While many convenience retailers are focusing more on their foodservice programs these days, they can’t afford to take their eyes off bottles of soda and cans of energy drinks. Nonalcoholic packaged beverages made up 18% of in-store sales at convenience stores last year, according to NACS data.
Goldman Sachs recently surveyed retailers representing about 42,000 c-stores in the U.S., or about 28% of the total industry, about how packaged beverage sales are faring. While some of the trends they noted have been lingering for a while, such as the impact of the Bud Light boycott, there were a few notable new insights worth digging into.
Here are the top takeaways from that report.
Innovative flavors will boost Monster
Two new Monster Energy flavors are expected to boost the drink maker.
All respondents to the Goldman Sachs survey said demand for Ultra Vice Guava, which launched in fall 2024, has been strong. This was an increase in the fourth quarter, when 91% of retailers said it was performing strongly.
The zero-sugar beverage can appeal to customers looking for a slightly healthier take on the category. One retailer noted it was the third-best-selling flavor in the 16-ounce category, and another noted it fit well into Monster’s flavor lineup.
While the guava flavor is being well received, “it seems that retailers are even more bullish on Monster’s new Ultra Blue Hawaiian,” the report noted.
That flavor, which Monster released in February, is a zero-sugar option with tropical fruit flavors. The retailers noted demand for this flavor was even stronger than for the guava variety — strong enough that they’re having trouble keeping it in stock.
“Ultra Blue Hawaiian is the best innovation from [Monster] in many years,” said the report.
Despite the troubled category, beer price increases are coming
Beer has been struggling lately, with retailers reporting flat year-over-year sales in the first quarter. But that seems unlikely to stop brewers from raising prices.
A majority of respondents to the Goldman Sachs survey expect all major beer companies to roll out more price increases this year. At the top of that list is Constellation Brands, owner of Modelo and Corona, which retailers universally expect to raise prices.
Constellation, however, may be able to command higher prices, as analysts expect the company will post above-average sales growth this year.
More than half of the retailers surveyed also expect price increases from The Boston Beer Company, Anheuser-Busch InBev and Molson Coors.
Celsius needs to trim its catalog
While Monster Energy and Red Bull are neck and neck at the top of the sales charts in the energy drink category, according to figures Goldman Sachs and NielsenIQ shared in April, Celsius has a solid grip on third place. It solidified that position with the purchase earlier this year of competitor Alani Nu — a brand that posted 27% growth in Q1 according to the report.
But while M&A should boost its sales, retailers say the sheer number of flavors Celsius offers are becoming a drag on the brand. One respondent said Celsius makes too many SKU changes and another said the company should simplify.
“Slower moving SKU’s should be dropped from [Celsius’] portfolio - and there’s risk that [Celsius] is over-saturating flavors,” said the report.
All that being said, the report did note that convenience stores still offer some sales upside for Celsius.
