Coffee is not enough for America’s new caffeine rush, it ‘can’ be much more: Morgan Stanley

America’s caffeine habit is getting a makeover. Coffee may still power the morning, but energy drinks are increasingly becoming the can of choice for consumers looking for more energy, more flavour and, quite simply, more caffeine.

That shift could have plenty of runway ahead.

Morgan Stanley expects the US energy-drink category to grow at a high-single-digit rate, extending a growth streak that has averaged about 9% annually over the past 15 years, according to a podcast released on Monday by its US Household Products and Beverage analyst Dara Mohsenian.


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Morgan Stanley's survey of roughly 3,000 US consumers found that a net 19% of current energy-drink consumers expect to increase their consumption over the next three months — a stronger outlook than in its previous surveys.

The caffeine generation is growing up

The more interesting part of the shift is not just that young Americans are drinking energy drinks. It is that they appear to be taking the habit with them as they age.

Consumers aged 25-34 and 35-44 showed the strongest intentions to increase energy-drink consumption, according to Morgan Stanley. That suggests consumers who picked up the habit when younger are not necessarily ageing out of the category.

And this is not simply a coffee-versus-cans battle.

Only 20% of incremental energy-drink consumption in Morgan Stanley's survey came from consumers switching from coffee, while 22% came from carbonated soft drinks. The bulk of the growth, therefore, is expanding the overall caffeinated-beverage pie rather than merely slicing into coffee's share.

More kick, less fuss

For consumers who recently switched from coffee to energy drinks, 57% cited getting more caffeine per beverage, while 45% pointed to convenience. Nearly half preferred the flavour of energy drinks, while another 45% cited greater flavour variety.

The category is also broadening its appeal through zero-sugar products, which Morgan Stanley said are perceived as better-for-you options and are attracting new consumers, particularly women. Older consumers, meanwhile, are sticking with the category.

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Energy drinks are also increasingly being positioned as an affordable indulgence, with Morgan Stanley noting that they are beginning to replace some spending on categories such as alcohol and snacks.

From gym bags to drive-thrus

The caffeine migration is also showing up beyond convenience stores and college campuses.

Morgan Stanley found that 47% of consumers would buy more energy drinks if they were available in vending machines, while 46% said they would increase purchases if the drinks were offered at fast-food and fast-casual restaurants. Another 37% pointed to coffee shops.

That trend dovetails with a broader beverage makeover underway across US restaurant chains.

A report by Investopedia in April this year noted that major chains were expanding their menus with speciality drinks, energy beverages and customised sodas as consumers sought relatively inexpensive treats. McDonald's was preparing a broader beverage rollout, while Taco Bell had opened more than 30 Live Más Cafés offering speciality coffees, refreshers and energy drinks.

Investopedia also reported that Yum Brands estimated specialty coffees accounted for about a quarter of the $169 billion US non-alcoholic beverage market in 2024, with that market projected to grow 5% annually between 2025 and 2032.

The new American pick-me-up

The result is a beverage market where caffeine is no longer simply a morning ritual. It is becoming a product attribute that can be layered onto convenience, flavour, wellness and even a little indulgence.

Morgan Stanley's bigger takeaway is that energy drinks are adding to the caffeine occasion rather than simply stealing it from coffee. With younger consumers embracing the category, older cohorts holding on and restaurants finding new ways to sell caffeinated drinks, America's daily pick-me-up may be moving from the coffee pot to the can — without shrinking the appetite for either.