Energy drinks saw a significant deceleration in c-store sales growth last month, according to a new report from Morgan Stanley. The investment bank today released an overview detailing a year-over-year comparison in which category sales of energy drinks rose by 11.2 percent over the four-week period ending on Dec. 22. Despite the double digit bump, growth was significantly off the pace for the prior 12 week period in sales, when they rose by 14.3 percent and compared to the same period 12 months ago.
Monster Energy faced the biggest slide in c-store growth with sales of its products up 10.5 percent, decelerating from 19.6 percent growth in the prior 12 weeks. On the other hand, Red Bull saw a healthy upswing in sales growth (18.1 versus 15.9 percent), while Rockstar (2.5 versus 2.4 percent), Coca-Cola Co. (6.6 versus 7.4 percent), and Pepsi Co (-17.8 versus -12.6 percent) remained stagnant or weakened in the comparison.
It appears that the recent slide in sales growth may be directly tied to the sustained deluge of controversy and criticism in recent months surrounding energy drinks.
In a recent article on AdAge.com, Bill Pecoriello, the CEO of Consumer Edge Research, stated that “roughly 65 percent of all teens and adults are aware of the recent news surrounding deaths that could be linked to energy drinks.” Perhaps more troubling for the category is that 79 percent consumers who are aware of the reports “believe or somewhat believe them,” according to Pecoriello.
Apparently, a significant number of consumers ceased or reduced consumption of energy drinks based on negative published reports on energy drinks, as well as health concerns or side effects associated with use of the products. Pecoriello stated that 27 percent of consumers have discontinued or reduced their usage of 5-Hour Energy and that 20 percent of consumers done the same with Monster Energy drinks.
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