Increased buying frequency from Gen X was the main driver of packaged beverage sales growth in 2022, at 29.5% of buyers and 31.7% of dollars, as all cohorts bought fewer items per trip.
The next closest group of buyers was younger boomers at 18.4%, while older millennials were second in dollars spent, at 16.9%.
This information is from Scott Love (pictured), principal, retail client services at Circana, the new name of IRI and The NPD Group, which merged in 2022. Love presented this and other compelling statistics last week at the CSP Cold Vault Forum in Rosemont, Illinois.
“There are a lot of boomer buyers, but they don’t spend as much,” Love said. “Gen X spends more dollars than there are buyers.”
Elsewhere, Love said, energy drinks and carbonated soft drinks make up about half of total non-alcoholic sales dollars in convenience stores. In addition, total beverage year-over-year dollar growth continues to outpace total convenience-store growth and is driven by non-alcohol products.
Three trend highlights and advice from Love:
- Red Bull and Monster still dominate energy drink sales, with a combined share of 70.5% in 2022. However, this share is down 8.8% from 2017. “While they may lose category share to new brands, the big two will continue to be immensely important,” Love said. He advised maintaining stock and assortment of these two brands while allowing space for new brands.
- Doing well are products with better-for-you ingredient profiles, including additional vitamins and low sugar, that offer functional benefits as well as energy. “Customers are likely to continue seeking health-focused products that increase the value proposition of what they consume,” he said. He advised ensuring that non-alcohol beverage offerings include items offering extra benefits and focusing on health.
- Gatorade and Prime are two brands crossing over categories. “There may be more innovation with products that blur the sports drink, water and energy drink distinctions,” he said. Love advised that retailers determine the ideal shelf placement for hybrid items to align with customer preferences.
Turning to the fastest-growing brands in various categories, Love noted the top three based on sales dollars in 2022:
- In energy drinks, Celsius, $385 million (up 187%), and C4, $266 million (up 145%), and Ghost, $201 million (up 1,655%)
- In sports drinks, Biolyte, $22 million (up 49%), Prime, $18 million (new), and Pedialyte, $15 million (up 133%)
- In water, Glaceau, $1,097 million (up 13%), private label, $616 million (up 16%), and Essentia, $209 million (up 19%)
The hard-to-get Prime is a fascinating product, Love said. “Teens and tweens go crazy for it,” he said. “It’s a status symbol, especially the icy pop flavor. It’s hard to keep. Will it be able to retain that loyalty after scarcity goes away? Will they still care when it’s everywhere?”
Turning to alcohol drivers and innovation from Q1 2020 to Q1 2023, Love said liquor sales growth is outpacing beer and wine. However, beer is more than 80% of total alcohol sales dollars, with six-packs declining and 12-packs and single serve cans growing.
“The big driver in liquor is canned cocktails,” he said, while seltzers have declined. “There are a lot of places in the country where you cannot sell spirts in c-stores, but you can sell canned cocktails, so you can meet the demand but still remain within regulations.”
Brands promoting low calories and low sugar have enjoyed strong growth in the prepared-cocktails subcategory, he said. The top five brands based on sales in 2022:
- Clubtails, $122 million (up 13.4%)
- BuzzBallz, $104.9 million (up 54.7%)
- High Noon, $65.8 million (up 148.9%)
- Monaco, $40.4 million (up 30.3%)
- BeatBox, $33.9 million (up 104.4%)
Imports are the growth drivers in beer, with flavored-malt beverages also gaining. All cohorts played a role in the growth of imported beer, with Hispanic shoppers continuing to make outsized contributions to dollar sales. Constellation owns 79.2% of imports through Modelo and Corona brands, growing 15.4% in 2022 vs. a year ago. “Ensure that key single-serve imported beer items are carried and stocked,” Love said.
Elsewhere, “Twisted Tea is all of a sudden exploding, which is interesting because it’s not a new brand,” Love said.