The COVID-19 pandemic was the biggest influence on the beverage industry in 2020, says Gary Hemphill, managing director of research at Beverage Marketing Corp., New York.
“It’s hard to talk about anything these days, without at least acknowledging that,” Hemphill says.
Hemphill, whose firm primarily looks at total beverage volumes in the United States, says the biggest change in the category during the past year is where people buy their drinks. The combination of people quarantining at home and restaurant closures led to a rise in off-premise beverage sales and a decline in on-premise.
The pandemic has also magnified and accelerated existing trends, such as consumers’ want for health and wellness attributes in their beverages, Hemphill says.
How has this impacted the c-store channel?
Levin says his benchmark for good growth is anything above 2.9%, or the total growth for the c-store channel in general for inside sales in 2020. The total packaged-beverage category grew 0.2% in dollar sales, but alcohol grew 14.8% in dollar sales in c-stores compared to the year before, according to IRI data for 2020.
“We still have to be proud of the fact that the channel hit an all-time high,” says Levin, executive vice president of consumer and shopper marketing innovation at IRI, Chicago. “It just didn’t benefit like some of these other channels did.”
Samantha Overmohle, Kum & Go category manager, says c-stores have done well amid COVID-19 because they’re a quick stop.
“Customers can get in and out in just a few minutes, minimizing the risk of exposure,” she says.
The biggest challenge for packaged bev erages has been out-of-stocks, Overmohle says.
“We have brought in other take-home soda packages due to shortage of can inventory,” Overmohle says. “We have also experienced heavy out-of-stocks within energy, isotonics and CSDs as manufacturers have had to prioritize production lines for their core items vs. flavor extensions.”
Even so, 2020 saw a CSD (carbonated soft drink) resurgence and historic sales of trusted brands, Overmohle says. Consumers are looking for choices and value, meaning consumers get more than they would expect in a beverage, such as added caffeine, immunity boost, vitamins or protein, she says.
“In a world of uncertainty, consumers are going toward what they know as a quality product. I would expect these trends to continue through 2021,” Overmohle says.
Beverage Growth by Channel
Beverages in c-stores grew 0.2% in dollar sales in 2020 and all alcohol grew 14.8%, according to IRI. Here’s how c-store beverage sales growth compared to other channels.
Source: IRI data for the year ending on Dec. 27, 2020. *Percent change from a year ago