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Beverages

Beverages: Getting Drinks Back on Track

Retailers struggle to maintain tried-and-true brands while evolving for the future

CHICAGO -- A trend toward taxation has receded. Now, will consumers figure out what they want next and where they’re willing to buy it?

1. Growing competition.

While several subcategories of beverages—bottled water, ready-to-drink (RTD) coffees and teas, and energy drinks—saw decent sales growth in c-stores in 2017, they performed even better in other channels of retail. This, on top of a slowdown in foot traffic, suggests consumers are finding new ways to quench their convenience needs.

 

2017 Nonalcohol Beverage Market Share

 

Source: IRI

2. Cooler watch.

As sales of stalwart subcategories such as juices, sports drinks and carbonated soft drinks stall in convenience stores, the move to what’s new—think pressed juices or vinegar waters—will be incremental and measured. Don’t expect a new subcategory like energy drinks, which completely changed the category in a matter of a few years, to crop up anytime soon.

3. Taxation slowdown.

State and local moves toward sweetened-beverage taxes slowed in 2017, because of public outcry (Chicago), legal challenges (Philadelphia) and voter rejection (Santa Fe, N.M.). All seem to reflect a change of tenor across the nation, driven by the occupant of the White House.

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