2025 Beverage Report: C-Stores Fight for Price-Conscious Consumers

Convenience is critical to drive packaged beverage volume. The retail channel’s position in the eyes of consumer is, however, a case of “valued” over value. 

Throughout 2024, consumers grew increasingly weary of inflation—thus they more often sought value-priced advantages of mass and club stores. Contrast that with 2023 when folks made convenience their go-to channel: inflation had been less imposing, and a growing number of consumers had shifted from telecommuting to on-site work.  

This year might see a blending of these two trends, where convenience wrests back more omnichannel impact as it relates to beverages. 

“In 2023, it was a banner year for convenience,” said Sally Lyons Wyatt, global executive vice president and chief advisor, consumer goods and foodservice, Circana.

Priorities shifted in 2024 as it became more apparent to consumers that “convenience is just that—conveniently priced. It’s not the ‘value channel.’ There were channel headwinds, and c-store foot traffic declines were one of them. Add to that the fact consumer beverage habits shifted,” said Lyons Wyatt.

The outsized growth of mass and club stores was undeniable. Perusing the entire omnichannel universe, 53% of all non-adult beverage growth flows through mass and club—this on top of a combined 32% base market share across the omnichannel during 2024, Circana reports. 

To be sure, consumers are acutely dependent on c-stores for beverage segments including energy, isotonics and ready-to-drink coffee, as well as adult beverages such as beer and canned cocktails, according to Circana. 

Competitive beer prices in 2024 sparked c-store volume growth, while carbonated soft drinks, hurt by sizable price hikes, paid the price with volume declines. Premium-oriented beverages at convenience, such as yogurt drinks and sparkling water, thrived despite price increases as people gave themselves permission to indulge in small luxuries. 

Across the omnichannel, c-stores registered a 22% share of non-alcohol beverage dollar sales for the 52-week period ending Oct. 6, according to Circana. Broadly, all non-alcohol beverage growth over a five-year period from 2019 through 2023 registered an omnichannel compounded annual growth rate (CAGR) of 18%.

Speaking during a November webinar titled “Sips: Changing Consumer Beverage Preferences,” Cara Loeys, principal, client engagement of CPG for Circana, pointed out that c-stores “are more susceptible to market conditions, but yet it’s a key channel for many beverage categories. There’s a dependence on it,” said Loeys. 

One sweet spot is premium beverages, led by cocktail mixes and yogurt drinks, said Loeys. One late 2024 release was Lala USA’s high-protein yogurt offering a premium nutritional profile in both drinkable and spoonable options.

Across the c-store, value-driven varieties win the sale when consumers are on budgets. Premium wins when consumers give themselves permission to splurge. Squeezed are middle-tier beverages. 

Added Lyons Wyatt: “The middle tier [brand market position to price points] has its benefits, but they have to work harder to communicate their message about the offer: Is it authenticity? Does it have multiple benefits?” One thing is that being a “me-too” operating in the middle beverage tier is onerous, she said.
 

One axiom is to go with a well-cultivated strength, and for c-stores that happens to be single-serve merchandising.

During a recent episode of CSP’s weekly podcast “At Your Convenience,” Ken Rash, senior category manager/packaged beverages, Boise, Idaho-based Stinker Stores, remarked that convenience outdoes grocery with single sales, and needs to leverage that position of strength more decisively.

Single-beer merchandising is one example. The 19-ounce single can paced all single-beer formats in 2024, up 62% in sales versus the year prior, according to Circana. White Claw, New Belgium, Goose Island and Sierra Nevada were four brands responsible for the uptick.

Scott Johnson, executive vice president at Franklin, Tennessee-based beverage consulting firm Enliven, said c-stores faces headwinds in multiple areas, which makes “the single-serve drink occasion extremely important. It has relevance to give consumers a trial platform and determine if they like it—and then later trade up to larger pack sizes. Singles offer solid profits, too,” said Johnson, a former senior vice president of Keurig Dr Pepper.
 

Energy drinks continue to push innovation to become a more multi-dimensional force above and beyond providing an energy boost.

Energy is branching out more each year to deliver evolving recipes packed with more healthy ingredients, zero-sugar, zero-calorie and functional foods—it has sparked the recruitment of more occasional users and loyalists.

New varieties featuring less caffeine, zero or low sugar, are an indication that suppliers have “answered the demands of people wanting a new type of energy,” said Lyons Wyatt. 

Energy category leaders were busy innovating in 2024: Red Bull Iced Vanilla Berry joined the 2024 Winter Edition lineup, marking the first time in the Editions lineup when options have been available in regular sugar and sugar-free options. In January, the brand rolled out Red Bull Zero crafted with monk fruit extract and other sweeteners, a no-sugar option with a unique taste. 

