4 Takeaways From Labor Day Retailer Survey on Beverages

NEW YORK — Packaged beverage trends were generally strong through the end of the summer in the convenience-store channel.

Inside sales for beverages were up 7% compared to the past year over Labor Day weekend, despite out of stocks and weak traffic, according to a report from Goldman Sachs on a Labor Day weekend retailer survey representing about 30,000 stores.

Most c-store retailers (65%) are feeling more positive today in their outlook for the total beverage category compared to over the last one to two months, Bonnie Herzog, managing director of Goldman Sachs, New York, said in the report. This was partially due to the contributed rebound in energy drinks and robust growth in hard seltzers.

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Energy drinks grew 8% over Labor Day weekend compared to the prior year, and hard seltzers saw triple-digit growth, according to the report.

Energy drink sales were largely driven by Red Bull and Monster Energy, and some retailers called out a welcome acceleration in immediate consumption packs, Herzog said. Monster was up about 5% compared to the previous year over Labor Day while Red Bull was up 9%.

Hard seltzers were up in the triple digits over Labor Day weekend, and retailers expect that growth to continue through the third quarter of this year. However, several retailers also reported out of stocks for White Claw, which may bode well for the Boston Beer Co. as out of stocks for its hard seltzer, Truly, seem to be less widespread, Herzog said.

White Claw saw 124% growth compared to 2019 over Labor Day weekend, while Truly saw 163% growth.

Retailers continue to see significant out-of-stock pressure across alcohol beverages. For the total industry, 50% of retailers think the current out-of-stock situation is bad (an improvement from August when 90% of beer distributors said this was bad or very bad).

The situation also improved for hard seltzers, with about half of retailers indicating that the current out-of-stock situation was bad, compared to nearly 100% of beer distributors who said this was bad in an August survey.

Things could be looking up—about 67% of retailers expect out of stocks to get better by October.

In non-alcohol beverages, retailers see a light innovation pipeline for the rest of the year, although some are excited about Red Bull’s Watermelon Edition, which is being added permanently to its lineup.

Retailers were also excited about new Monster juices, some of the new Bang flavors and offerings from emerging energy drink brand G Fuel, according to the survey.

When it comes to retailers’ outlook for new hard seltzers, nearly 45% of retailers surveyed said a potential Monster Hard Seltzer, which the company has yet to officially confirm, would likely be successful.

The company’s marketing and customer loyalty should benefit Monster, if they enter the category, retailers said; however, retailers also said the hard seltzer field is crowded, and Monster would likely need to do something to differentiate their product to generate renewed interest from consumers.

Results were more mixed for The Coca-Cola Co.’s Topo Chico Hard Seltzer, which launches in 2021 in the United States. Retailers were divided on whether they would give it space, some expecting it to be a niche offering at best, according to the survey. 

Retailers were also uncertain of Bud Light’s upcoming Platinum Seltzer, which has an 8% ABV, higher than a typical hard seltzer. Some retailers think the typical hard seltzer drinker is not looking for a higher ABV, Herzog said. Retailers who responded to the survey nonetheless plan to make room for it, along with other planned higher ABV hard seltzer offerings like White Claw Surge and Truly Edge, she said.