NEW YORK -- The unofficial start of summer spelled good news for the beverage aisle, with convenience store beverage sales increasing 4 percent over the Memorial Day weekend. The jump was an improvement over the 2-percent increase posted over the holiday weekend in 2013.
A Beverage Buzz survey by Wells Fargo Securities LLC of beverage retailers representing tens of thousands of c-store locations across the country indicated that the accelerated sales growth was driven by improved weather conditions and heavy promotions (particularly multi-purchase promos), according to Bonnie Herzog, managing director of tobacco, beverage and consumer research at Wells Fargo Securities.
Although the carbonated soft drinks category remains under pressure, energy drinks, waters and non-carbonated drinks appear to be growing. So far in the second quarter, Wells Fargo Securities' retailer contacts have indicated beverage sales are up 4 percent, pushing past the 1-percent increase in the same quarter last year.
"We believe heading into second-quarter earnings, beverage sales should be relatively solid in the c-store channel and should help support second-quarter results," Herzog stated.
Based on the survey, The Coca-Cola Co. had the most successful Memorial Day holiday and outperformed its peers in the cooler in the second quarter, with sales ticking up approximately 2 percent. Meanwhile, PepsiCo Inc. and Dr Pepper Snapper Group both registered a 1-percent increase.
According to the survey results, beverage promotions rose 5.4 percent year over year during the holiday weekend. In fact, two-thirds of the respondents stated that promotions from beverage manufacturers/distributors increased.
In particular, Coca-Cola appeared to promote the most during the holiday with 59 percent of respondents indicating higher promos for Coca-Cola compared to 46 percent for Pepsi, 33 percent for Dr Pepper Snapple, 46 percent for Monster Beverage Corp. and 33 percent for Red Bull.
"It is turning out to be a great year in the beverage category as a whole with all of the extra 'two-for' promos we're running as opposed to last year," one retailer remarked.