Beverage Winners and Losers of Summer Sales Season

NEW YORK -- The Labor Day holiday weekend was good for beverage sales in convenience stores if slightly behind growth last year, according to a Beverage Buzz retailer survey conducted by Wells Fargo Securities, New York.

Despite wetter and cooler weather than last year and Hurricane Hermine's blow to Florida, beverage sales in c-stores grew 4.5% during the holiday weekend vs. 6.2% in 2015, "solid" growth, according to analyst Bonnie Herzog's summary of the survey, "with pockets of strength in premium waters, healthy/functional nonalcohol beverages and import beers."

Here's a sales breakdown ...

Nonalcohol beverage sales were up about 4% in c-stores so far during the third quarter. "Retailers ... highlighted individual product lines/brands like Smartwater, Pure Leaf, Starbucks Snapple and Fiji as key sales drivers for their respective manufacturers," Herzog said. "However, retailers lamented the general lack of innovation and noted instances of stock-outs for Smartwater 1 liter but hailed the success of Allied Brands and flavors for Dr Pepper Snapple Group."

Meanwhile, alcohol sales have improved to about 5% so far in the quarter, led by Constellation Brands' Corona and Modelo.

"[Constellation] has been steadily strengthening its presence in the convenience channel with total sales in c-stores as a percent of total sales in all channels, according to Nielsen, going up from about 48% in 4Q11 to about 52% in 2Q16," Herzog said. "This compares favorably to  50% for MillerCoors and 42% for Heineken but slightly underperforms AB InBev’s 58% for 2Q16."

One struggling area, however, is energy drinks.

"Most retailers confirmed the energy category is slowing (consistent with Nielsen data)," Herzog said. The issue is driven by:

• Consumer pushback on price increases
• Lack of innovation
• Poor weather
• A broad shift to healthier/hydration categories