Beverages Rise to the Top

CSP's Midyear Category Data Report offers data on drinks

Samantha Oller, Senior Editor/Fuels, CSP

OAK BROOK, Ill.-- When looking at c-store categories growing fastest by dollar and unit sales in 2011, beverages rise to the top, led by energy and sports drinks and ready-to-drink tea, according to SymphonyIRI. But even the largest of all beverage categories--carbonated soft drinks (CSDs)--has shown some upward lift after several years in a sales morass, said CSP's Midyear Category Data Report.

For the 12 weeks ending July 10, CSD dollar sales rose 8.3%, with units growing 8.9%. As a result, the channel was able to take a half-point of share from food, drug and mass, said Matt McCourt, director of convenience, retail client solutions, for SymphonyIRI. "Most of it is driven by low-calorie and diets, which are up 1%," he said. Regular soft drinks were off 0.4%.

On the alcohol-beverage side, it's high time for retailers to raise a glass and celebrate, especially after years of flat sales. Strong promotions from key suppliers such as MillerCoors and Anheuser-Busch InBev have encouraged consumers to embrace bigger-ticket premium and above-premium brews with greater frequency, said Tom Fox, partner in beverage consultancy CM Profit Group, Troy, Mich.

"Based on what suppliers are doing with pricing, they've managed the gap between premium and below-premium products in a way where it encourages tradeup," Fox said.

Other segments showing renewed promise are imports and progressive adult beverages (PABs)--or flavored malt beverages--which are up by double digits, SymphonyIRI figures showed

Even after years of explosive growth, crafts still remain significantly underdeveloped in c-stores. Case sales rose 10.7% in the 52 weeks ending May 15. But given the increasingly manageable price gaps between the craft and premium sectors, crafts continue to represent a strong profit opportunity.

"Imports had some flat years with the surge on crafts … but that's shifting with the likes of Corona and Heineken, which are already pretty well developed in c-stores," Fox said. "With the economy improving, they're very much affordable luxuries."

Retailers are also finding strong profit potential in the wine sector; c-store unit sales rose 8.5% in the 52 weeks ending May 15. "The velocity of wine will never be that of beer, but it can be a good investment," said Fox. "No doubt it can have an impact to the overall transaction size, and it does attract a valuable consumer."

To read the full story with charts on beverages and other categories, click here or see the September 2011 issue of CSP magazine.