Monster Energy debuted Rio Punch Juice Monster, inspired by the energy of Rio de Janeiro’s Carnival and the diversity of Brazilian fruits, the brand team said. 

“We’re seeing a lot of great trends around enhanced hydration and energy drinks with added micro-nutrients,” said Johnson of Enliven. 

Placing a damper on some segment momentum is the class-action lawsuits against Prime Hydration over alleged chemicals in its Prime Hydration brand and alleged excessive caffeine contained in its Prime Energy. The lawsuit claims Prime Energy contains 200 milligrams of caffeine, saying that it’s almost twice as much caffeine as rivals Monster and Red Bull.

Carbonated soft drinks, a time-honored legacy beverage segment, is tasked to turn around its fortunes. While still “growing,” CSDs are doing so at a more modest clip than other beverage segments.  

“It will take a big level of innovation to turn it around—it will be tough, but anything is possible,” said Lyons Wyatt.

CSDs registered a 24% share of omnichannel dollar sales for the year period ending Oct. 6, but the five-year compounded annual growth rate was a modest 15%, according to Circana. Looking at non-alcohol categories, CSDs passed along above-average price increases, which didn’t help volume growth. 

The momentum CSDs did generate was seen with some intriguing LTOs. Rash of Stinker Stores points to Swedish Fish and Retro Pops producing solid lift for the chain of 105 stores in Idaho, Wyoming and Colorado. Swedish Fish Soda in 12-ounce bottles captures the iconic taste of Swedish Fish candy but in a fizzy soda.

Large-brand innovation occurred with PepsiCo debuting Pepsi and Pepsi Zero Sugar Wild Cherry & Cream, fusing wild cherry and vanilla flavors. 

“Pepsi Wild Cherry & Cream are favorites among millennial and Gen Z cola fans, with 8% growth year over year on regular cola,” said Jenny Danzi, head of marketing for PepsiCo. “With 2025 trends bubbling up on all things cherry, we’re confident the new offer will be a hit with fans this year.” 

C-stores are a critical channel to drive adult-beverage volume, with pre-mixed cocktails and hard seltzers boasting a 45% omnichannel share of dollar sales for the 52-week period and a five-year CAGR of 51%, Circana stated. 

Packaged beer registered an impressive 55% omnichannel share, driven by a slowdown in price increases from brewers. C-stores won the sale for their convenience coupled with the fact many beer brand prices dropped in 2024: beer prices in c-stores rose 2.1% for the period covering most of 2024 compared to the year-earlier period when beer prices increased 5.1%.

Scott Scanlon, executive vice president, alcoholic beverages, for Circana, said consumers are seeking better-for-you, low-alcohol-by-volume adult beverages on one end and seeking flavor-forward varieties on the other—particularly with hard seltzers and RTD canned cocktails.  

Meantime, smaller brewers and distillers are nimble enough to innovate to bring products to market swiftly, including within the non-alcohol space where acute innovation is bringing new users into the fold. “Athletic Brewing is one example,” said Scanlon. 

The Stratford, Connecticut-based brewer is a pure-play brewer of non-alcohol beer SKUs, such as Run Wild IPA. “It has long been viewed as a small player,” but he said that designation is becoming passe as it grows. In fact, Athletic Brewing is poised to enter the top 50 of retail beer SKUs sold in 2025.     

All adult beverages flashed a 39% share across omnichannel for the year period. C-store single-sale merchandising is paramount to coax immediate trial and then spark trade-up opportunities. This is particularly true of new-to-market brands, such as Lipton Hard Iced Tea, which extended the line in late 2024 with Lipton Hard Iced Tea Citrus Green Tea.

“Citrus Green Tea has been a hit for Lipton Hard Iced Tea, and we’ve listened to consumer demand for more ways to enjoy it,” said Adam Fries, brand manager for Lipton Hard Iced Tea. 

Both local and out-of-town consumer trends are integral to determining how retailers manage beverage space allocation, long an albatross to overseeing an unwieldy consolidated category. 

Scanlon of Circana said there “have been so many new entrants in the adult beverage space” that it’s very good news for consumers seeking choice—but bad news for retailers constantly having to assess their adult-beverage planograms. 

While it might complicate matters, integrating a host of diversified suppliers is paramount to right-sizing in-store category balance. “There’s limited space and so much innovation—this creates challenges to stay on-trend,” said Johnson of Enliven. Small or mid-size suppliers are armed with their own unique product innovation, he said. 

Lyons Wyatt said when it comes to beverages, “it’s critical to take into account the beverage desires of both local residents and out-of-town travelers—and then pinpoint the right mix.”

The effort should be executed on a store-by-store or cluster-of-stores basis. “Keep the finger on the pulse of local trends, have agility to rotate products in and out, and monitor social media for the latest trends. The key is not being static.”