not one of them,” she says. “You just need to make sure you get enough salt, too, so you have balance.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: