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NEW YORK — Beverage sales over the Memorial Day weekend may have convenience store retailers wishing things heat up in the cold vault as the unofficial start to summer moves closer to the official start.
According to Wells Fargo Securities LLC's Beverage Buzz survey, total beverage sales were up 4 to 5 percent over the holiday weekend — a slight deceleration from Memorial Day weekend 2016.
Beverage Buzz surveys beverage retailers representing more than 15,000 convenience stores.
The soft results were mainly driven by weak energy sales, increased promotions in the grocery channel, out-of-stock issues and poor weather in several areas of the United States, according to Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities.
These weaknesses offset the strong results in the sales of bottled waters and import beers, she added.
Looking deeper, the survey found that Constellation Brands Inc. shows "no signs of slowing" as retailers give the company's beer brands more shelf space and the company continues to innovate, according to Herzog.
C-store retailers expect Constellation Brands beer sales to grow 11 percent in 2017, she said, adding 90 percent of retailers reported plans to increase the company's shelf space this year.
On the other end of the cold vault, sales of Monster Beverage Corp. brands "are expected to remain very soft for 2017 as execution issues and limited innovation continue to hinder growth," Herzog said.
Noting Beverage Buzz found Monster's sales were up only 3 percent over the holiday weekend, she added Wells Fargo Securities' retail contacts expect total sales growth for the company of only 3 to 4 percent this year.
"This was weaker than we expected given the excitement we had been hearing from our retailer contacts about Monster's Hydro launch," Herzog said. "However, the delays in Hydro's launch persist as most retailers still did not have Hydro for the holiday weekend and many retailers that did, reported having out-of-stocks already as execution issues continue to plague Monster."
In addition, trends in the energy drink segment remain under pressure "as sales growth is definitely slowing," the survey found.