CSDs Still Ailing as Beer, Energy-Drink Sales Grow
Latest data shows cold weather, holidays as key factors
NEW YORK -- Add cold weather to an already frigid sales atmosphere and things are going from bad to worse for carbonated soft drinks, even as energy drinks and beer sales see improvements.
Total CSD dollar sales fell 1.2% in convenience stores for the four-week period ending Dec. 21, 2013, according to a research note from Wells Fargo Securities analyst Bonnie Herzog, citing Nielsen data. The prior 12 weeks, the beverage category was flat with just 0.2% sales growth, according to the note.
Herzog attributes the latest decline to falling temperatures that make a cold CSDs less appealing and to higher prices.
For Coca-Cola Co., CSD dollar sales were up 1.5% as a result of 2.1% declines in equivalent unit volume and a 3.1% increase in the average equivalent price, Herzog reported. “For the seventh consecutive month, Coca-Cola captured volume and value share in this category within the c-store channel," Herzog wrote, "gaining a strong 1.0% in both metrics."
PepsiCo CSD dollar sales fell 2.5% during the month with 7.2% equivalent unit volume declines and 5.1% average equivalent price growth. "Pepsi has continued with its above-industry-average pricing growth; however, the impact on sales led to its worst dollar sales growth in over a year despite lapping an easy +0.7% prior-year comparison," Herzog wrote.
Dr Pepper Snapple Group's CSD dollar sales were down 4.9% during the period as a result of average equivalent price increases of 1.7% offset by equivalent unit volume declines of 6.5%. "Both Dr Pepper brand and its diet counterpart had very weak sales growth, with Diet Dr Pepper volumes down nearly 15%," Herzog wrote. "While we are encouraged by Coca-Cola's relative outperformance and share gains during this challenging macro environment, the ongoing weakness of the CSD category continues to be our largest concern," she summarized.
In the energy-drink category, growth "pulled back slightly from last period's double-digit dollar sales gains but still grew a solid 7.8%."
Monster Energy continues to outpace industry growth with strong dollar sales, up 14.0%, bringing the 12-week sales growth to a solid +13.8%. Red Bull's dollar sales grew 5.6%, while Rockstar generated weaker 1.4% sales growth.
"We are encouraged by the ongoing recovery of the energy category, particularly Monster, with its sales growth and share gains," Herzog said.
And in the beer category, dollar sales in the U.S. c-store channel were up 2.2%, Herzog reported. AB-InBev dollar sales were down 0.2%; MillerCoors dollar sales increased 0.7% as Coors Light sales returned to positive growth following three months of declines. Constellation had very strong sales growth of 21.1%, led by solid Corona brand performance. "Heineken dollar sales also showed a strong recovery with +6.4% dollar sales growth, the highest in the past 6 months," Herzog wrote, "while Boston Beer posted exceptional 24.2% sales growth. We attribute the outperformance of premium beers at least partially to Thanksgiving timing."