OAKBROOK, Ill. -- After two years of declines in total beverage sales--for the first time on record--suppliers and retailers had reason for concern in the first half of 2010 when sales trends continue to slide. Turns out a healthy second half of the year pulled the category back, and growth is expected when the numbers are tallied for the full year.
"[Beverage] volume declined in both 2008 and 2009.... This has never occurred before," Gary Hemphill, senior vice president of information services for Beverage Marketing Corp., New York, told CSP Daily News. "For 2010, [image-nocss] we don't have final numbers yet, but the best way to describe it is as an improving market. The first half of the year was tough; the third quarter was better, and fourth quarter appears to be even better."
What follows is an exclusive CSP Daily News category breakdown of how beverages faired in convenience stores in 2010.
(For more detail on this report, see the February issue of CSP magazine.)
Beer
Premium beers continue to see growth as do larger package size, 12-, 18- and 24-packs. But the most remarkable consumer trend here is a move toward single-serve beers.
"There used to be a very limited selection in single-serve--Bud, Bud Light, Coors, Coors Light," said Tami Caputo, chief operating officer of Fills Fuel Centers, a four-store chain in Las Vegas. "Now you can buy Pacifico, Newcastle, St. Pauli, Corona. So there are a lot of single-serves that didn't exist even two years ago.... [Consumers] want higher-quality beer, but they're buying it in a single-serve. It's easier for people to justify it."
In 2010, dollar sales of beer in c-stores were down nearly 1%; unit sales down 2.64%, according to Convenience AllScan data for the 52 weeks ending October 31, 2010, from SymphonyIRI Group, Chicago.
Bottled Water
Bottled water is back on a growth path after a couple of down years, thanks mostly to a healthy second half of 2010.
"The category is back," said Rex Griswold, vice president of sales for Nestle Waters North America, Greenwich, Conn. "From June through October, we were at double-digit growth, and that's just in c-stores. The business was flat for the category at the end of first quarter. When April and May got here, we started to see growth. We were about 15% to 20% growth this summer, and we're still in double-digit growth."
The category overall, for the full year, will likely see single-digit growth, a welcome relief from the -2% and -3% unit sales declines or the previous two years, according to data from SymphonyIRI Group. C-store specific data for the 52 weeks ending October 31, 2010, shows unit sales were up almost 1%.
CSDs
Still no growth in the carbonated-soft-drink (CSD) category in 2010, but sales won't be down as much as in the two previous years.
Packaging played a major role in how CSDs sold during the past year. "Entry-level" packaging--16-oz. and 14-oz. PET bottles introduced by the major CSD manufacturers--have provided a new value price point to keep customers coming back.
"These [bottles] have helped entice customers inside c-stores for immediate consumption via effective messaging and an attractive price point," said Russell Baker, channel planning and development leaders for convenience, drug, value and specialty retail at Coca-Cola, Atlanta.
In 2010, dollar sales in c-stores dropped 3%, while unit sales sagged about 1.5%, according to SymphonyIRI Group.
Energy Drinks
Energy-drink sales inched back into double-digit growth in 2010 after a year at 6% growth in 2009. While far below the +55% performance from as recently as 2005, the relatively young category is still the envy of the beverage world.
"That's another example where premium-priced beverages have done well and the category is growing" in spite of the lagging economy, said Hemphill.
Sports Drinks
With PepsiCo's Gatorade back on track, and Coca-Cola's PowerAde spreading into new directions--PowerAde Protein Milk, PowerAde Zero--sports drinks appear to have returned to form.
In 2009, the sports-drink category stumbled to the tune of an 8% drop in unit sales.
A year later, unit sales have crept back up 9.24%, while dollar sales rose 6.08%, according to SymphonyIRI Group.
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